With a lot of attention focused on the unintended consequences of ethanol policy in raising the costs of food, here’s another example of those spiraling costs. Tyson Foods says higher feed costs led to a big drop in fiscal third quarter profits. The company said that for this quarter its grain costs for chicken feed were $140 million more than a year ago. For this fiscal year, it expects grain costs to be a whopping $550 million higher than the previous year.
According to Tyson’s Investor Fact Book, “Corn and soybean meal are major production costs in the poultry industry, representing about 40 percent of the cost of growing a chicken.” And, with 25-30 percent of the corn crop diverted to ethanol production, and more farmland diverted from other crops such as soybeans to feed the corn maw, the effect on Tyson’s is only one example of the perversity of ethanol policy.