By DOUG SCHMITZ
Iowa Correspondent

HOLT, Mich. — While most Midwest agriculture officials are supporting the higher ethanol blends increase to 15 percent, state pork producers across the region have raised their own concerns about the EPA’s proposed move that would likely impact their overall input costs with further inflated feed costs.

That’s why Sam Hines, executive vice president of the Michigan Pork Producers Assoc. (MPPA), said Michigan pork farmers are understandably concerned about the prospect of raising the cap on blending ethanol into gasoline from the current rate of 10 percent to 15 percent.

Mostly because of higher feed costs, Hines said Michigan pork producers since October 2007 have lost an average of $20 on every hog marketed and the industry has lost nearly $3.5 billion in equity over the past 18 months.

“With that as a backdrop, Michigan producers are wary of any action that has the potential to further disrupt feed prices,” he said. 
Now with the National Pork Producers Council (NPPC) recently asking the federal government to study the economic impact of an expansion of corn-ethanol production, Hines said the MPPA agreed that such a study is vitally needed. 

“As the NPPC pointed-out in its request to the administration, pork producers have not opposed the use of ethanol and the country’s goal of producing 15 billion gallons of corn ethanol by 2015, but the industry has paid a price in the form of much higher feed costs,” he said. Moreover, with the economic distress the pork industry is currently experiencing, Hines said his state’s pork producers could ill-afford any additional major disruptions in input costs.

“At the very least, it would seem a clear understanding of the consequences of raising the blend rate be thoroughly investigated and its impact on all users of corn be fully understood before such action is taken,” he said.
 
“MPPA is in full support of NPPC’s request for an economic impact study and Michigan pork producers are hopeful the administration will take steps to implement one,” he added.

In January 2008, voting delegates at the Iowa Pork Producers Assoc. (IPPA) Annual Meeting in Des Moines adopted a formal ethanol policy and passed a resolution vowing continued support of the federal government’s Renewable Fuels Standard.
But the IPPA ethanol policy included a resolution approved by delegates that stated the association would support the Blender’s Tax Credit and Import Tariff for Ethanol until they expire on their respective sunset dates.

“The Iowa Pork Producers Assoc. does not have a policy or position on the proposal to increase the ethanol blend to 15 percent,” said Ron Birkenholz, IPPA communications director.

Although the IPPA didn’t release an official statement regarding the recently proposed ethanol blend increase, last month it said the nation’s leading pork-producing state’s “burgeoning corn-based ethanol industry is creating new challenges for the pork industry and raising many questions about how pork producers can remain profitable.”

“While no one really knows for sure what the future will hold, research is showing that increased ethanol demand for corn may force pork producers to make some tough decisions,” the IPPA said in the May 30 statement.

While it has been a difficult time for U.S. pork producers – and now American dairy farmers – especially with concerns about any changes that could impact their feed costs, Iowa Agriculture Secretary Bill Northey said he believes that the ethanol industry and livestock production can coexist.

“The livestock industry is vital to Iowa and I certainly understand their concerns,” said Northey, a fourth-generation farmer who still grows corn and soybeans on his farm near Spirit Lake, Iowa.
Through the expanded use of ethanol co-products and continued improvements in the efficiency of ethanol production, Northey said he’s confident the U.S. could continue moving towards energy independence, while maintaining the safe, abundant and affordable food supply the nation now enjoys.

“What I’ve seen suggests that an E15 blend is safe for cars and the distribution system, and reduces pollution,” he added. “(But) we need these decisions on blend levels to be made on the basis of sound science and information.”