February 6, 2012

 

Ethanol subsidies annoy Canadian livestock producers

 

 

A recent study that blames ethanol production for a CAD130 million (US$130.6 million) rise in annual costs facing Canadian livestock producers is being supported by Kim Sytsma, Leeds County representative on the Ontario Cattlemen's Association, told newspaper Friday (Feb 3).

 

Canadian cattlemen have a legitimate beef when they claim a negative impact on their industry from ethanol subsidies, says an Athens-area farmer.

 

"Livestock producers are not criticising the grain farmers -- they are trying to make a living, too -- but the ethanol industry is highly subsidised and it is competing against the livestock producers, who are not subsidised, to buy grain (to feed animals)."

 

Not only are the livestock producers paying more for grain; they have difficulty expanding in this area because of a rush to grow corn to supply the four-year- old Greenfield Ethanol plant in Johnstown, said Sytsma.

 

A report, titled "Impact of Canadian Ethanol Policy on Canada's Livestock and Meat Industry, 2012," was released in Calgary last week by the George Morris Centre and touched off a counter-offensive by grain growers and ethanol proponents.

 

Sytsma, who raises beef cattle on an Athens-area farm with her husband Charlie, said the issue is complicated. She acknowledges there are some benefits to ethanol production, including a high-protein distiller's grain for cattle feed that is a by product of the manufacturing process.

 

But the promise of lower-cost distiller's grain to replace traditional grain sources has almost evaporated and is now a minimal saving of about US$10 a tonne, said Sytsma.

 

Meanwhile, critics of the report, which was funded by the Canadian Cattlemen's Association, Canadian Pork Council and Canadian Meat Council, argue its conclusions are filled with errors.

 

"I don't think they're putting out the whole truth," Don Kenny, chairman of the Grain Farmers of Ontario, said during a phone interview. Kenny said distiller's grain from ethanol producers is a better quality feed that is available at lower prices than other grains.

 

Moreover, many cattlemen also grow grain crops and benefit directly from higher prices, he said.

 

"We're all in this together," he said, adding he would like to see the different sectors co-operate on raising the value of the entire agricultural industry, rather than "pointing fingers" of blame at the ethanol industry.

 

Notably, livestock prices are near record-high levels, which is good for grain farmers whose livelihoods depend on healthy beef and pork sectors, said Kenny.

 

In addition, he said corn yields in Ontario are growing rapidly and without the ethanol industry, there would be a serious glut on the market, which would cut into farm income.

 

Kenny said the increase in corn production since 2000 is almost equivalent to the amount going into ethanol production. He added ethanol constitutes 5% of most gasoline blends and reduces greenhouse gases by more than two million tonnes a year, the same as removing 440,000 cars from the road.

 

Ryder Lee, who is manager of the Canadian Cattlemen's Association, said he recognises the benefits to corn growers from the growth of the ethanol industry, but maintains it is still unfair to livestock producers as reported in the Morris Centre study.

 

"I'm not against the ethanol industry or fair grain prices, but we would like to compete in an open market," said Lee. Instead, ethanol producers receive government subsidies, including significant assistance to build their plants, and the ethanol is mandated for use in gasoline, allowing the industry more latitude to purchase grains at the expense of livestock producers, he added.