Cattlemen are against subsidized ethanol

By Jim Stafford

Published: August 1, 2008

The Oklahoma Cattlemen's Association bolstered its stance against a subsidized ethanol industry Thursday when its Beef Production Committee adopted a resolution that stated its opposition.

In a meeting on the opening day of the group's 56th annual convention at the Reed Center in Midwest City, the Beef Production Committee re-adopted a resolution first passed in 2005 that urges the National Cattlemen's Beef Association to "strongly oppose tax subsidies and work with other groups to eliminate these subsides as soon as possible.”

Cattlemen don't oppose the use of corn-based ethanol as an alternative fuel, said Scott Dewald, executive vice president of the association. But they do oppose tax credits and tariffs on foreign ethanol that subsidize the industry and encourage more use of corn as the fuel source.

"What our guys really want is for ethanol to stand on its on two feet without the tax credit and the tariffs,” Dewald said.

Congress has mandated use of about 9 billion gallons of grain-based ethanol by the end of 2008, a number that eventually will grow to 15 billion gallons, said Derrell Peel, a professor and extension livestock specialist at Oklahoma State University.

Mix in other forms of biofuels and the number is supposed to be 26 billion gallons by 2022, Peel said.

"Subsidies have always been a sore point with the cattle industry, and it really became a sore point when ethanol took off,” Peel said. "That's a consistent cattle industry position. They perceive themselves to be a very free market-based industry.”

As ethanol production has increased, the price of corn as a key ingredient in cattle feed has increased, Dewald said. It hurts the entire cattle industry supply chain. "It's not just feed though,” Dewald said. "We find ourselves in a situation where we are facing $4 diesel fuel, we're facing fertilizer costs that are out of the world, and all of our input prices have gone up. It's getting very, very difficult to make a living in the cattle business today.”

The cattle industry wants the Environmental Protection Industry to scale back mandates for ethanol use, Dewald said. Congress provided some leeway when it passed the bill the mandated ethanol use as an alternative to fossil fuels.

The Beef Production Committee made an amendment to the ethanol resolution before adopting it as one of about three dozen resolutions the full group will vote on in a business meeting before the convention concludes. The committee took out a reference to ethanol tax subsidies artificially raising feed grain prices up to 50 cents per bushel

"Three years ago when passed the resolution, we thought it was going to impact the cost by 50 cents a bushel,” Dewald said. "It impacted the cost far more than that so we removed the 50 cents a bushel. You could say the costs have exceeded our expectations.”

The Beef Production Committee also heard a presentation from state Conservationist Ron Hilliard, who outlined the impact that the latest farm bill would have on three programs often used by cattle producers to control brush and protect grassland areas.

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