By Dan Murphy, food-industry journalist and commentator for Vance Publishing

It's election time, and not only are the major political parties fighting it out with dueling ad campaigns, both sides in the ethanol debate are aggressively pushing their competing agendas.


On one side are the leaders of the major meat and poultry trade groups, who represent the cattle feeders, hog farmers and poultry growers dependent on ample — and affordable — supplies of feed corn and other grains. In opposition are the biofuel proponents, who see ethanol as a way to drive energy independence, create jobs in the renewable fuels industry and mitigate air pollution in urban areas.


Of course, what has stirred this latest round of rebuttals is the recent spike on corn futures, coupled with USDA's downward projections of the domestic harvest. With corn production forecast at about 12.7 billion bushels, 3 percent lower than last season's harvest, projected prices have risen to a projected $4.60 to $5.40 a bushel.


That prompted the leadership of the American Meat Institute, the National Chicken Council, the National Turkey Federation and the Grocery Manufacturers Association earlier this week to demand that ethanol tax credits to be allowed to expire as scheduled at the end of the year. Not surprisingly, those groups oppose loan guarantees for construction of ethanol pipelines, along with new domestic producer tax credits and an extension of ethanol blender credits.


Feed, food or fuel
On the other side, the Renewable Fuels Association characterized the food versus fuel debate a "red herring," stating that lower U.S. corn supplies can be offset by increased grain production overseas. A spokesperson added that ethanol byproducts could substitute for feed corn, buffering the impact of higher feed corn prices.


Ethanol plants do produce a variety of by-products, primarily wet and dried distillers grains with solubles (DDGS). These by-products are typically used in dairy operations, beef cattle feeding and in swine and poultry feeding. However, as National Turkey Federation President Joel Brandenberger pointed out, DDGS can only replace about 10 percent of typical poultry feed rations, since although the product is a good source of protein, it contributes virtually no energy calories.


So who's right? Which way should ag policy be slanted? There are three points to consider in approaching an answer to those questions.


First, ethanol isn't the long-term answer to the challenge of energy independence. But its production is important and useful as a "bridge fuel" during a transition from our current dependence on foreign oil to a future energy mix that incorporates cellulosic ethanol, wind, solar, biomass and localized production of biodiesel, methane and other energy sources.


Plus, ethanol production adds significant value to the ag economy and the rural areas dependent on it and helps mitigate air pollution in urban areas — the original reason many states initially mandated ethanol blends at the pump, lest we forget.


Second, a rise in feed prices, while painful for the meat and poultry industries, cannot be controlled solely by damping down ethanol production. Corn prices are driven by a complex of factors, including global production, weather conditions and consumption trends in the food industry. If ethanol production were shut down tomorrow, there's no guarantee that corn and other feed costs wouldn't spike at some point in the future anyway, and in the end, producers and processors have several risk-management tools with which to hedge feed prices and adjust feed ration components to mitigate margin erosion due to higher feed costs.


Finally, and most importantly, policymakers need to come to grips with the fact that as a nation, we need both: robust ethanol production capacity and ample supplies of feed grains to sustain meat and poultry production.


Both industries are critical to a viable ag sector, and both provide essential job opportunities — entry level and skilled positions — and both industries represent a much-needed investment in the domestic economy, with payrolls and profits that stay right here in the USA.


Supporting both however, requires transformational thinking and even bolder action on the part of the public and private sectors, so the likelihood of such a scenario isn't all that promising.
 
But for such a strategy to come into focus, the process has to start with a clear commitment to both bioenergy and meat and poultry production. Neither industry should gain ground at the expense of the other.


After all, in the larger economy, they're both playing on the same red, white and blue team.