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Livestock, Poultry Call for Ethanol Policy Changes

The House Livestock Subcommittee recently held a hearing to examine the issue of feed availability and its effect on the livestock and poultry industries. The United States’ ethanol policy is the main factor affecting feed availability, emphasized the livestock and poultry witnesses at the hearing. The National Cattlemen’s Beef Association (NCBA) said that “subsidized ethanol has meant record-high corn prices and record-high costs of production for meat and poultry, resulting in lower per capita meat and poultry output.” The National Pork Producers Council (NPPC) said, “The ethanol industry is using more and more of the nation’s corn supply. This year it is expected to overtake livestock and poultry producers as the largest user of corn. But its growth has been driven almost entirely by the Renewable Fuels Standard (RFS) mandate, which makes no provision for short corn supplies.” The National Chicken Council made the following recommendations for changing the nation’s ethanol policy:

• Elimination of the Volumetric Ethanol Excise Tax Credit (VEETC) and import duty on ethanol.

• Have a partial or full waiver of the Renewable Fuels Standard by filing a legal challenge with the Environmental Protection Agency or have legislation passed to permit individual states to opt-out of the federal ethanol mandate and/or legislation mandating a stocks-to-use trigger mechanism for the RFS.

• Minimize or prohibit further government subsidies and federal grants funding the building and expansion of infrastructure that encourages the manufacture, distribution and scales of corn-based ethanol.

• Remove without penalty non-environmentally sensitive cropland from USDA’s Conservation Reserve Program (CRP).

The Renewable Fuels Association (RFA) in a press release, countered: “If this subcommittee were truly interested in finding out the facts, they would be interested to know that ethanol producers will provide nearly 40 million metric tons of livestock feed this year. They would also be interested to note that at today’s corn prices, a pound of pork chops retailing for $3.51/lb. contains just $0.30 of corn – less than 8% of the total cost.”

"Flawed Regulation" Hearing Includes GIPSA – The House Committee on Oversight and Government Reform held a hearing entitled, "How a Broken Process Leads to Flawed Regulations." One of the regulations sighted at the hearing was the proposed Grain Inspection and Packers and Stockyards Administration (GIPSA) rule. A number of committee members were concerned about the lack of an economic analysis when the proposal was first published and urged USDA to allow for a public comment period when the analysis is released. The National Cattlemen’s Beef Association (NCBA) in its testimony said, “We do not need a big government setting up shop on our farms and ranches. Government intrusion into private marketplace is not the answer.” The committee released a report, “How the Administrative State has Broken President Obama’s Promise of Regulatory Reform,” prior to the hearing. The report discussed the GIPSA rule in some detail and stated, “Not only did GIPSA fail to conduct a meaningful, cost-benefit analysis of the rule and sought to exclude public participation, GIPSA also violated E.O. 12866 because the rule exceeds the agency’s delegated authority and will likely spur litigation.”

E. coli Testing Expanded – USDA announced that six additional strains of E. coli will be declared adulterants in non-intact raw beef. Raw ground beef, its components, and tenderized steaks found to contain these bacteria will be prohibited from sale to consumers. According to USDA, these six strains of non-0157 E. coli (STECs) cause more human illness than E. coli 0157:H7. Under Secretary of Agriculture for Food Safety Elisabeth Hagan said, “Consumers deserve a modernized food safety system that focuses on prevention and protects them and their families from emerging threats. As non-O157 STEC bacteria have emerged and evolved, so too must our regulatory policies to protect the public health and ensure the safety of our food supply." Concerns within the industry are the testing methodology that will be used and its accuracy.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.