Farmers said the main reason for the increase in corn prices is because the demand for ethanol, which is made from corn, is high.

But NewsChannel 8 found out the ripple effect is really costly for cattle farmers.

A year ago, it took about $125 worth of corn to raise one steer. Now, it costs twice that.

It's a big difference that's prompting some farmers to change the way they do business.

"For the strictly grain farmer, it's a tremendous plus to the bottom line," said Bill Couser, a farmer in Nevada.

Cattle farmers use tons of corn daily to feed their livestock.

But some cattle farmers are actually using the demand for ethanol in their favor. They are taking the biproducts from that process and feeding it to their cattle.

"This is the mash that's left," Couser said.

After the ethanol gets squeezed out, two leftovers remain -- mushy distiller's grain and a golden syrup.

"This is liquid corn," Couser said.

In ethanol plants, it's waste. In feedlots, it's nutrient-rich, cheap cattle feed that replaces expensive corn.

Now, farmers can sell more of their valuable grain instead of buying the cheaper ethanol leftovers.

"But when you look at the bottom line, and that's what we're all after, so if you're willing to work with these products and the nutritionists and balance it correctly, we've got a win-win situation here," Couser said.

The drawback is that new equipment to make the feed is expensive, especially for smaller farmers.

"This doesn't come easy. You've got to have tanks, you've got to have everything wrapped (and) insulated and when it was 20-below the other day, and you had a little pipe freeze up there, that wasn't fun. But it probably made you $1,000," he said.

Source: KCCI.com