NPPC Says Ethanol Industry Should Share Burden of Short Corn CropNPPC Says Ethanol Industry Should Share Burden of Short Corn Crop
Over the past year a combination of bad weather and bad policy has created a situation today where producers are questioning whether there will be an adequate supply of feed.
September 19, 2011
National Pork Producers Council (NPPC) Vice President Randy Spronk, a pork producer from Edgerton, MN, Wednesday testified on the effects on his operation of tight supplies and high prices of feedgrains before the House Committee on Agriculture’s Subcommittee on Livestock, Dairy, and Poultry.
He told members of the panel that over the past year a combination of bad weather and bad policy has created a situation today where producers are questioning whether there will be an adequate supply of feed. Spronk pointed out that the U.S. Department of Agriculture Monday dropped its corn yield estimate to 148.1 bushels an acre, down from 153.0 bushels.
Much of the current demand for corn is coming from the ethanol industry, he testified, which this year is expected to overtake livestock and poultry producers as the largest user of corn.
The ethanol industry’s growth has been driven almost entirely by the federal Renewable Fuels Standard mandate, which makes no provision for short corn supplies, Spronk said.
He urged lawmakers to consider policies that will address looming feedgrain supply challenges, including:
Require the users of corn for ethanol to bear some of the same risks from corn market supply and price shocks that pork producers and others do.
Adopt measures to assist livestock and poultry producers who suffer losses because of corn rationing. Even with policy changes designed to deal with the inflexibility in ethanol’s demand for corn – i.e., the mandate – other corn users will still bear a disproportionate share of the supply risks associated with weather and other factors.
Adopt policies that would fairly and smoothly transition the U.S. ethanol industry to full reliance on the private market for its supply signals and away from the signals provided by the government through the RFS and subsidies.
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