Friday, April 11, 2008

Study says biofuels subsidy hurts poultry and pork producers by raising cost of grains

Add another study to the debate over biofuels. According to a new FarmEcon LLC study by Thomas Elam, U.S. biofuels policy is hurting the poultry and livestock industries, as well as ethanol producers to the tune of billions of dollars per year, reports Janie Gabbett of, which covers the meatpacking industry. Commissioned by the National Chicken Council, the National Turkey Federation and the American Meat Institute, the study estimates that rising feed costs for 2008-09 will cost the poultry industry about $8 billion and the swine industry about $3.6 billion.

Input costs for ethanol distilleries will climb, too, and the study projects they will rise by more than $8 billion in 2008-09. Ethanol plants need more corn, but there will not be enough to meet that demand. "According to the study, ethanol distilleries already in operation, plus those slated to come on line in the next year, will need up to 5 billion to 5.5 billion bushels of corn per year by 2009, but only about 4 billion bushels will be available, causing them to operate at only 75 percent to 80 percent of capacity," Gabbett writes. (Read more; subscription required)

In a column for The Delta Farm Press, Forrest Laws writes that the "pseudo-debates" about renewable fuels in regard to cost of production or emissions "pale in comparison" to the need to keep American wealth in America and create more jobs. He cites Oklahoma oilman T. Boone Pickens who has said he now supports ethanol production because America spends almost half a trillion dollars purchasing foreign oil each year. Pickens recently said on CNBC, “I’d rather have ethanol and recirculate the money in the country, than to have it go out the back door on us.” (Read more)

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