24 January 2007

1 minute read

North America

Several major livestock groups are asking USDA officials to create a special group to study the impact of the burgeoning biofuels industry on livestock and the meat industry. In a letter to Secretary of Agriculture Mike Johanns, the groups acknowledged changes in technology are putting agriculture "in the driver's seat of America's energy future."

But such changes come at a price and are affecting thousands of beef cattle, dairy, pork and poultry producers. The livestock groups ask Johanns to put together a working group in the office of the USDA chief economist that would examine the biofuels industry and the implications for the meat industry.

Demand for corn in the ethanol industry has driven up commodity prices since last fall. Some economists have suggested the price shift will not be temporary as ethanol production increases over the next two years through plants now under construction. That translates into livestock producers facing more competition for feedstuffs as well.

The livestock groups suggested in their letter that many producers fear they cannot sustain their operations competing with "a growing and robust ethanol economy." There is growing pressure on corn supplies and some producers may not be able to find feed during part of the year. That could lead to a reduction in national livestock herds and create further consolidation within the livestock industry.

Source: High Plains Journal