Monday, July 18, 2011

Dubious Distinction

Last week’s grain supply and demand forecast from the U.S. Department of Agriculture included a dubious distinction: This year, for the first time, more corn will be used for fuel than for livestock feed. That can only mean one thing for pork producers and consumers: even higher feed costs contributing to even greater increases in food costs.

The July 12 World Agricultural Supply Demand Estimates report estimated that 5 billion bushels of corn will used for animal feed in 2010-2011, while 5.05 billion bushels will be devoted to ethanol. In projections for 2011-2012, the gap widens to a full 100 million bushels.

Animal agriculture groups have long argued that, by diverting corn to fuel, government support for ethanol is largely to blame for today’s rising prices for feed and food. And, while Congress finally is talking about repealing ethanol subsidies, there's also talk that the "savings" will be diverted to ethanol infrastructure such as pumps and pipelines. And so far Congress hasn’t even discussed the idea of repealing the all-important Renewable Fuels Standard, which mandates the annual amount of ethanol -- and other biofuels -- that must be produced.

Testifying before Congress earlier this year, NPPC President Doug Wolf said support for renewable fuels is laudable but should not “come at the expense of the U.S. livestock industry.”

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