Food & Fuel: Both/And NOT Either/Or

When corn supplies are tight, it just makes sense to reduce the use of corn for ethanol, to ensure greater supply and more reasonable prices for livestock producers.  Or does it? 

I want to suggest that requesting waivers from the Environmental Protection Agency’s Renewable Fuels Standard (RFS) when corn supplies are low and prices are high is not the no-brainer that it might appear initially.  Instead, this is a potential minefield, and the livestock industry needs to move carefully through it. 

The RFS calls for production of 13.2 billion gallons of corn-based ethanol in 2012 and 13.8 billion gallons in 2013.  That will take about 4.7 billion bushels of corn this year and 4.9 bushels next year.   That’s a lot of corn. 

I’ll be the first to admit the numbers don’t look good.  USDA’s October projection for the U.S. 2012 corn crop is 10.7 billion bushels—down 13 percent from 2011 and the lowest production since 2006.  USDA expects yields to average 122 bushels per acre—25.2 bushels below the 2011 average, or the lowest yield since 1995.  Of course, it’s important to remember that one-third of the corn that goes into ethanol winds up as a by-product—distillers grains—which is used by the livestock industry as animal feed.   Nevertheless, these aren’t the numbers anyone who’s raising livestock wants to see.

However, I want to urge caution among those who produce beef and dairy products, poultry and eggs and pork.  Many livestock producers and the organizations that represent them are joining forces with others who say that corn belongs in the food chain rather than the fuel supply.  We need to consider carefully the ultimate agendas of these potential allies. 

Some of the same folks who don’t want to see corn become fuel stocks really don’t want to see it fed to livestock either.  Two decades from now the same arguments being made today to restrict corn to feed rather than fuel could well be made by current allies who will then be discouraging consumption of animal protein in favor of producing grain solely to feed people.  The claim will be that it takes fewer resources to produce food that comes from plants than food from animals.

We have experienced a historic drought this year, and what should have been a bumper crop is a disappointment at best and a disaster at worst.  I am in no way minimizing the challenges that the livestock industry is facing with higher corn prices and limited supplies.  But I don’t think the answer is in forming short-term alliances that could prove to be ill-advised in the long-term.

Instead, we need to focus on long-range solutions—increasing capacity and boosting yields.  We need to emphasize resiliency in responding to drought through conservation practices and technologies that increase water quality and quantity and build soil health.  Let’s be better prepared for the next drought so it won’t hit us so hard.

Demand for animal protein is strong and will continue to increase as the middle class grows in the developing world.  As incomes rise, more and more people choose to add meat and dairy products to their meals.  American farmers and ranchers are well positioned to help them improve their diets, provided they have the freedom to produce for the marketplace without restriction.

Livestock producers are facing some tough times.  No question.  It is appropriate to have a conversation about finding the highest and best use for our natural resources during a drought or any other time of distress.  But in doing so, we should ask ourselves "do we really want to support restrictions on corn use today when all of us who raise livestock may face the same threat in the future?" 

About the author: Bruce I. Knight, Principal, Strategic Conservation Solutions, was the Under Secretary for Marketing and Regulatory Programs at the U.S. Department of Agriculture (USDA) from 2006 to 2009. From 2002 to 2006, Knight served as Chief of Natural Resources Conservation Service. The South Dakota native worked on Capitol Hill for Senate Majority Leader Bob Dole, Rep. Fred Grandy, Iowa, and Sen. James Abdnor, South Dakota. In addition, Knight served as vice president for public policy for the National Corn Growers Association and also worked for the National Association of Wheat Growers. A third-generation rancher and farmer and lifelong conservationist, Knight operates a diversified grain and cattle operation using no-till and rest rotation grazing systems. 

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