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A newly created renewable energy center at IUPUI has been named after Indiana Senator Richard Lugar.

In a press release, IUPUI Chancellor Charles R. Bantz said the campus wanted to name the center for Indiana’s senior United States Senator because of Lugar’s steadfast leadership on renewable energy issues.

“Developments at the federal level underscore the growing awareness that renewable energy will play a leading role in ensuring U.S. energy independence,” Bantz said. “The creation of the Richard G. Lugar Renewable Energy Center is a direct response to that recognition. Senator Lugar’s strong support for renewable energy research has had an immeasurable influence on our nation’s collective thinking about the need for energy security.”

During dedication ceremonies on Monday, Senator Lugar had some strong words for critics of ethanol, according to Indiana’s Hoosier Ag Today radio network.

“Eighty percent of the world’s oil supply is controlled by governments. Oil companies and the forces of supply and demand do not determine the price of oil.” He said this situation poses a security threat for the United States, “We need to understand that we are talking about the ability of our country to continue on in the lifestyle to which we are accustomed.”

A new study by the Global Development and Environment Institute at Tufts University in Maryland offers some interesting perspective on the issue of feed prices. In the report “Industrial Livestock Companies’ Gains from Low Feed Prices, (1997-2005)” the authors state that, “With rising demand for corn-based ethanol, representatives of many of the nation’s leading meat companies have expressed concern over the rising price of animal feed, which has increased significantly with the price increases for its two principal components, corn and soybeans.”

Feed prices have indeed increased significantly. As feed costs generally account for more than half of operating costs for industrial operations, higher prices can have an important impact on the bottom line for these companies. So too can low prices. Any discussion of today’s high prices should take into account the extent to which these same firms have benefited from many years of feed that was priced well below what it cost to produce. In the nine years that followed the passage of the 1996 Farm Bill, 1997-2005, corn was priced 23% below average production costs, while soybean prices were 15% below farmers’ costs. As a result, feed prices were an estimated 21% below production costs for poultry and 26% below costs for the hog industry. We estimate cumulative savings to the broiler chicken industry from below-cost feed in those years to be $11.25 billion, while industrial hog operations saved an estimated $8.5 billion. The leading firms gained a great deal during those years from U.S. agricultural policies that helped lower the prices for many agricultural commodities.