June 7, 2006

 

Ethanol proves to be a blessing for Iowa's cattle farmers
 

 

While ethanol is causing worries of rising corn prices in other states, it is generating much excitement among cattle producers in Iowa, the state with the largest number of ethanol plants.

 

Iowa's ethanol capacity is expected to be high enough next year to completely replace gasoline in the state. This meant a proportionally large amount of distillers dried grains (DDG) churned out by these plants.

 

Industry watchers say DDG would be an economically and nutritionally better cattle feed product than corn.

 

Moreover, it would be cheaper for ethanol plants to ship the co-products to a nearby livestock operation than elsewhere, meaning that cattle producers near these plants would benefit.

 

Crowds of cattle producers, bankers and others thronged a meeting Monday (Jun 6) to hear industry experts say now would be the time to grow Iowa's cattle industry.

 

As of June, Iowa ethanol plants produced 3.0 million tons of DDGs. That number is expected to grow to 8.0 million tonnes when proposed plants come online.

 

Currently, the state produces 1.5 million fed cattle, about 8 percent of US production.

 

Dave Fisher a cattle producer in Iowa, sees more finishing operations locating themselves closer to ethanol plants and expects herd expansion in the state.

 

However, Larry McAllister, a former cattle producer who switched to hog production said the opportunity might have hidden minefields.

 

Because of Iowa's cold climate, the savings brought about by DDG would have to cover building facilities for the cattle, he said.

 

He also pointed to a lack of meatpacking operations in the area which would hamper the cattle industry if producers have to ship their cattle far away.

 

Still, McAllister said he would consider switching back to beef production if it is viable to do so.