Alternative fuel production might be causing more trouble than it seeks to fix. As part of the 2006 Advanced Energy Initiative to reduce dependency on foreign oil, the government is giving entrepreneurs billions in subsidies to produce ethanol, an alternative fuel that will require major changes in the ranch management industry to remain sustainable.

Americans primarily make ethanol by mixing gasoline with the by-products of corn. Meat producers on the ranch who used to feed corn to livestock must now feed it to the ethanol industry and find alternative food for animals, said Eric Brast, assistant director of the ranch management institute.

During his State of the Union Address on Jan. 23, President Bush said, “Extending hope and opportunity depends on a stable supply of energy that keeps America’s economy running and America’s environment clean.”

Ranch managers are now wondering how the energy supply will affect food supplies.

Government subsidies for ethanol production create a higher demand for corn, taking it out of human mouths and the mouths of the cattle, swine and chickens, Brast said.

“We, as producers, don’t ever like to see things come about that take food from human consumption, and I think that ethanol will be something that does that,” Brast said. “So our challenge is to find other food that can take the place of corn because the way it looks right now – corn is going to ethanol production and there’s nothing we can do about it.”

Ethanol, made from sugar cane, is 600 percent more efficient than corn-based ethanol, Brast said.

Corn is primarily used in the United States because we grow a lot of it here, unlike sugar cane, which only exists in the United States because of trade barriers, said economics instructor John Lovett.

Decreasing dependency on foreign oil is necessary, but getting there won’t be easy, Brast said.

Director of the Ranch Management Program Kerry Cornelius said nobody knows if ethanol is here to stay.

“There have been plants built for ethanol before, most of which failed, and the reason they failed is that there wasn’t enough market demand for it and it wasn’t subsidized,” Brast said.

Ranchers began dealing with ethanol production issues in the 1970s, Brast said. Unsure of how long government subsidies will last, ranchers still have to develop new management strategies to survive without corn, he said.

Americans will adjust to using ethanol as it becomes more available and affordable, but ranchers don’t have the luxury of waiting around.

“If the price of oil goes to $20 a barrel, there will be no ethanol industry because gas will be too cheep,” Cornelius said. “If oil goes back up to $60 a barrel, there will be a value for ethanol production.”

Unless gas prices start getting up around $3 a gallon, ethanol is not going to be profitable as a fuel because right now it sells for about $3.50, Lovett said.

“This is going to hurt farmers and ranchers I would say more than anybody because we’re such big users of corn,” Brast said. “We won’t have access to it because it will be priced out of our market and we can’t afford to compete with ethanol.”

Brast said ranchers will instead have access to the by-products of ethanol production and will feed cattle with them.

He said it’s important to realize that ethanol production is a government-sponsored program with a lot of backing from the corn-rich states in the Midwest.

“The government subsidies and programs that have been set up by the administration and Congress as a means to decrease dependence on foreign oil is what has funded a lot of the initial construction of ethanol plants,” Brast said. “It wasn’t farmers all the sudden deciding that we’re going to build ethanol plants; it was the government saying we’re going to mandate that 10 to 15 percent of all gasoline contain ethanol.”

Brast said the free market will take corn from ranchers to fuel producers as long as subsidies continue to be handed out by the government.