Cattle Group Struggles with Biofuels Issues

National Cattlemen's Beef Association members make policy during annual meeting in Nashville.

Six months ago cattle producers were more focused on feeder prices and preparing for winter. Today they're worried about rapidly rising corn markets and Washington policies that could significantly impact their businesses.

"This issue came up pretty fast," says Gregg Doud, economist, National Cattlemen's Beef Association. "But this is a dynamic group and they're working really hard on this issue while they're here."

Doud was part of an industry forum this week that explored the biofuels issue, but his first comment to the group: "Folks we could discuss the NCBA policy on biofuels, but we don't have one. That's for you to write and whatever you come up with your staff will implement."

Producers are talking in the halls, meeting in sessions and pounding out policy language that the membership can approve to set a course into the future. President Bush's comments during the State of the Union Address calling on a replacement of 20% of gasoline with biofuels topped off a rising tide of interest in ethanol and biodiesel that's been growing through the winter.

While corn-based ethanol is the immediate worry as feed prices continue to rise, the policy questions run deeper than that. "There's one word I hear in the discussions I've listened to," says Doud. "That's 'equitable.' Producers want a policy that is fair."

He notes that NCBA has a wide percentage of members are both grain farmers and cattle producers and they're well aware of the issues ahead. Beyond corn-based ethanol, there are opportunities for the beef industry too - fat-based biodiesel, or animal-waste-based biodiesel. However, current tax laws are structured to benefit mainly fat-based biodiesel, not product from animal wastes.

Doud notes this isn't an issue a lot of members knew about before, "but part of the process of this meeting is education and those are attending this convention are now aware of this issue as well." That "equitable" effort would have to include policy concerning tax incentives for biofuels that aren't targeted on a single industry segment.

The bio-fuels forum this week, explored a range of topics, offering members a chance to be better informed before they make policy. Now the sleeves are rolled up and the work has begun.

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