Monday, June 20, 2011

One Fine Day

After lots of bad news out of Washington, pork producers had several things to cheer about last Thursday.

First, the House voted to keep the Agriculture Department from finishing its costly rewrite of regulations governing how livestock are bought and sold. NPPC has said the draft regulation is bad for producers, consumers and rural America alike and will lead, among other things, to thousands of job losses.

Meanwhile, the Senate was voting overwhelmingly to kill the 45-cent-per gallon ethanol tax credit and a companion 54-cent-per-gallon ethanol import tariff. Together the subsidies drive up corn prices, reduce supplies and threaten livestock feed shortages.

And to top things off, media reports said the Obama administration and congressional leaders are close to a deal on three long-pending free trade agreements that will generate nearly $800 billion in additional pork exports.

Of course, the provisions blocking the livestock regulation and killing the ethanol subsidies face additional hurdles on Capitol Hill. But the ethanol vote suggested that the corn-based fuel’s long stranglehold on Congress has finally been broken. And the action on the livestock regulation sends a clear message that USDA went way too far in drafting the massive and unwelcome rule.

All in all, one good day for pork producers!

Tuesday, June 14, 2011

Challenging Conventional Wisdom On Ethanol

Is it suddenly fashionable to be against ethanol?

First, Minnesota Republican Tim Pawlenty defied conventional wisdom by proclaiming his opposition to ethanol subsidies while announcing his candidacy for president—in Iowa.

And now, a trio of prominent Republican senators—Tom Coburn, Okla., John McCain, Ariz., and Jim DeMint, S.C.—is targeting ethanol as well.

Coburn is forcing a Senate vote—perhaps as early as today—on eliminating the 45-cent-per-gallon ethanol tax credit, and DeMint says he will offer a separate amendment to repeal the renewable fuel standard (RFS), which mandates ethanol’s production. Not to be outdone, McCain says he wants to bar the Agriculture Department from making grants to install ethanol pumps at filling stations.

If that sounds like a political sea-change, it is. Until recently, the livestock industry was largely alone in questioning federal subsidies for ethanol production. The subsidies drive up corn prices, and the RFS affects corn supplies, threatening livestock feed shortages, which would be disastrous for pork and cattle producers alike. NPPC repeatedly has said that support for renewable fuels should not come at the expense of the livestock industry.