ARLINGTON, VIRGINIA, U.S. — Philip Greene, vice-president of Foster Commodities, Foster Poultry Farms, testified on behalf of the American Feed Industry Association (AFIA) to a U.S. House Committee on Agriculture’s subcommittee hearing on livestock, dairy and poultry on Sept. 14.
Greene, who has been with Foster Farms for more than 30 years, reminded the subcommittee, “Anything affecting the cost of producing feed for livestock and poultry, directly impacts the cost of animals to the processor, the cost of meat, milk and eggs to the retailer, and ultimately, the cost of food to the consumer.”
Greene, a former AFIA board member, identified the factors negatively impacting the availability and cost of feed as:
- A federal bioenergy policy continuing to mandate food crops be used as feedstocks for biofuels at annually increasing levels;
- Arbitrary and outdated acreage reduction programs that must be reinvented to meet their original purpose, namely to protect environmentally fragile lands, while maximizing U.S. feedstuffs production and minimize supply impacts on feed-deficit areas of the country, and
- The need for the federal government to ensure commodity futures markets are regulated in such a way as to ensure the traditional ability of true hedgers to identify prices absent institutional speculation distortion.
These factors impact not only the U.S. feed industry, but the global market as well. Therefore, the feed industry urges Congress to make policy decisions that will allow U.S. farmers and ranchers to remain competitive and improve economic health.
Livestock and poultry companies across the industry are feeling ethanol’s effect on corn crops, and fear the increasing digression of corn from agriculture to energy will have detrimental effects on the industry. In order to avoid this, agricultural commodity markets must be returned to operations driven by market demand and modifying energy policy, removing food commodity mandates from use in bioenergy development.
In addition, government must ensure that acreage-idling programs do not remove much-need non-environmentally sensitive arable acres out of production, while allowing idled acres to be planted without an economic penalty to the producer.
Finally, the Commodities Futures Trading Commission must ensure the Dodd-Frank Act meets its objectives by defining and enforcing federal speculative position limits on agricultural commodities futures markets, including derivatives and over-the-counter products, but also protecting bona fide hedgers from speculation.
Rising production costs ultimately leads to a decline in domestic sales and export markets. The cost of food for consumers is estimated to inflate up to 6 percent over the next several years. With the challenge lying ahead of feeding nine billion people by 2050, it is imperative policy decisions support the U.S. feed industry.