January 15, 2007

 

US pig industry fears corn prices will raise price for feed

 

 

Pork farmers are just starting to peel the husk away from an issue they fear could ultimately threaten production across the country, according to industry leaders who met in Tucson this week.

 

Corn prices are at their highest in a decade which means generous profits for grain farmers. It also means trouble ahead for livestock producers who feed their animals with corn.

 

The pork industry, which relies heavily on corn as feed, continues to grapple with the issue as increased demand for corn would result in higher prices for feed.

 

The National Pork Board, a federally mandated organisation administering programmes for pork producers, and the 21st Century Pork Club, an association of farmers, distributors and others with interests in the industry recently discussed the issue. Farmers have been selling corn at more than US$3 a bushel. That's a 60 percent increase from last fall, mainly due to more demand for corn by the ethanol, the USDA reported.

 

Researchers have been exploring the use of dried distiller grains (DDGS), byproduct of ethanol production as a possible new feed, said Paul Sundberg, the board's vice president of science and technology.

 

Any rise in the price of corn would also mean a rise in the price of DDGS. Feed growers could increase crop production by more than enough to accommodate the needs of pork farmers and ethanol producers, pointed out an analyst.

 

The board now plans to meet with the National Chicken Council, agricultural food giant Cargill and other groups in Washington to determine the best ways to spend research dollars.

 

It is estimated that even every acre of corn utilised for ethanol would mean replacing only 12.3 percent of the gasoline used in the US, according to a study by University of Minnesota researchers.

 

Research also indicates that non-food materials such as switchgrass, prairie grasses and woody plants to produce ethanol could offer greater energy output and less environmental impact than corn.

 

Incidentally, subsidies given to US corn producers have also been lately criticised.