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Call for Contingency Plan for Feed Grains

by 5m Editor
4 February 2011, at 9:36am

IOWA, US - Iowa Pork Producers Association delegates at last week's annual meeting in Des Moines say they are concerned about the tight corn supply.

They want the National Pork Producers Council to begin a discussion with other end-users and Washington. D.C. policy makers about contingency plans in case there is a short crop in 2011. After a lengthy discussion, a resolution asking for contingency plan was referred to the IPPA executive committee, according to AgriNews.

Executive committee members discussed the resolution after the meeting and agreed to forward it to NPPC's Pork Forum in March, said President Leon Sheets, an Ionia pork producer.

Producers said that with biofuel production, exports and livestock feeding all in need of corn and this year's corn crop expected to result in a very tight stocks-to-use ratio they could run short of corn.

"A drought or natural disaster that would leave our current stock-to-use ration at less than 5 percent would increase input costs and make it difficult for livestock producers, specifically pork producers, to feed their animals," said Chuck Wirtz, a Whittemore pork producer who proposed the contingency plan. "We really need to talk about what would happen if there was a tremendous drop in supply. Once you have that piglet, you have to feed it. There should be a plan."

"Having enough corn to feed pigs is probably not going to be a problem in Iowa, but it could be in other states," said 2010 IPPA President John Weber of Dysart. "Our delegates decided why wait until we have a short crop to talk about this? We agree that the market will sort it out."

Mr Sheets said producers aren't asking to return to the days of grain reserves, they just want to have some type of contingency if corn supplies are short. He said producers prefer that end-users create their own plan so that the government doesn't get involved.

"We want to discuss this in an orderly way," Mr Sheets said. "We want to know that there is a plan in place so there will be enough corn for exports, ethanol and livestock production."

"We don't want our government to wait until an emergency occurs before it reacts," said LeMars pork producer and IPPA president-elect Bill Tentinger. "That could result in a knee-jerk reaction like what happened when Russian banned wheat exports. We don't want to be in a situation where the federal government bans corn exports."

Such action could result in retaliatory strikes and then "we're like kids throwing things in the sand box and nothing is solved," Mr Sheets said.

Delegates also passed a resolution to allow the ethanol blenders tax credit and the ethanol import tariff to expire on corn-grain ethanol in 2011 and shift those dollars to ethanol distribution infrastructure.

"I don't think that the tax credit was meant to be a forever deal," Mr Wirtz said. "It was meant to help a fledgling industry get established. At some point you have to take the training wheels off the bike."

"We're not against ethanol," said Mr Tentinger. "We're pro-pork. We're here trying to figure out how we're going to get through this thing and how we can all live together."