Industry groups, including the National Cattlemen’s Beef Association, continue to voice their opposition to the slew of incentives for grain-based ethanol production that continue to skew the market artificially.

The groups sent a letter last month to the chairman and the ranking member of the Ways and Means Committee for the U.S. House of Representatives. They explained why the Volumetric Ethanol Excise Tax Credit and the import tariff on foreign ethanol should be allowed to expire in December rather than be extended.

“Although we support the need to advance renewable and alternative sources of energy, we strongly believe it’s time the mature corn-based ethanol industry operates on a level playing field with other commodities that rely on corn as their major input,” say the groups. “Favoring one segment of ag at the expense of another doesn’t benefit ag as a whole or the consumers who ultimately purchase our products. The blender’s tax credit, coupled with the import tariff on foreign ethanol, has distorted the corn market, increased the cost of feeding animals, and squeezed production margins, resulting in job losses and bankruptcies in rural communities across America.”

Though there’s been recent relief in corn prices, the letter points out prices are still 50% higher than when the Renewable Fuels Standard was enacted. In addition, from December 2007 to February 2010 the cattle-feeding sector lost a record $7 billion in equity due to high feed costs and economic factors that negatively affected beef demand.

“We support energy independence and the development of the renewable fuels industry,” say the groups. “However, 30 years of support has created a mature corn ethanol industry that now needs to compete fairly in the marketplace and allow for the next generation of renewable fuels to grow.”
See the letter at www.meatami.com/ht/a/GetDocumentAction/i/59068