Statistically, ethanol is a farm-friendly fuel
Article by: GARY PESTORIOUS
Updated: August 20, 2013 - 6:50 PM
Livestock farmers aren’t burdened by feed costs — they’re making money.
The Aug. 15 commentary “Yes — reconsider that ethanol blend rate” was chock-full of misrepresentations and cherry-picked data to allow the authors to make a case against other American farmers and the ethanol industry.
While feed costs may have risen since the current Renewable Fuel Standard (RFS) was enacted in 2007, the annual difference between the prices that livestock and poultry producers received for their products and the cost of purchased feed has increased from an average of $91 billion between 2002 and 2007 to $97.7 billion for the five years since enactment of the RFS. In other words, the livestock industry has been able to cover feed costs and pocket nearly $7 billion a year in additional income.
The ethanol industry uses only the starch from corn to produce fuel. Millions of tons of distiller’s grains are produced each year as a high-protein, reasonably priced byproduct for livestock feed. This effectively reduces the amount of corn used for fuel to about 17.5 percent of our crop acres and about 3 percent of global grain supplies — nowhere near the 40 percent that ethanol’s opponents claim.
The prospects for 2013 are for a record corn crop and farm prices that are projected to decline by nearly 30 percent from last year’s drought-impacted crop.
When coupled with increased overall livestock production and higher average farm prices for beef, pork, chicken and turkey, it is hard to see how the RFS has had anything but a positive impact on U.S. livestock producers. In fact, the Aug. 5 edition of Feedstuffs, an agribusiness publication, quoted Jim Robb, director of the Livestock Marketing Information Center, as saying, “The poultry industry is seeing huge profits.”
Interestingly, all this occurred during a period when the chicken industry faced real cha