The Ethanol Mandate is Killing the Cattle and Hog Industry – Kevin Grier, George Morris Centre

[jensend]

the second part of the question is what is the cost of that energy?

[grassfarmer]

Lots of interesting comments but a few points are not being aired in my opinion. No 1 what is the efficiency of ethanol? - ie how much fossil fuel do we burn to produce the fertiliser, fuel the machinery, grow the crop, harvest it and truck the ddg to a feedlot? I suspect the whole thing is a bogus enterprise producing little or no extra net energy.
No 2 most farmers are under the illusion that there is a "cheap food policy" because their farm receipts barely cover the cost of production. You can't ignore the role of processors and retailers in keeping prices to farmers low and ultimately they have a bigger role in determining future prices farmers receive than either farmers or consumers wishes. Food takes a lesser % of consumers dollars than in the past but that doesn't necessarily make it cheap - most of the problem is farmers are selling only raw materials and not getting paid for them. Funny whenever supply management is mentioned all the farmers complain that cheese is too dear. You can't have it both ways - you don't like a "cheap food policy" but when a sector gets an adequate return to cover their investment you don't like that either.

[newguy]

Counties that do not export much grain may be better off to subsidize their food for security. Counties like US that exports grain and imports oil it is a no brainer where the tax payers dollars should go.

[grassfarmer]

Newguy, that would only be the case if ethanol production returned a reasonable quantity of ethanol to replace the fossil fuel consumed to produce it. I'm not convinced that case has been made yet.

[newguy]

. Watched an American news when in the States and they classify ethanol as being part of their National Security. And we all know when it comes to Nation Security in the US it does not need to pencil out.

[TOM4CWB]

Burnt,

"Ummm, seems to me that if farmers don't like producing cheap food they shouldn't do it."

Take your own advice there ole fellow... the days of cheap meat are over. Good thing. Eat more beans peas and cereals.

The price of Corn has WAY more to do with the price of BLACK OIL... same with soy and canola.

I am very disappointed in the GMC... too many directors bought into big livestock... and so their work is less helpful every year.

BLACK OIL is the issue and problem... as long as the 'global warming religion' rules... oil will go higher... conservation will occur... new supplies found... efficiencies found for ethanol production... biodiesel... this IS GOOD!!!

70 percent of the economy in 3rd world countries is about agriculture. High prices will be good for anyone that produces food. IN CANADA for Welfare bums...perhaps many could find a garden spot if they would drop the drugs/ booze and do a little work.

[ASRG]

I agree with TOM on this one. Petroleum is high and society has decided we need to get off the fossil fuel treadmill. They want fuel and they want alternatives to oil and it appears they are willing to pay for it.
Ethanol probably doesn't make much sense from a "net" energy perspective right now, but it might be a stepping stone to something better? Switch grass apparently has the potential to not only create fuel but also plastics....someday we might be able to replace a lot of grainland with switch grass?
We are told again and again we must reduce C02. The best way possible is growing trees....what about re-planting the forests in the parkland areas....and paying the farmers a real market value for carbon capture?
If society wants fuel and reduced GHG (and are willing to pay for it) that is what we should be trying to provide?
I further think TOM might have hit it on the head when he said the days of cheap meat are over? Maybe meat should be considered a luxury instead of a staple and be priced accordingly?

[charliep]

Wheatking

The conversion factor to dried distiller grains is about 30 %. That is, one tonne of corn yields about 300 kg of ddg (both 10 to 12 % moisture).

Energy is actually fairly high on corn ddg - oil in corn left behind.

Protein is also likely meaning overfeeding relative to the animals needs - not sure on the impact on nitrates in manure/urine.

Feedlots (from what people tell me) like the impact of ddg's on animal performance. Can use up to 30 %.

Wheat ddg is different than corn.

Haven't done any work on the energy balance of ethanol - has been lots of work done though. Example below from USDA.

[URL="http://www.usda.gov/oce/reports/energy/2008Ethanol_June_final.pdf"]corn ethanol[/URL]

[Braveheart]

There is no doubt that high grain prices contribute to difficulty in keeping the hog industry viable. Beef production could be a different story. Those amazing 4 stomachs on a cow, if supplied with the right amount and type of protein can use all sorts of byproducts to maintain themselves and grow. A litle good hay, or DDGs, can help a cow winter on straw. I think the future is bright for beef because they can use all sorts of fiber type byproducts. The only limit is imagination.

In terms of greenhouse gases (I don't personally subcribe to the Al Gore crappola) cattle eat forages. In my mind one of the best methods of carbon banking is the production of perennial forage.

I love cows for what they can do. The way they convert grass to meat and if planned correctly, they can do most of the work themselves even in winter eg. stockpiled pasture, swath and bale grazing, and use no fossil fuel to do it. The only thing better would be to have green cows. When they got out in the neighbours crop he couldn't see them.

[charliep]

One sentence confusing. Meant to say distillers grains have high protein over and above an animals needs.

[burnt]

Tom - that is exactly what I am doing. My herd has dropped by 1/3 and will very likely be gone this fall. I refuse to work for less than I am worth.

You and others make some very good points, while not likely fully realizing the entire impact of what you are saying.

I, too, agree that meat has been too cheap for too long, mainly because it has been unprofitable to produce beef for many, many years.

The portion of cost not being covered at the checkout was being offset by cheap feed, as was already mentioned, and by eroding producer equity, eg. - living on depreciation.

While it certainly makes sense to produce beef on land that is suitable for only that purpose, I see some real problems with isolating meat production to such certain geographical areas.

The only ones that I will point out is that it goes against what I see as a naturally complementary production system and also that the price of meat should be sufficient (taking into consideration all benefits) to allow for production on any mainstream, non-specialized type of agricultural land.

So much more to say on this matter but I have probably already over-stated my welcome . . .

However, I will say this yet - in this day and age of (fiscal) infidelity, you should no longer expect that the one who brought you to the dance will necessarily be there to take you home.

Right now the ethanol industry is making overnight millionaires of many - and it can turn them into paupers just as quickly when the circumstances provide the initiative to switch to something sexier!

Take this from someone who was pretty well set before BSE and has now, at 55 years old, seen a decades worth of equity wiped out.

So when the ethanol market evaporates (and it will) you grain growers (and I am one also) will longingly remember the day when that empty feedlot beside your field had a few grain-eating cattle in it.

Lastly, remember this - the parameters in this industry are set by the rich, the stupid and the unscrupulous. Thus, there are no guarantees.

[burnt]

**should have read ". . . overnight millionaires of many grain farmers . . ."**

[Happytrails]

Terrific discussion all. Can't blame grain growers for cheerleading ethanol subsidies. Can the hype stand the test of time? The lucky among us will see.

There is no doubt that cheap food and grain in particular is a function of cheap and abundant energy in the form of oil. For greater society cheap food is a good thing. For farmers not. We have now reached the point apparently that greater society feels comfortable enough with their cheap and abundant food supply to start playing with it. I have always thought it wrong to play with food and now I guess we will see.

There are no doubt many factors which compromise the free market system to some degree. Still its a bit surprising to see the degree of confidence some have in artificial demand (subsidy).

For me, I will mostly keep on raising beef calves and feeders on land that is marginal for growing grain. IMO there is too much risk in putting all your eggs in the ethanol basket. HT

[newguy]

Think there was a way more artificial feed grain market before ethanol. US government would gaurantee 4 bucks for corn and then dump it for 2. So is the grain market artificially high or was it just artificially low before??Like anything extremes either way is probably not good.

[burnt]

newguy, IMO you are bang on with both scenarios - neither the highs or the lows accurately reflect real market conditions.

Ironically, having said that, I don't think grains are priced too high. However, the grain price is where it is for unsound reasons as was alluded to by happytrails.

But what we have is a result of governments screwing markets around with stupid policy. One sector gets played against the other, each taking its turn as the beneficiary of misguided, harmful gov't interference.

If feed grains had not been so undervalued for so many years, the N.A. cattle herd might not have grown to where it was and corn would have been less affordable/attractive for turning into fuel.

Everything would have been in a better balance.

Socialism sucks. Government should stick to maintaining law and order as it was intended to.

Consumers should be paying for the goods at the checkout, not through their taxes, where program costs are greater than any perceived producer benefit.

How do we work toward that end, or is it even possible anymore?