GMOs and the high price of feed
1.Opinions differ on causal link between strict GMO authorisation policy and high price of feed
2.Higher feed costs contributed to loss at Tysons
3.Is corn overplanting responsible for soaring food costs?
4.Livestock producers want legislators to repeal ethanol law
According to GM promoters, livestock farmers in the EU are suffering high prices for livestock feed because of the EU's slow rate of GMO approvals (item 1).
Curious then that US livestock famers are also suffering the same price problems, including livestock farmers in Monsanto's home state of Missouri.
The latter are complaining that a 10% ethanol target is triggering a "livestock industry meltdown" by leading to higher feed prices (item 4).
And they're not just having problems in Missouri, Tyson's Foods - the huge US broiler conglomerate - has just announced a loss that's being blamed in part on high feed prices (item 2), while the USDA estimates that corn feed price increases added nearly 9 percent to the price of US beef last year (item 3).
All of which shows, as Caroline Lucas notes below, that the attempt to establish a link between the rise in feed and EU rules on GMOs is "completely false and disingenuous". (item 1)
EXTRACTS: A newly implemented ethanol mandate coupled with rising livestock feed prices is dividing Missouri's farmers. It pits corn farmers, who are getting record prices for their grain, against livestock producers, who are struggling to feed their herds. (item 4)
Corn-dependent livestock also are increasing in price. The USDA estimates that corn feed price increases added nearly 9 percent to the price of beef last year. But this doesn't include the indirect costs. U.S. beef cattle herds declined by 338,000 in 2007, increasing beef prices further, in part, due to higher prices for feed, according to the American Farm Bureau Federation. (item 3)
Tyson, like other livestock producers, has been hurt by the high price of corn and soybean meal. Corn prices have skyrocketed due to strong demand for exports, ethanol production and as a livestock feed. (item 2)
"...this rise concerns all countries including those that have very flexible legislation on GMOs such as the United States" (item 1)
1.(EU) EP/AGRICULTURE: Opinions differ on causal link between strict GMO authorisation policy and high price of feed
Brussels, 25/04/2008 (Agence Europe) - On Wednesday 23 April in Strasbourg, the European Parliament was divided over the link of cause and effect between the EU's strict policy for authorising genetically modified organisms (GMOs) and the difficulties currently encountered by farmers raising cattle, pigs and poultry for obtaining animal feed.
Speaking on behalf of the committee on agriculture and rural development, British Conservative Struan Stevenson (who replaced the committee chairman, Neil Parish, at the beginning of the oral question) stressed that pig and poultry farmers are not subsidised by EU farm aid and that it is therefore necessary to ensure they have access to competitive feed around the world at competitive prices. In Europe, "we take over two years on average to license a perfectly safe GM product", he bemoaned, citing the example of Herculex maize for which it took 33 months to conclude Community marketing procedure compared to 15 in the United States. "There is no excuse for this. With food prices and costs for the poultry and pig industry both rising, we cannot afford this time delay in licensing feed. We have to speed things up", he said.
Mr Stevenson denounced the EU's "zero tolerance" policy on the chance presence of GMOs which has resulted in "dramatically reducing the amount of non-GM feed coming into the EU". He took the example of a cargo of non-GMO soya loaded onto a vessel in Brazil to be transported to the EU. There is the risk that a tiny trace of transgenic soya contaminates the crates of GMO-free soya at the time of loading in the port in Brazil. Once the vessel arrives at the EU port, although this tiny trace of GMO soya is in the soya cargo that is not supposed to contain GMOs, the whole cargo is sent back to Brazil, Mr Stevenson explains.
Unlike Esther De Lange of the Netherlands, who spoke on behalf of the EPP Group, Bernadette Bourzai (PES, France) challenged the link of cause and effect established between the zero tolerance principle on GMOS and the considerable rise in the price of foodstuffs.
Speaking on behalf of the PES, she said this considerable rise in foodstuff prices is due to several factors combined: a fall in supply due to extreme climatic incidents and the development of biofuels, a rise in demand from emerging countries, and, above all, the unprecedented development of stock exchange speculation on farm markets. "Furthermore, this rise concerns all countries including those that have very flexible legislation on GMOs such as the United States", she commented. It is, however, true that European farmers are experiencing "great difficulty" due to the EU's "great dependence" on massive imports of animal feed. In order to reduce this dependence, Ms Bourzai suggests two roads of action: 1) "do everything" to safeguard the last European crops of dried fodder and high protein crops; 2) reflect on ways to diversify supply sources. There is a supply of non-GMO feed in third countries. "I would finally like to point out that most European citizens are asking for the right to procure food products free of GMOs", she concluded, requesting modification of the labeling rules for meat from animals fed with GMO feed in order to respect consumers' rights.
Caroline Lucas, of Britain, said on behalf of the Greens/EFA Group, that the attempt to establish a link between the rise in feed and EU rules on GMOs is "completely false and disingenuous". She sought to give reassurance by referring to a report from DG Agriculture which, according to the worst scenario, provides for Brazil to rapidly market a variety of transgenic soya which is not approved in the EU. There is no proof that Brazil is contemplating doing this, however. Jean-Pierre Audy (EPP-ED, France) pointed out that the EU is greatly dependent on imports of protein-rich feed. He also said that the quality of our customs system has deteriorated greatly.
The Commission acknowledges that asynchronous approvals of GMOS can represent a problem for the availability and cost of feed imports, said Androulla Vassiliou, European Health Commissioner. The Commission's efforts are targeted at addressing some of the key factors behind this issue, both at internal level, through the authorisation of new GMOs in the full respect of the EU legislative framework, and at international level, through discussions with major trading partners.
The Commission recalled that it had recently adopted the authorisation of GA21 maize, which will facilitate imports with the advantageous presence of this GM even from Argentina. Also, the Commission is to suggest that the Council accept a genetically modified soya that should open the way to further imports of cattle feed.
Would the Commission be prepared to move from zero tolerance to something higher? The Commissioner reminded MEPs who put this question that we need the support of member states in order to change matters. Experience has shown, in various committees, that member states only rarely reach qualified majority on this. Furthermore, the Commission is discussing with the European Food Safety Authority on the possibility of finding "efficiency gains"? in the GMO authorisation procedure. Ms Vassiliou concluded that the approval process could be significantly shortened if the Commission had greater support from member states in the comitology process for the authorisation of GMOS.
2.Higher feed costs contributed to loss at Tysons
Reuters, April 28 2008 [shortened]
Chicago: Tyson Foods, the largest U.S. meat company, on Monday posted a small loss for its fiscal second quarter due to higher feed costs and charges related in part to plant closings.
Tyson, like other livestock producers, has been hurt by the high price of corn and soybean meal. Corn prices have skyrocketed due to strong demand for exports, ethanol production and as a livestock feed.
"For the year, corn and soybean meal increases are likely to approach $600 million," Richard Bond, Tyson president and chief executive, said in a statement.
3.Is corn overplanting responsible for soaring food costs?
By David A. Ridenour
Athens Banner Herald, April 27 2008
WASHINGTON - Move over "Bridge to Nowhere," there's a new poster child of congressional waste and avarice - ethanol, the "Fuel to Nowhere." Ethanol leads only to higher food prices and greater greenhouse gas emissions.
Anytime Congress can find an excuse for shoveling out billions of dollars in pork, it's a safe bet there'll be a stampede of Democrats and Republicans to vote "Aye." Such has been the case with ethanol ever since Congress latched onto the idea that it could be sold as a means of cutting greenhouse gas emissions.
Congress already has authorized billions in taxpayer-funded subsidies for farmers who grow corn and the producers who turn it into the fuel that's pumped into your car.
Nevermind that ethanol is helping spike food prices. Corn prices already have increased by 70 percent since 2005, and the U.S. Department of Agriculture projects they will rise an additional 10 percent to 20 percent this year.
But that's not the half of it. Corn-dependent livestock also are increasing in price. The USDA estimates that corn feed price increases added nearly 9 percent to the price of beef last year. But this doesn't include the indirect costs. U.S. beef cattle herds declined by 338,000 in 2007, increasing beef prices further, in part, due to higher prices for feed, according to the American Farm Bureau Federation.
Ethanol advocates claim that rising corn costs have contributed only modestly to the overall increase in food prices. They're not being entirely honest, as they're only counting the direct costs of ethanol. They don't count, for example, increases in soybean prices resulting from farmers switching to the more lucrative corn crop. Soybean crops dropped by 11 million acres last year - much of it used to produce corn.
The corn growers and Big Agriculture, flush with new-found cash, have generously increased their campaign contributions, making everyone happy - everyone, that is, but consumers and taxpayers.
4.ANALYSIS: Livestock producers want legislators to repeal ethanol law
By Chris Blank
The Associated Press, April 27 2008
JEFFERSON CITY - A newly implemented ethanol mandate coupled with rising livestock feed prices is dividing Missouri’s farmers.
It pits corn farmers, who are getting record prices for their grain, against livestock producers, who are struggling to feed their herds.
At the center has been a law that, starting this year, requires most Missouri gasoline to be blended with 10 percent ethanol if the biofuel is cheaper than regular gas.
Corn farmers defend the four-month old mandate as "one of the greatest Missouri economic development bills.” But livestock producers - many of whom voted for it two years ago ”” argue it's contributing to a "livestock industry meltdown" by leading to higher feed prices. And they’re lining up to get it repealed.
Rep. Mike Dethrow, a hog marketer from rural southern Missouri who has filed legislation to lift the ethanol mandate, said knowing what he does today about where corn prices have gone, he would not have supported the bill requiring ethanol two years ago.
"It is a piece of the puzzle," said Dethrow, R-Alton. "The solution is probably the free market. The solution is probably not more government."
But corn farmers say misperception, foreign demand and a less valuable American currency spurring more grain exports are each much bigger factors than ethanol in the livestock feed prices puzzle.
"There are a lot of factors out there that are affecting this thing," said Gary Clark, the senior director of market development for the Missouri Corn Growers Association. "There is just not that magic bullet that is all of a sudden going to take livestock prices up and grain and corn prices down."
Clark said livestock producers see their feed costs rising, read about the state's ethanol mandate and assume that one led to another because that's the most obvious difference. But he argues it's the less visible market factors that are actually driving prices. Plus, ethanol plants offset some of the corn they use by producing distiller’s grains that can be used to feed livestock.
The ethanol split has been a particularly public divide in a farming community that frequently aligns together in the Capitol to form a potent force, often able to offset the power of the more numerous suburban and urban lawmakers.
Even so, Missouri's agricultural interests sometimes have been a divided monolith. In recent years, there have been breaks over whether cities and counties should be allowed to regulate concentrated animal feeding operations and genetically modified crops.
But schisms have generally separated large and small farming operations and not crops versus animals. The break over ethanol comes as some lawmakers want the state to create a similar mandate to require a biodiesel fuel blend.
Rep. Steve Hobbs, an ethanol backer and corn grower from mid-Missouri, likened Missouri’s farmers to neighbors: They want to help each other, but there is also a sense that people have to look out for themselves.
"There's always been a delicate balance between grain farmers and livestock producers,” said Hobbs, R-Mexico.
Some livestock producers are convinced the state has sided with grain farmers by passing a law that creates a guaranteed market for corn whenever ethanol is cheaper than gas. That's upset the equilibrium in a relationship where the participants want corn prices moving in opposite directions.
"That's the rub, that we came in and helped one segment of ag, but we didn't help the rest," said Rep. Tom Loehner, who has cattle and sheep but also grows some corn and beans on his farm in Osage County south of the Missouri River.
Even if divided, grain growers and meat producers have so far remained civil.
Missouri's corn commodity group is working with beef producers to find ways to use ethanol byproducts to feed animals and to better explain why they think livestock feed prices are increasing. During a hearing on the bill to repeal the ethanol mandate, livestock producers frequently caged their criticisms of it with the disclaimer that "I like corn farmers."
"These guys, the corn growers, had some tough times," said Loehner, R-Koeltztown. "They're saying, 'OK we're making a few dollars, and we don't want to give that up.' And we don't begrudge you, we just need to get our own prices."
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