The House Agriculture Subcommittee on Livestock, Dairy, and Poultry held a hearing on Thursday to review the impact of increased biofuels production and higher feed costs on the livestock industry. Congressmen heard from one high-ranking USDA official, six livestock industry representatives and the country’s leading expert on the ethanol co-product known as dried distillers grains which is used as a livestock feed.
Virtually every livestock representative testifying had a statement similar to Joy Philippi of Nebraska, immediate past president of the National Pork Producers Council – that they “support the development and the use of alternative and renewable fuels as a way to reduce America’s dependence on foreign oil, but we continue to have the jitters over the rapid rise of corn ethanol production in our country.”
The livestock and poultry producers also were united in their call for reducing or eliminating incentives for biofuels production. “This means we are calling for sunsetting the existing blenders tax credit and the ethanol import tariff as scheduled in 2010 and 2009 respectively,” said Ernie Morales, a cattle feeder and rancher from southwest Texas, who spoke for the National Cattlemen’s Beef Association.
However, in separate press conferences Thursday, the chairmen of the House and Senate Agriculture Committees disagreed.
Senate Ag Committee Chairman Tom Harkin of Iowa, always a strong advocate for livestock producers, said, “I understand maybe where they’re coming from, but I think these things have a way of leveling out.” He believes the anticipated increase in corn acreage this year will help bring prices down to more manageable levels.
House Ag Committee Chairman Collin Peterson of Minnesota pointed out that grain producers are finally getting a fair price for their crop. “What people fail to recognize is that over the last number of years, corn prices have been substantially below the cost of production and the livestock industry has benefited from this,” said Peterson.
Several of the livestock industry witnesses at the hearing admitted that the situation is likely short term and that much of the current concern is due to the unprecedented rapid growth in ethanol production. As Iowa dairy producer Rob Wonderlich, testifying on behalf of Dairy Farmers of America, told the committee, “This biofuels revolution occurred very quickly and did not allow … the livestock industries to properly adapt, which has sent a shock across the industries in the form of increased operating costs.”