US pork producers seek end to ethanol incentives

By Jerry Bieszk

CHICAGO, March 9 (Reuters) - Struggling U.S. pork producers want Congress to reduce the 45-cent per gallon tax credit to ethanol blenders over the next five years to help reduce the cost they pay for corn to feed their hogs.

A resolution adopted over the weekend at the annual Pork Forum in Texas also called for a 10 percent cap on the U.S. Renewable Fuels Standard. An ethanol trade group has asked the government to boost the rate of ethanol blended into gasoline to as high as 15 percent.

"We're not opposed to ethanol. We're not even opposed to corn based ethanol, but we are opposed to competing in the market with one arm tied behind our back, competing in a world where the use of ethanol is mandated and corn-based ethanol is subsidized," newly elected National Pork Producer Council president Don Butler told reporters at the conference.

He said pork producers are "still hemorrhaging, but we do see some reason for things being better before the end of 2009."

Pork producers last year watched corn prices rise to a record high $7.65 per bushel in June. They have since tumbled 53 percent.

Pork and other livestock producers have blamed the mandated use of corn to produce ethanol for rising feed prices.

"Pork prices have not been bad, but the cost of everything it takes to produce pork has gone up. The priorities ahead of us this year, first and foremost, is doing everything we can to get the industry back on a profitable trajectory," Butler said.

Butler said reductions in the number of hogs produced worldwide will benefit the U.S. producer who has only cut about 2 percent from a year ago. He noted that producers of other types of meat and protein sources cutting back as well, which should create opportunities for pork producers.

"If you look at the global picture on supply and demand of protein, we believe pork is well positioned. We also know that the global demand for protein is on the increase," he added. (Reporting by Jerry Bieszk; Editing by David Gregorio)