Whaddya know?

Well, well… The worm is turning on ethanol :

Congress gave a big boost to ethanol in 2005, when it mandated that oil
refiners blend 7.5 billion gallons of renewable fuels such as ethanol
into the nation's gasoline supply by 2012. The farm lobby was united
behind ethanol as a way to strengthen rural economies. Environmental
groups backed it as a way to fight global warming and lessen the
nation's dependence on foreign oil. Even the petroleum industry was

But things have deteriorated to the point that the agribusiness lobby is on the verge of internal warfare:

Opposition to the ethanol industry's goals has grown
significantly stiffer. The so-called barnyard lobby — representing the
meat, livestock and poultry industries — says high corn prices are
hurting its profits. The price of corn-based animal feed has increased
about 60% since 2005, according to the U.S. Department of Agriculture.

"Our single biggest priority is for Congress to reject
a new renewable-fuels mandate," says Jesse Sevcik, vice president of
legislative affairs at the American Meat Institute, a meat and poultry
trade association.

Other groups that were originally sympathetic to
ethanol are drifting away. They fear that the fuel's advantages are
outweighed by the rise in corn prices, which they say increases the
cost of foods ranging from steak to cereal. "Many policy makers were
seduced by ethanol," says Cal Dooley, president of the Grocery
Manufacturers Association. He opposes increasing federal support for

Charles Stenholm, a former Democratic congressman from Texas who was
influential in agriculture policy, is now a lobbyist in Washington. His
clients include pork, dairy and oil interests, according to lobbying
records. They all agree, he says, that "you need to let the market be
the biggest determinant for ethanol."

The market?  What's that?  More and more, our forecast is panning out 

The Daily Reckoning