USDA programme questioned by meat and livestock groups

Officials from the nation's leading meat and livestock associations have signed and sent a letter over to Agriculture Secretary Ed Schafer with queries on the agency's plans to guarantee loans to ethanol plants that struggled to pay for high-priced corn this past year.

The eight organizations said in a letter such a program would be a startling new development that discriminates one segment of American agriculture, highlighting that livestock producers and meat processors also struggle with the risks associated with betting on future prices for corn.

The group also wanted Schafer to know that being in the animal agriculture industry; they are particularly concerned that he would consider extra support for the corn-based ethanol industry, noting the Renewable Fuel Standard mandate and the blender's credit that already supported the ethanol industry.

USDA Press Secretary Keith Williams said the groups have mistaken the Business and Industry Loan Guarantee Programme as a cash grant to ethanol, when actually the programme is in existence to provide loan guarantees to any rural business since 1974, not targeted at ethanol businesses.

The credit quality of each B&I application is thoroughly reviewed. In particular, USDA reviews the borrower's cash flow, collateral, equity and management and also the status of its industry. Financial statements, insurance, appraisals, business plans and feasibility studies are also analysed and reviewed.

The eight groups are the American Meat Institute, National Cattlemen's Beef Association, National Chicken Council, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers.