The Impact of Ethanol Driven Corn Price on the Cow-Calf Industry
Marcella Warner, Spearville, KS, defended her thesis, “The Impact of Ethanol Driven Corn Price on the Cow-Calf Industry,” Thursday, October 16, 2008. Warner is an Associate Professor of Agriculture at Dodge City Community College. She graduated from Kansas State University in December with a Master’s in Agribusiness (MAB).
The recent record increase in corn price associated with increased starch-based ethanol production, increased energy costs, and other factors such as a declining value in the United States dollar, and increased global commodity demand have impacted the profitability of the livestock feeding industry. For her master’s thesis requirement, Warner chose to examine the relationship between cow-calf profitability and corn price.
“As a cow-calf producer, my interest was in how this new corn price paradigm would affect cattle producers further down the supply chain. My research has really allowed me to focus in on the issue of current and future feed and energy costs and the need to implement strategies to maintain profitability,” she said.
Her findings suggest that the new corn market will likely increase the relationship between corn price and feed costs at the cow-calf level. While cow-calf producers might use very little corn directly in their operations, Warner’s research shows corn price is an important determinant of cow-calf production returns, and can be used by producers to plan for future rising costs in order to maximize returns.
Rodney Jones, Agricultural Economics professor and Warner’s thesis advisor, said, “Marcella’s thesis results will assist cow-calf producers in adjusting to higher input prices and higher costs associated with recent feed price increases. Producers will be better able to predict future economic outcomes and plan for the future based on her study.”
The full thesis publication can be found online on Kansas State University’s Research Exchange at http://hdl.handle.net/2097/1002.