Trimming the Fat

Iowa pork producers weigh in
By Kris Bevill | March 10, 2011

Virtually every industry that participates in the corn market has a stake in the future of corn ethanol support, but contrary to what some industry groups would have the public believe, not all are unequivocally opposed to continuing federal ethanol subsidies.

Members of the Iowa Pork Producers Association recently passed a resolution that resembles proposals being put forth by the ethanol industry. The group is unsurprisingly supportive of allowing both the blenders credit and import tariff to expire at the end of this year, but it also supports shifting those subsidy dollars to the build-out of ethanol infrastructure.

Greg Lear operates a swine farm in northwest Iowa and is currently serving as vice president of operations for the IPPA. He says the consensus among IPPA members is that they support ethanol but believe current subsidies are driving up corn prices to levels that would not have to be endured otherwise. He’s currently paying about $60 for corn to raise each 280-pound pig, he says. Ten years ago, his corn costs were about one-third that price. Diverting ethanol subsidies toward infrastructure could help level the playing field for corn while continuing to support three of Iowa’s top industries—corn, ethanol and pigs, he says.

“It’s getting to the point where [ethanol] is not a struggling industry anymore,” Lear says. “If they’re going to have those monies gathered, use them in something that will be helpful instead of a hindrance.” Of the two ethanol subsidies set to expire this year, Lear believes eliminating the import tariff could have the greater impact on corn prices by opening up the possibility for non-grain-based ethanol to take up more of ethanol’s market share. 

—Kris Bevill