The ethanol effect

Demand for corn for biofuel has boosted prices for S.C. farmers ...

Alan Hawes

Barry Hutto checks corn stalks on his farm Wednesday in Holly Hill. Corn prices have risen nationwide after an increased demand for ethanol. South Carolina corn is not used in ethanol, but farmers benefit from the price increases.

HOLLY HILL — Barry Hutto is in a bad mood this morning. One of his tractors is down, and that's never good news during the growing season. Not when you've got peanuts and soybeans and corn in the ground and hogs and cattle to feed.

There's already enough to fret about after a rare April freeze killed a third of his 1,100- acre corn crop and the recent dry spell threatened to wipe out the rest.

This year's corn crop is one of the largest on record in South Carolina. The state's 400,000 acres are among more than 90 million acres of corn planted nationwide this year — the largest crop since World War II.

The growing surge is the result of the ethanol fuel craze that's hogging the nation's corn supply and pushing corn costs to $ 4 a bushel, twice the price from a few years ago. Corn-based ethanol is blended with gasoline to make the alternative fuel E- 85.

Hutto is among growers hoping to cash in on the demand — or at least squeeze out a meager profit — by converting less-profitable crops to corn. This year, he planted an additional 250 acres of corn on land where he used to grow cotton.

The morning's bad news stuck in his craw, Hutto steers his pickup truck down a dirt road that cuts through a stand of corn. He grumbles something about a tractor part into his cell phone before pulling over to check the crop.

He peels back a husk from an ear and slides his thumb along its yellow kernels, still moist from a late night drizzle. The stalks behind him soar skyward, some sprouting twin ears fit for an agricultural freak show.

Hutto forgets about the tractor for a moment. " No matter what other problems you got, rain kind of smooths over them."

The rains came just in time, probably saved his corn harvest and many others.

South Carolina is a so-called corndeficit state; it consumes more than it grows. To close the gap, the Palmetto State imports corn from the Midwest. But that corn-rich region has jumped headlong into ethanol production in recent years, cutting into the corn supply that farmers rely on to feed their livestock.

Swine producers are among those squealing the loudest at the high price of corn because they rely on the juicy ears to fatten their pigs.

Branchville farmer Richard Rentz grows corn to feed his swine. His 75 sows and about 1,000 pigs devour some 15,000 bushels of corn a year. A bushel is about the size of a 50-pound bag of dog food.

If Mother Nature doesn't cooperate, and his corn crop fails, Rentz would be forced to buy corn on the market. "Corn is a risky crop to grow in a dry season," he says, a feed grinder droning in the background.

" If we don't make it, we are going to have a hard time paying $ 4 for it."

In some states the corn crunch is so noticeable that farmers are stuffing their hogs full of people food such as trail mix and sweets, instead of corn.

Rentz wonders how long the price of corn can stay up. Some analysts predict that the ethanol bubble is set to burst later this year because of a supply glut, and that could stabilize corn prices.

There are now more than 100 ethanol refineries across the country, most in the Midwest, and some 80 more plants are scheduled to come online this year. The industry produced nearly 5 billion gallons of ethanol in 2006 and is on pace to generate 7 billion gallons this year.

The ethanol boom is thanks in large part to President Bush's support of biofuels and a pledge to cut domestic gas consumption by 20 percent over the next decade.

The refineries are shucking through ears of corn. Of the 2.15 billion bushels of corn grown nationwide last year, an estimated 20 percent went into ethanol production.

That large of a bite from the nation's corn supply has far-reaching implications, driving up retail food prices at home and crimping food supplies around the world. Farmers rely heavily on corn to feed livestock, so their higher costs are being passed along to consumers at the supermarket, where price stickers are up on everything from eggs and milk to chicken and beef.

One recent study, "How Biofuels Could Starve the Poor," argued that the frenzied ethanol market is growing too quickly and disrupting food supply equilibriums around the globe.

By 2010, nearly a third of all corn grown in the U. S. will be grown to make ethanol fuel.

But so far, South Carolina is without an ethanol refinery. That's true of the Southeast in general. Georgia is one of the only states in the region with an ethanol refinery, and it runs on beer waste.

State energy and agriculture officials tout the economic and environmental benefits of biofuel. The state Department of Agriculture commissioner Hugh Weathers recently toured the state in a donated SUV that runs on E- 85.

About 40 gas stations across the state (none in the Lowcountry) and more than 1,000 stations nationwide have added E- 85 to their pumps. Most of the nation's ethanol supply flows out of the Midwest and is shipped to coastal markets by truck and rail.

A Raleigh- based company has proposed building 20 ethanol plants along the East Coast. But Agra-Ethanol Products ran into public opposition last year when it announced plans to build South Carolina's first ethanol refinery near Batesburg-Leesville in Lexington County. Though the $200 million plant would have created 100 jobs, local residents and politicians argued that the water-intensive operation would suck the area's land dry, and the project evaporated.

Aaron Wood, a marketing specialist with the state Department of Agriculture, said that setback hasn't dampened talk of an ethanol plant in the state's future.

Still, the industry's arrival here is not likely to have a dramatic impact on the state's corn growers because acreage for crops is limited, he said. Growing more corn will only mean less of something else. " South Carolina is quickly becoming an urban state," Wood said. "We plant houses better than we do anything else."

Hutto hopes for the best this year as he drives past healthy corn stalks and points his truck back toward the highway. He knows ethanol's insatiable appetite for corn puts a pinch on livestock farmers. On the other hand, an ethanol refinery in the state could open a nearby market for his corn.

"I don't know how much more we can boost corn production," he says. " We can't even feed all the animals in South Carolina, let alone ethanol."

Reach Ron Menchaca at rmenchaca@postandcourier.com or 937-5724.