The argument over how much of a factor ethanol has become in driving up food prices has gotten hot enough in the recent days to put Rick Tolman, the president of the National Corn Growers, a
ART HOVEY / Lincoln Journal Star | Posted: Sunday, May 11, 2008 7:00 pm
The argument over how much of a factor ethanol has become in driving up food prices has gotten hot enough in the recent days to put Rick Tolman, the president of the National Corn Growers, at a podium to play some defense.
The next day, David Hawkins, a spokesman for the Natural Resources Defense Council, sounded anxious during a stop in Lincoln to move away from the blame game and on to the next stage in the renewable energy future, where cornstalks, switchgrass and other sources of biomass are expected to displace grain in ethanol recipes.
But apart from the food-fuel fight, there’s also the feed-fuel dispute about ethanol in agricultural circles in Nebraska.
In just three years, a renewable fuels mandate has increased the portion of the state’s corn crop used to make ethanol from 18 percent to 32 percent. The corn price has rocketed upward from less than $3 a bushel in 2006 to almost $6 a bushel in 2008.
But even as corn producers celebrate their good fortune, the mood in the ranks of the Nebraska Cattlemen might remind you more of a thunderstorm and critters stampeding madly through a hole in the pasture fence.
“Our government is favoring one corn user over another,” said Michael Kelsey, based in Lincoln as the Cattlemen’s executive vice president.
“They’re favoring ethanol over us.”
For the record, the state’s largest livestock organization wants to transition away from the 51-cent blenders credit that pads potential ethanol profits over the next several years. The same goes for the 54-cent tariff that holds back imported ethanol from Brazil.
As cattle feeders have gritted their teeth over the rising cost of corn, a primary ingredient in feedlot rations, they haven’t grown any fonder of a recent decision by Congress to double the mandate for renewable fuels made mostly with corn from 7.5 billion gallons per year to 15 billion gallons by 2015.
“We’d just as soon, quite frankly, see the renewable fuels standard go away,” said Kelsey.
The Cattlemen aren’t anti-ethanol, he said. But the demand should be market driven, just as the demand is for beef.
“What we contend, what we desire, is simply a level playing field to compete for corn.”
Cattlemen concerns put corn growers in a tight spot. They don’t want ethanol momentum blunted. But they don’t want to see cattle feeders suffer either.
After all, said Don Hutchens, executive director of the Nebraska Corn Board, livestock still consume more corn than ethanol plants.
“The last thing we want to see,” said Hutchens, “is the cattle industry exit the state of Nebraska or, heaven forbid, exit the United States.”
Hutchens is anxious to point out that the Corn Board — which spends checkoff fee money from the sale of corn raised by some 26,000 Nebraska corn producers — is putting much of that money where its mouth is.
In spending terms, “Nebraska used to be the number one state supporting international corn exports,” he said.
Not anymore. The new spending priority for his board is on promoting meat exports.
“We now spend three times more corn checkoff dollars promoting red meat exports than we spend on bulk corn exports.”
It adds up to about $360,000 a year.
He regards that as a much better response to ethanol-related tensions and cattle-feeding costs than yelling and finger-pointing.
“There’s obviously a very strong mutual respect for each of our positions relative to the industries we represent,” he said. “Obviously, corn growers have worked very hard for 30 years to pull ourselves up by our bootstraps and develop the ethanol industry.
“It’s taken a very long effort in research, in market development, in lobbying.”
Kelsey is careful to note that the Nebraska Cattlemen organization was the first state-level beef group in the nation to convey its strong ethanol reservations to its parent organization, the National Cattlemen’s Beef Association.
But he’s not interested in stirring up trouble with the corn crowd either.
There are still broad areas of agreement between corn and beef producers in such policy areas as trade, environment, and animal welfare.
“The corn board, the corn growers are very strong and very credible allies of ours,” he said, “and they are very welcome in terms of us working together.”
Hutchens’ attitude isn’t as accommodating toward those who blame ethanol for higher food prices.
“Energy costs are the culprit,” he said. “Agriculture can take some responsibility for higher food costs. But it’s nothing compared to what higher energy costs have to bear.”
Reach Art Hovey at 473-7223 or at ahovey@journalstar.com