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NEBRASKA CATTLEMEN URGES SENATORS HAGEL AND NELSON TO LET THE MARKETPLACE SET ETHANOL NEEDS

(June 14, 2007) LINCOLN, NE – Nebraska Cattlemen is urging Senators Chuck Hagel and Ben Nelson to let the marketplace determine input needs for ethanol production. “Because current government-set ethanol production levels are being met, there is no need to mandate higher production levels or pay increased incentives,” said Nebraska Cattlemen President Jay Wolf, a rancher, cattle feeder and farmer from Albion.

NC recognizes and supports the fact that ethanol reduces America's dependence on foreign energy. In addition, cattle producers appreciate that ethanol production has provided rural economic growth with new jobs and a broadened tax base.

“We support these important factors and corn producers who are enjoying profits, which is good for Nebraska's economy,” Wolf said. “We are also saying that implications of increasing ethanol production with a drastically higher mandatory federal renewable fuels standard should not be overlooked. Our primary concern is not about $4 corn, it is about unintended consequences of government policy manipulating the marketplace.”

Because current government-set ethanol production levels are being met, Nebraska Cattlemen wants Congress and all involved parties to take more time to look at factors such as the current transportation infrastructure. For example, movement of projected corn, ethanol and distillers grain production would increase rail demand 68% by 2015. In addition, a new report from a Washington think tank projects the government's cost of ethanol production between 2007 and 2022 will be $228 billion, which would be twice the cost of an equivalent amount of imported oil. Third, cattle producers want a level playing field when competing for corn, but the blender's tax credit and import tariffs combined with a proposed increased mandatory ethanol production does not provide a level playing field, Wolf said.

He added, proposed mandatory production would require record corn crops each year but current proposals do not address what would happen when a short crop is produced.

The marketplace is most efficient, when supply and demand signals are clearly communicated. However, when the government manipulates the corn marketplace with artificial demand and unfair subsidies, then America's food producers will be placed in business threatening positions, Wolf said.

“Cattlemen and others raising these questions do support ethanol production and reduced foreign oil dependence,” Wolf said. “We also believe renewable fuels needs to be market-driven and we are saying there's no need to stomp on the accelerator now. Public officials and the business community need to slow down to study the implications of increased ethanol production. The current mandatory renewable fuels standard is valid until 2012, so there is time to carefully develop sound policy,” Wolf said.

The Nebraska Cattlemen association serves as the spokesman for the state's beef cattle industry and represents professional cattle breeders, ranchers and feeders, as well as 48 county and local cattlemen's associations. Its headquarters are in Lincoln and second office in Alliance serves cattlemen in western Nebraska.

This and other Nebraska Cattlemen information is available at www.nebraskacattlemen.org.

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