October 15, 2010

US pork council raises concern on ethanol decision

The US National Pork Producers Council (NPPC) has voiced its concern about the effect on America's pork producers of raising to 15% the amount of corn ethanol that can be blended into gasoline.

The decision to increase the corn ethanol amount was announced on Wednesday (Oct 13), and was communicated by the US Environmental Protection Agency.

The NPPC said it is "withholding comment on raising the blend rate to EUR15 from its current EUR10 until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers."

The council said is expecting corn prices and the cost of raising a hog heading up, given that the USDA's October 8 crop report revised down the expected yield and ending stocks of corn.

The NPPC said not to want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of almost US$24 a hog from October 2007 through March 2010, and the industry lost nearly US$6 billion.

According to the council, "family hog farms went out of business during that time, and many producers reduced the size of their herds.