Ethanol Craze Cools

Ethanol Craze Cools As Doubts Multiply

In the past, livestock farmers supported ethanol because it was good for the overall farm economy. But now they began to complain that the higher corn price cut sharply into their profits. A meat-producer trade group called the American Meat Institute took a stand against federal support for biofuels last December, joined soon after by the National Turkey Federation and the National Cattlemen's Beef Association.

The farm fissure widened when livestock, meat and poultry groups started coordinating their lobbying with the oil industry, in discussions helped along by former Texas Congressman Charles Stenholm, who now lobbies for both industries.

Packaged-food companies, too, began pushing back, as one after another blamed biofuels' effect on grain costs for hurting earnings. In June, Dean Foods Co., H.J. Heinz Co., Kellogg Co., Nestle USA, PepsiCo Inc. and Coca-Cola Co. sent a letter to senators saying that requiring greater use of ethanol would affect their "ability to produce competitively available, affordable food."