Page 12 ■ Thursday, December 1, 2011


NATION & WORLD


Livestock farmers say ethanol eats too much corn


Associated Press


In this Aug. 30, 2004 fi le photo ground corn that will be used to feed cattle is compacted into a silo at the Haw Ranch Feedlot north of Turon, Kan. The amount of corn consumed by the ethanol industry combined with continued demand from overseas has cattle and hog farmers worried that if corn production drops due to drought or another natural disaster, the cost of feed could skyrocket, leaving them little choice but to reduce the size of their herds.


By MICHAEL J. CRUMB Associated Press


DES MOINES, Iowa (AP) — Live-


stock farmers are demanding a change in the nation’s ethanol policy, claiming current rules could lead to spikes in meat prices and even shortages at supermar- kets if corn growers have a bad year. The amount of corn consumed by the ethanol industry combined with continued demand from overseas has cattle and hog farmers worried that if corn production drops due to drought or another natural disaster, the cost of feed could skyrocket, leaving them little choice but to reduce the size of their herds. A smaller supply could, in turn, mean higher meat prices and less selec- tion at the grocery store. The ethanol industry argues such


scenarios are unlikely, but farmers have the backing of food manufacturers, who also fear that a federal mandate to in- crease production of ethanol will protect that industry from any kind of rationing amid a corn shortage.


The subject of debate is the Renew-


able Fuel Standard, a 2005 law requiring the nation to produce 7.5 billion gallons of renewable fuel by 2012. The standard was changed in 2007 to gradually in- crease the requirement to 36 billion gal- lons by 2022.


“If we get a short crop, the ethanol industry does not participate in rationing and the brunt will fall on


livestock and poultry.” – President of Paragon Economics Steve Meyer


While a $5 billion-a-year federal eth- anol subsidy is scheduled to expire this year, the production requirement will re- main, unless it’s changed by Congress. That has other corn consumers wor- ried that if production falls and rationing


is needed, ethanol companies will be ex- empt. The U.S. Department of Agricul- ture recently reduced its estimate of this year’s corn crop because of fl ooding in the Midwest and drought in the south- ern plains, and corn reserves are expect- ed to fall to a 20-day supply next year. A 30-day supply is considered healthy. At the same time, the price of corn for


livestock feed has risen from an average of just over $3 a bushel in 2006-07 to an average of more than $6 this year. “If we get a short crop, the ethanol


industry does not participate in ration- ing and the brunt will fall on livestock and poultry,” said Steve Meyer, president of Paragon Economics, a livestock and grain marketing and economic advisory company in Adel, Iowa. A bill introduced in October by Rep. Bob Goodlatte, R-Va., would partially waive the ethanol goals when corn in- ventories are low. The Grocery Manufacturers Asso-


ciation, which represents more than 300 food and beverage makers, also has en- dorsed the bill.


“We’re behind livestock producers on this issue,” said Geoff Moody, the association’s director of energy and envi- ronmental policy. “We believe if there is a need to ration that ethanol will eat fi rst because of the mandate.” About 5.9 billion bushels of corn were used for animal feed last year; 2.4 billion were exported; and about 4.9 billion were used for ethanol, up from about 630 million bushels in 2000, according to the National Corn Growers Associa- tion. About 1 billion bushels were eaten by humans in products such as cereal, sweeteners, and beverages. U.S. corn farmers have steadily in-


creased production over the years thanks to hybrid seeds and improved techniques, but Meyer said a 20 percent decline in the harvest would be enough to force corn rationing and lead to feed shortages. That would leave livestock farmers with little choice, he said. “We can’t shut down feeding,” Meyer


said. “The only way to do that is to kill the animals.” Even if there’s no rationing, ethanol


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