Pork Faces Challenges From Ethanol Demand

US - While expressing their support for the development and use of alternative and renewable fuels, the National Pork Producers Council (NPPC) and the Iowa Pork Producers Association (IPPA) today in testimony before the Senate Agriculture Committee detailed pork producers’ concerns with the rapid rise in ethanol demand.
calendar icon 11 January 2007
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The organizations cited several challenges facing pork producers, including diminishing corn stocks, rising corn prices and issues with using distiller’s grains – an ethanol by-product – in pig diets.

A study by the Center for Agricultural and Rural Development (CARD) at Iowa State University found that current crude oil prices and government policies allow the ethanol industry to pay up to $4.05 per bushel of corn. (The ethanol industry receives government subsidies of $1.53 per bushel of corn and a blender’s tax credit of $0.51 per gallon of ethanol, and there’s a federal mandate on ethanol production.)

“These incentives have the ethanol industry growing at an almost unbelievable pace,” said Gene Gourley, a pork producer and swine nutritionist from Webster City, Iowa, who testified on behalf of NPPC and IPPA. “New plants are springing up everywhere, and they’re using a lot of corn.”

Several sources, including the Renewable Fuels Association, forecast large increases in corn usage by the ethanol industry in the next year. Former USDA grain economist William Tierney predicts that the annual usage rate will be more than 10 billion bushels by the end of 2009 if all of the ethanol plants currently under construction or planned come on line. Currently, the U.S. pork industry uses about 1.1 billion bushels of corn, and the entire livestock industry uses more than 6 billion bushels. In 2006, corn growers produced 10.7 billion bushels.The CARD study estimated that corn use by the ethanol industry would reduce corn availability for livestock feed by 33 percent, causing reductions in the size of the U.S. pork and poultry industries.

With regard to distiller’s grains (DDGS), Gourley told the committee that there are a number of issues related to feeding them to pigs, including inconsistent quality, variability of nutrient content and the potential presence of mycotoxins. He pointed out that DDGS are far more useful in diets for beef and dairy cattle, meaning those producers are willing to pay more for them.

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