Groups Call Food-vs.-Fuel Fight Truce

by Todd Neeley (DTN The Progressive Farmer) ... Now, representatives of two ag groups previously at odds over the RFS say they have moved on. The reason, they say, is that the 5 billion bushels of corn demand created by U.S. corn-ethanol production is essential for agriculture at a time when comparisons to the 1980s farm crisis are becoming more frequent.

Randy Spronk, managing partner of Spronk Brothers III LLP and past president of the National Pork Producers Council, operates a 250,000-head swine operation and farms about 3,600 acres of row crops near Edgerton, Minnesota.

"We're coming down to a reset process on inputs," Spronk said. "Last year on the crop side was the worst year in a decade. I'm on both sides. I'm a competitor for corn, and I raise it to be profitable. Through hedging, we've been OK."

A rise in corn prices caught many pork producers and other livestock farmers off guard, Spronk said. Many pork producers were driven out of business by a lack of risk-management plans.

"We're supportive of it (the RFS)," he said. "The industry (pork) survived the quick ramp-up. We're not lobbying either side of it. I'm your customer and your competitor. We're now on the same side promoting profitability on the corn side."

Chris Novak, chief executive officer of the National Corn Growers Association, said hog industry losses in 2009 on the heels of $8 corn were greater than the industry experienced in 1998.

In 1998-1999, there was a 27-month span when falling hog prices cost the industry more than $4.7 billion in farm equity. In November 2009, those losses topped $4.7 billion.

Renewable Fuels Association President and Chief Executive Officer Bob Dinneen said though expanded ethanol production was largely blamed for woes in the livestock industry, "Mother Nature was to blame for much of the feed expense increases.

"It became an attack on RFS policy when the underlying problem was the weather," he said.

"Not everybody's ship was able to rise together," he said, "although early on, RFS talk was that prices in corn will go up -- raising ships for everyone. That wasn't the case for many livestock producers who walked away."

Dinneen said the rise in corn prices caused in part by the ethanol boom also hurt many ethanol companies.

Spronk said the food-versus-fuel debate resulted from not all segments of agriculture and ethanol having a dialogue.

"On the crop side, I had some of my most profitable years," he said about the ethanol ramp-up. "But there was a strong sense of unfairness among livestock producers."

The RFA and other ethanol groups point to food deflation dating back to mid-2016 as corn-ethanol production expanded as evidence the RFS had little effect on food prices.

The U.S. Bureau of Labor Statistics data shows the U.S. is in the middle of food deflation starting last fall and continuing so far in 2017.

"What changes this current farm situation?" he (Novak) said. "At the end of the day, for us farm bill programs will help. But the real problem farmers see is with growth and demand (for commodities). Our promise (as corn growers) is the opportunity for growth in the ethanol sector." READ MORE and MORE (Tri-State Livestock News) and MORE (Energy.AgWired .com) and MORE (The Southern) and MORE (New York Times)