Published on: 14:52PM Oct 23, 2008
USDA Secretary Ed Schafer recently stated publicly his support for ethanol plants hurt by high corn prices. The remarks caused the National Cattlemen’s Beef Association (NCBA) to ask “Where’s the love?” for beef producers who have been hurt by high corn prices for some time.
In remarks made in Des Moines, IA on Friday, October 17, Schafer stated that, “There's going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn.These higher corn prices are due in large part to extensive federal subsidies for the ethanol industry. The plants in question hedged on the futures markets and are now seeing the consequences of risky business decisions.”
In a letter to Secretary Schafer, NCBA stated its disappointment in Schafer’s remarks, and noted that cattle producers, meanwhile, have been facing the hard realities of rising corn prices for quite some time. The industry has suffered a record $1.5 billion in cattle feeding losses in just the first six months of 2008.
The letter states: “Continuing to subsidize the ethanol industry at the expense of other agricultural sectors risks our food production capacity. While energy independence is an important goal, it must be balanced with one of our strongest suits: our ability to feed Americans and the world.”
The letter goes on to say: “Corn-based ethanol is a mature technology that should be able to compete on the open marketplace without government intervention to prop it up….While we appreciate that the funds in question are not new money or exclusively available to biofuel plants, the ethanol industry’s need for increased funding after years of subsidies highlights an underlying fault in USDA’s approach to food and fuel policy.”
What are your thoughts? Should the government share the love?