Demand for grain as an ethanol production feedstock costs the livestock industry as much as $130 million annually in higher feed costs, says a George Morris Centre report.
Livestock groups that commissioned the report quickly embraced it this week as proof government support for grain-based ethanol production favours one industry over another.
“This careful assessment of the evidence confirms for pork producers what we have felt all along, the rapid growth of ethanol production in recent years has affected the livestock industry by increasing grain prices,” Canadian Pork Council chair Jean-Guy Vincent said in a CPC statement. “We strongly urge governments, federal and provincial, to take the results of this study into account in considering any further stimulation of ethanol production in this country.”
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The Canadian Renewable Fuels Association and Grain Growers of Ontario quickly denounced the study as filled with errors and pitting one farm sector against another.
The livestock impact of increased grain demand is largely offset by ethanol byproduct distillers’ grain that is used as livestock feed, they argued. And the suggested impact of ethanol industry purchases on market prices in Canada is exaggerated.
At the George Morris Centre, lead analyst Kevin Grier said the evidence is clear that domestic ethanol demand affects Canadian grain prices. He said it was a message to federal and provincial governments that supporting the ethanol industry through subsidies and a guaranteed domestic market hurts another multi-billion dollar industry.
“Looking to the future, it is crucial for the livestock and meat industry that the policies and programs sustaining the ethanol industry be curtailed or eliminated,” said the GMC report.
To date, governments have shown no inclination to abandon or reduce support for the biofuel industry.
The CRFA is lobbying Ottawa to double its mandate of requiring that at least five percent of Canadian gasoline be ethanol.
