March 10, 2009

Pork producers in the US want Congress to reduce the 45-cent per gallon tax credit to ethanol makers over the next five years to help reduce the cost they pay for corn to feed their hogs.

During the Pork Forum in Texas over the weekend, swine farmers have also called for a 10 percent cap on the US Renewable Fuels Standard as ethanol trade group has asked the government to boost the rate of ethanol blended into gasoline to as high as 15 percent.

Newly elected National Pork Producer Council (NPPC) president Don Butler said that "they are competing in a world where the use of ethanol is mandated and corn-based ethanol is subsidised".

He said that while pork producers are "still haemorrhaging, we do see some reason for things being better before the end of 2009."

Pork farmers last year watched corn prices rise to a record high of US$7.65 per bushel in June but have since tumbled 53 percent.

Pork and other livestock producers have blamed the mandated use of corn to produce ethanol for rising feed prices.

Butler said the cost of everything to produce pork has gone up and the industry is doing everything it can to get back on a profitable trajectory.

He said reductions in the number of hogs produced worldwide will benefit the US producer who has only cut about 2 percent from a year ago. The NPPC official also noted that producers of other types of meat and protein sources cutting back as well, which should create opportunities for pork producers.

He said in the global scenario of supply and demand of protein, pork is still well-positioned and its demand is seen to increase.