Meat, grocer associations going all-out on ethanol subsidy, tariff

In Washington, meat producers are mounting a full-court press to eliminate the ethanol tariff and ethanol subsidies, to reduce pressure on corn prices that affect chick production costs. The industry, however, is being careful to separate the issue of chicken farming credits and subsidies from other farm subsidies. The industry continues to strongly support poultry farmer and cattle subsidies and supports. Grocers’ associations are coordinating efforts with meat producers.

A change in Chinese meat consumption habits since 1995 is diverting
eight billion bushels of grain per year to livestock feed and could
empty global grain stocks by September 2010, according to a new study
from Biofuels Digest, now available for download here in an expanded version.

The Study, “Meat vs Fuel: Grain use in the U.S. and China,
1995-2008” concluded that, even if the U.S. ethanol industry were shut
down tomorrow, rising Chinese demand for meat, and the ensuing
livestock feed demand, will empty global grain stocks as soon as 2013.
The report offers gloomy news for policymakers who have hoped to
address global food vs. fuel concerns by restraining U.S. ethanol
demand.

The study found that the US produced 349 million tones of corn last
year, up from 192 million tones in 1995, but the 157 million tonne
increase has not kept pace with rising demand. The US ethanol industry,
which has been criticized as the primary cause of grain shortages and
rising prices, increased its grain usage by 31 million tonnes during
the 12 year period. By contrast, livestock grain demand to supply
Chinese meat consumption increased by 199 million tonnes.

The study resolves several questions that had been unanswered in the
fuel vs. fuel debate by focusing on rising demand from China as well as
the U.S. The report identified that rice, rather than corn or wheat,
suffered the largest price increases over the 12-year period, despite
the fact that rice is not used for biofuel production. The study also
ties falling global grain stocks to corresponding increases in Chinese
consumption.

The study determined that China’s meat consumption since 1995 has
increased by 112 percent per person to 53 kilograms of meat, per person
per year.

The study tracks the meteoric growth in Chinese meat consumption
since 1983, a trend spotted early by Worldwatch Institute founder
Lester Brown in his prescient 1994 article “Who Will Feed China?”. In
1995, Chinese meat consumption was 25 kilograms per person, and
reaching 31 kilograms by 1999, 50 kilograms by 2000, and is 53
kilograms per person today.