The demand for corn to make ethanol is expected to keep growing, which is creating challenges for livestock producers.
Both farmers and ranchers are meeting this week in Salt Lake City for the 88th American Farm Bureau Federation annual meeting and biofuels has already been the main topic of discussion.
Calling ethanol a “bull on the loose,” USDA Chief Economist Keith Collins told producers that the next three to four years will be a critical period of adjustment in both the ethanol industry and the livestock industry because of higher feed prices.
Collins says that we can expect to see growth in corn yield per acre, more corn acreage, higher corn prices, the development of new economically feasible feedstocks and products replacing some corn or meal in feed.
“Dried distillers grains (DDGs) have to improve in quality and be more easily digested,” he said.
However, demand for biofuels is expected to lead to lower revenues for livestock producers this year, according to AFBF livestock economist Jim Sartwelle and other industry experts who addressed the conference.
“All protein producers are going to face a challenging year in 2007 when it comes to increasing feed costs,” said Sartwelle. “We are sure to see producers limiting the size of their production capacities because it just doesn’t pay to keep animals around with $3.50-per-bushel corn.”
Farm Bureau representatives will be making policy decisions this week, the “marching orders” for the organization this year, and resolutions concerning biofuels are on the docket.