Thursday, October 14, 2010

NPPC Ethanol Task Force Chairman On EPA’s Decision To Increase The Ethanol Blend Rate To 15 Percent

“The National Pork Producers Council is very concerned with the effect on America’s pork producers of raising to 15 percent the amount of corn ethanol that can be blended into gasoline, a decision the U.S. Environmental Protection Agency announced today.

“NPPC is withholding comment on raising the blend rate to E15 from its current E10 until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers.

“Given that the U.S. Department of Agriculture’s Oct. 8 crop report revised down the expected yield and ending stocks of corn, we’re already seeing corn prices and the cost of raising a hog heading up.

[Corn for December delivery yesterday was up 4.2 percent from the day before, settling at $5.79 a bushel and has risen by 17 percent in the past three days. In trading this morning, prices reached a high of $5.88 a bushel. Corn was under $4 a bushel in August.

[The higher corn prices have dropped projected pork profits for 2011 to just an average of $1.19 per head, down more than $5 per head from a week ago, according to economist Steve Meyer, president of Paragon Economics in Adel, Iowa.]

“We don’t want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of almost $24 a hog from October 2007 through March 2010, and the industry lost nearly $6 billion. Family hog farms went out of business during that time, and many producers reduced the size of their herds.”

[Spronk, who serves on NPPC’s board of directors and is chairman of its Environment Committee, is a hog and crop farmer from Edgerton, Minn.]

Tuesday, October 5, 2010

House Lawmakers Want GIPSA Rule Economic Analysis

House lawmakers in a letter sent late yesterday to U.S. Agriculture Secretary Tom Vilsack asked that an economic analysis of the agency’s proposed rule on buying and selling livestock and poultry be completed before the regulation becomes final.

The request was applauded by the National Pork Producers Council, which noted when the rule first was issued in mid-June the lack of such an analysis and which in its public comments on the regulation will demand that one be done.

The 2008 Farm Bill authorized the U.S. Department of Agriculture to promulgate regulations under the Packers and Stockyards Act related to livestock and poultry contracts and marketing practices. The rule would be administered by USDA’s Grain
Inspection, Packers and Stockyards Administration (GIPSA).

Signed by 115 members – 68 Republicans and 47 Democrats – the House letter pointed out that the rule “is sweeping in its scope and would have major consequences in the marketing of livestock and poultry for producers and processors of all sizes. In order for Congress and the public to evaluate this rule and its implications with full transparency, a thorough economic analysis is necessary.”

“It is imperative that producers know how much the GIPSA rule will cost them,” said NPPC President Sam Carney, a pork producer from Adair, Iowa. “Frankly, it’s unfathomable that a major regulation like this doesn’t have an analysis of its impact on the economy and jobs.”

NPPC has pointed out that the proposed rule goes well beyond the Farm Bill mandates and includes some provisions that were considered and dropped or rejected by Congress. The regulation is a “bureaucratic overreach,” the organization has said.

In a July hearing, a number of House Agriculture Committee members said USDA “overstepped its boundaries.” The majority of the panel’s lawmakers signed the Oct. 4 letter to Vilsack, which was championed by Chairman Collin Peterson, D-Minn., Ranking Member Frank Lucas, R-Okla., Livestock Subcommittee Chairman David Scott, D-Ga., and subcommittee Ranking Member Randy Neugebauer, R-Texas. [Click here to read the letter.]