Ethanol is either a boon or a financial squeeze for farmers in the state.
Ethanol's demand for corn is driving up the price of corn. Good news for the farmer's who grow it. But if you're a dairy farmer who doesn't raise your own feed, that higher cost of corn may be putting you in a financial bind.
Greg Steele with AgStar Financial Services and a corporate board member of the Wisconsin Dairy Business Association says about a third of the state's dairy farmers buy corn for feed rather than grow it and it's usually the larger operations that have already leveraged themselves by expanding their operations.
But Steele believes the industry is resilient. He says farmers will find other ways to keep the cost of production down. They will either find the capital to start fields of their own, use less expensive alternative feed sources to supplement the corn they do buy or find some other way to keep production costs down.
Steele doesn't see this affecting consumers at the dairy case in the short term, only if there's a sustainable increase of production costs for a long period of time.
Steele says all this is a recent development and it remains to be seen exactly how the dairy industry will react.