4-30 news: Livestock and poultry coalition calls for end of ethanol subsidies, protective tariff
“Although we support the need to advance renewable and alternative sources of energy, we strongly believe that it is time that the mature corn-based ethanol industry operates on a level playing field with other commodities that rely on corn as their major input,” the groups wrote in a letter to Michigan Congressmen Sander M. Levin and Dave Camp, the chairman and ranking Republican member, respectively, of the tax-writing committee. “Favoring one segment of agriculture at the expense of another does not benefit agriculture as a whole or the consumers that ultimately purchase our products.”
The groups noted their serious concerns over the negative economic effects that government support for corn-ethanol has had on animal agriculture, specifically the Volumetric Ethanol Excise Tax Credit (VEETC) and the import tariff on foreign ethanol.
“While we support the need to advance renewable and alternative sources of energy,” said the groups, “we strongly believe that it is time that the mature corn-based ethanol industry operates on a level playing field with other commodities that rely on corn as their major input.
“The blender’s tax credit, coupled with the import tariff on foreign ethanol, has distorted the corn market, increased the cost of feeding animals, and squeezed production margins -- resulting in job losses and bankruptcies in rural communities across America.”
The groups pointed out that a September 2008 report by the Congressional Research Service (CRS) stated that the dramatic increase in livestock production costs were attributed to higher costs for feed. The CRS report said that “the main driver was feed, which may account for 60%-70% of total livestock production costs in any given year.” Between 2005 and 2008, corn prices quadrupled, reaching a record high of more than $8 a bushel; a pattern that is unsustainable for our industries, the groups said.
“There is no safety net to protect against the volatility in the commodity markets, forcing all industries to pay higher prices for input costs due to the fluctuations in the corn market,” the groups wrote. “While there has been some recent relief in corn prices, current market prices are still 50 percent higher relative to pre-RFS conditions.”
The groups said animal agriculture has suffered serious economic hardship, including:
* The turkey industry has endured the deepest cutbacks of any in animal agriculture – a decrease in turkeys raised of more than 6 percent since 2007 levels and a near 9 percent reduction from 2008 levels – to adjust to these increased input costs. More importantly, the turkey industry eliminated nearly 3,000 jobs vital to rural America in 2008 and 2009 alone.
* The U.S. pork industry endured the two most challenging years in the industry’s history in 2008 and 2009. Total losses for the industry amounted to more than $6.2 billion and average farrow-to-finish operations lost nearly $23 for each animal marketed from October 2007 through January 2010. This financial disaster occurred despite near-record hog prices in 2008.
* From December 2007 to February 2010 the cattle feeding sector of the beef industry lost a record $7 billion in equity due to high feed costs and economic factors that have negatively affected beef demand.
* The cumulative additional cost on the broiler industry since corn prices began their rise in the fall of 2006 has been almost $15 billion, as of April 2010. This additional cost does not include the higher cost of other feed ingredients, such as soybean meal, whose prices tend to move in tandem with corn. Accordingly, broiler companies have suffered reduced profitability.
The groups reminded the committee that animal agriculture is united in its support for energy independence and the development of the renewable fuels industry.
“However, 30 years of support has created a mature corn ethanol industry that now needs to compete fairly in the marketplace and allow for the next generation of renewable fuels to grow,” they said.
John Soules Foods recognized for job creationJohn Soules Foods, a fajita processor and a leading producer of marinated, pre-cooked and other meat products, was recognized by Texas Secretary of State Hope Andrade for the company’s steady contribution to job creation and economic development in the state of Texas. Secretary Andrade also commended the company and its employees for more than 23 years of positive community impact in Tyler.
When native Texan John Soules Sr. formed John Soules Foods in 1987, he sought to expand its reach and solidify its status as the region’s trusted provider of meat products. As the company grew, so did its commitment to the people of east Texas and the city of Tyler. The company’s Tyler facility tragically burned to the ground in 1994, and company leaders decided to re-build for growth, opening an 83,000-square-foot USDA-inspected meat processing facility on 67 acres of land just north of Tyler. At the time the new facility was built, John Soules Foods employed 65 people. In the years since, the company has completed two growth projects, expanding the plant to a total of 240,000 square feet containing two high-volume production lines. John Soules Foods now employs more than 500 people in full-time positions in Tyler.
In addition to employing hundreds of Texans, John Soules Foods is proud to contribute to the local economy through the purchase of meat, poultry, packaging materials and ingredients from companies statewide. John Soules Foods estimates that it purchases $50 million annually from Texas companies in order to service its customer base of major foodservice and retail customers.
“Our company has always felt an affection for and loyalty to the state of Texas, the east Texas region, Smith County and the city of Tyler,” says John Soules, Jr., co-CEO of John Soules Foods. “As we continue to serve clients nationwide and internationally, we appreciate the hard work of every employee and ongoing support of the city of Tyler, Smith County and the state of Texas.”
Source: John Soules Foods
Brunswick stew recalled due to allergensThe Murphy House, a Louisburg, N.C., establishment, is recalling 414 lbs. of Brunswick stew products because they contain cracker meal with undeclared allergens, wheat and milk, the U.S. Department of Agriculture's Food Safety and Inspection Service announced. Wheat and milk are known allergens, which are not declared on the label.
The products subject to recall include 5-lb. packages and 24-ounce cups of “Murphy House Barbecue Our Old Fashioned Brunswick Stew” produced on April 2, 2010.
Each package bears the establishment number “EST. 2135” inside the USDA mark of inspection. Cases and individual packages bear the sell-by date of 05/17/10. The beef stew products were distributed at the wholesale and retail level in North Carolina.
The problem was discovered during a Food Safety Assessment of operations at the establishment by FSIS personnel. FSIS has received no reports of adverse reactions due to consumption of these products.
Cattle futures rise, hogs declineCattle futures rose for the first time in three sessions as a decline in the dollar improved prospects for U.S. beef exports. Hogs declined.
According to Bloomberg reports, the dollar fell the most in more than two weeks against a basket of six major currencies. The U.S. sold 87 percent more beef to overseas buyers in the four weeks ended April 22 than in the same period last year, the U.S. Department of Agriculture said today. Pork exports this year through February were up 1.9 percent from a year earlier, according to the most-recent data.
Beef exports “were good, so if the dollar can stay lower here, that should firm things up,” said Christian Mayer, a market adviser at Northstar Commodity Investments Co. in Minneapolis. “We do have help from the outside markets today, which are more in favor of beef and pork working higher.”
Cattle futures for June delivery climbed 0.45 cent, or 0.5 percent, to 93.875 cents a pound on the Chicago Mercantile Exchange. The price fell 2.2 percent in the previous two sessions as the dollar index surged to the highest level in almost 11 months. Feeder-cattle futures for August settlement gained 0.3 cent to $1.15825 a pound.
Hog futures for June settlement slipped 0.775 cent, or 0.9 percent, to 83.825 cents a pound on the CME, after earlier gaining as much as 0.4 percent. The most-active contract is up 26 percent in the past year, as losses spurred by high feed costs and swine flu forced farmers to cut herds.