NCBA commends efforts to end 30-year-old ethanol subsidies

The National Cattlemen’s Beef Association (NCBA) supports the nation’s commitment to reduce dependence on foreign energy. However, according to Bill Donald, NCBA president and Montana cattleman, it is time for the mature corn-based ethanol industry to compete on a market-based, level playing field with all other end-users of corn. He added that there are multiple proposals in the 112th Congress to end the 45-cent per gallon blending credit for corn-based ethanol.

“American taxpayers have spent more than $30 billion subsidizing corn-based ethanol for more than 30-years.That industry should be able to operate on the open market like the rest of us do,” Donald said. “As a cattle producer, all I’m asking is to compete head-to-head on a level playing field for a bushel of corn.”

U.S. Senator Tom Coburn (R-Okla.) has introduced S. 520, legislation to repeal the Volumetric Ethanol Excise Tax Credit (VEETC), and has offered the legislation as an amendment to pending legislation in Senate. In the House of Representatives, Congressman Steve Womack (R-Ark.) has introduced similar legislation to repeal the VEETC.

Kristina Butts, NCBA executive director of legislative affairs, said the VEETC has had a negative economic impact on cattle producers by driving up the cost of feed. According to a 2008 U.S. Department of Agriculture (USDA) Economic Research Service report, feed costs for livestock, poultry and dairy reached a record high of $45.2 billion – an increase of more than $7 billion over 2007 costs.

“Cattle producers across the country are already feeling the effects of high corn prices. From December 2007 to February 2010, the cattle feeding sector of the beef industry lost a record $7 billion in equity due to high feed costs and economic factors that have negatively affected beef demand,” Butts said. “Between 2005 and 2008, corn prices quadrupled to more than $8 per bushel and are around $6.60 per bushel today. We are encouraged that members of Congress continue pushing commonsense solutions to end corn-based ethanol subsidies; to level the playing field for all end-users of corn; and to save taxpayers $6 billion each year.”

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