NPPC: EPA's Decision to Increase Ethanol Blend Rate

US - The National Pork Producers Council (NPPC) Ethanol Task Force Chairman Randy Spronk yesterday expressed concern about the US Environmental Protection Agency's decision to increase the ethanol blend rate to 15 per cent. He made the following statement yesterday on behalf of the NPPC.
calendar icon 14 October 2010
clock icon 3 minute read

"The National Pork Producers Council is very concerned with the effect on America’s pork producers of raising to 15 per cent the amount of corn ethanol that can be blended into gasoline, a decision the US Environmental Protection Agency announced today," said Mr Spronk, a hog and crop farmer from Edgerton, Minnesota.

“NPPC is withholding comment on raising the blend rate to E15 from its current E10 until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers," he said.

“Given that the US Department of Agriculture’s 8 October crop report revised down the expected yield and ending stocks of corn, we’re already seeing corn prices and the cost of raising a hog heading up.

According to Mr Spronk, Corn for December delivery yesterday was up 4.2 per cent from the day before, settling at $5.79 a bushel and has risen by 17 per cent in the past three days. In trading this morning, prices reached a high of $5.88 a bushel. Corn was under $4 a bushel in August.

The higher corn prices have dropped projected pork profits for 2011 to just an average of $1.19 per head, down more than $5 per head from a week ago, according to economist Steve Meyer, president of Paragon Economics in Adel, Iowa.

“We don’t want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of almost $24 a hog from October 2007 through March 2010, and the industry lost nearly $6 billion. Family hog farms went out of business during that time, and many producers reduced the size of their herds,” Mr Spronk concluded.

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