Interesting opinon

[cutterone]

I got an interesting opinion from an outsider to Ag this week. He felt that the grain producers with government’s assistance have thrown livestock producers to the wolves. He noted that Sen. Tom Harkin, chair of the Ag committee, from Iowa the largest corn producing state and pork producing state, had forged and pushed legislation and subsidies for ethanol made from corn to escalate high prices of corn and soybeans knowing good and well it would hurt the livestock side of the equation. In his opinion it seemed as though there was a rational it was more important to help the energy crisis by importing the nation’s needs for meats and sacrificing the livestock industry and prop up the grain and energy industries.

[Cinch]

[Sandhusker]

[Bill]

Ethanol predicted to hit hard
by Allison Finnamore


An independent agri-products think tank predicts the cost of ethanol development in Ontario will be borne on the backs of the red meat industry.

The George Morris Centre released a report earlier this week stating the net cost of ethanol development is about $150 million a year in Ontario. The report raises the question that the rapid development of ethanol production capacity could lead to a permanent import pricing basis for corn, undermining the basis for cost-competitive pork and beef industries and induce downsizing.

“As it stands, Ontario marketings of hogs and cattle have already outstripped the capacity of domestic corn to feed them, so downsizing is warranted,” says Al Mussell, senior research associate at the George Morris Centre and lead author of the report. “But the appetite for corn from ethanol plants coming on-line in the near future is immense and backed by subsidy. The export-based red meat industry in Ontario will be unable to compete for corn with ethanol and the firm import pricing basis for corn that results will decimate the red meat industries.”

The report traces the link between corn production, consumption in feed and industrial uses, and ethanol production and distiller’s dried grains in its analysis of forthcoming adjustments as ethanol production increases.

“Even when we force the maximum feasible inclusion rates of distiller’s dried grains into livestock rations, the implied shrink in hog and cattle marketings that would return Ontario to competitive corn basis levels is simply dramatic,” says Graeme Hedley, an associate of the centre.

The report concludes that even at $148-156 million per year, these results significantly understate the entirety of adjustment costs. The report is only a snapshot, says Mussell.

“Our results only scratch the surface, as we have not included losses or asset devaluation in feed, veterinary, or animal breeding. Clearly this also has implications for ethanol production in Western Canada. The bottom line is that this will result in a very hard landing for red meat segments in eastern and western Canada, based on our current course.”

The complete GMC report entitled Crowding Out: The Real Ethanol Issue in Canada is available on the George Morris Centre website, www.georgemorris.org.