9 September 2006

2 minute read

North America

As the shift to increased biofuel use becomes increasingly evident in both Canada and the United States, western Canadian livestock producers will be looking for help to keep a lid on feed costs. That help could come in the form of a combination of higher cereal grain and oilseed yields through plant breeding, regulatory changes designed to ease the registration of new wheat varieties suited to specific end use requirements and low cost byproducts from biofuel production.

U.S. Energy Bill Encourages Expanded Biofuel Production

“There are some strong government incentives here in the U.S.,” explains Douglas Tiffany, a research fellow in the Department of Applied Economics at the University of Minnesota. “There are some other different types of incentives in Canada.”

He recalls, “In the summer of 2005 the U.S. congress passed, and the president signed, the 2005 energy bill. And that established some targets, essentially mandates, for utilization of biodiesel and ethanol in a pattern up to 2012.”
As well, he points out, “There’s maintenance of a 51 cent per gallon credit for blenders who utilize ethanol. That is still intact and there is a similar credit of one dollar per gallon of biodiesel that is utilized. So those things working together have really opened the flood gates of investment into biofuels in the U.S.”

He notes, “Announcements are being made of investor groups and people are applying for permits in the different states. There is some concern that the plants may be too close to one another. They will be strongly bidding for the feedstock, the corn typically, and that is causing shudders among the livestock producers. They say, wow, how can we compete against all these folks who are after the corn that we thought that we were able to buy cheaply.”

He believes, “It’s going to really put the pressure on certain livestock entities.”

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Source: Farmscape

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