January 18, 2007

 

Canadian pork seminar: Biofuel use to change hog industry

 

 

Major change is forecast for agriculture over the next 30 to 50 years, and the development of the biofuel industry will be one of the trends shaping the hog industry, Cargill Canada President Len Penner said Wednesday (Jan 17).

 

Penner told participants at the 36th annual Banff Pork Seminar that ethanol production will have a greater impact on agricultural markets than energy markets.

 

He forecast higher feed costs for livestock producers as a result of any US government decision mandating ethanol usage.

 

Cargill disagrees with any political decision to mandate the use of ethanol and biodiesel, according to Penner, as it distorts the market. Biofuel demand should be left to the market to determine the level of use, he said.

 

Penner identified two other trends.

 

The first is producers should be prepared for greater competition from South America, Asia and Eastern Europe as the flow of production changes, whether it involves livestock, grain, fruit or vegetables.

 

Penner noted that the changing trade flow is as much a function of demand as increased production. Increasingly affluent Chinese and Indian populations are bringing another 3 billion people as consumers, he said.

 

Producers may not be comfortable with these changes, he said, but they must find ways to capitalise on them.

 

The second trend that producers have to be aware of, according to Penner, is changes in consumer trends as consumers make greater demands for healthy and environmentally friendly products.

 

In questions following his presentation, Penner said that Cargill feels that the Doha Round of World Trade Organization talks are "dead" and that new negotiations will be needed to bring the world closer to free and open market access.