Support Builds for Easing of Ethanol Fuel Blend Requirements

22 August 2012, at 9:09am

CANADA - The chair of Manitoba Pork Council says, in the wake of concerns over feed grain availability this winter due to drought, support is building for changes in government policies that encourage the use of ethanol fuel blends.

The USDA's recent cuts to its US corn production estimate and its forecast that US 2012-2013 corn ending stocks will fall to 650 million bushels, the smallest carry-over since 1995-1996, are getting part of the blame for a rapid 50 per cent increase in corn futures pricing.

Manitoba Pork Council chair Karl Kynoch says the drought in the US has reduced the availability of feed grains and the amount of grain going into the ethanol industry is raising concern over the availability of grain to feed livestock.

Karl Kynoch-Manitoba Pork Council:

The ethanol policy has really expanded that industry in the US and is taking a lot of grain off of the market that is used for food.

I believe they have about a ten percent ethanol blend going on right now and they have talked about raising that to 15 or 20 per cent.

I guess the one thing that we want to see right now is that they hold off doing any increases in ethanol for we're at a very critical time right now when we need to make sure we have enough grain corn for food let alone before we concert it to fuel.

We're seeing a lot of support for that. Basically it started out of the US.

The livestock producers in the US are pushing to hold back on that and we're now even seeing other countries pushing to actually reduce the demand for that blend.

There's a lot of support for that and, if we understand right, the government in the United States US is starting to take that very seriously and look at it so, again, we'll have to watch that very close going forward.

Mr Kynoch notes further into the US south there's as much concern over access to water so there's a tremendous number of both cattle and hogs going to market in the US and we're also seeing that in Canada where operations have started to ship out animals.

He suggests the number of animals that go to market over the next couple of months will also play a huge role in demand for feed.

For Farmscape.Ca, I'm Bruce Cochrane.