Articles in this document:

· Brazil weights ethanol case

· The corn conundrum: Which should come first, the chicken or the Chevy?

· AMI, Ag Groups, Send Letter in Support of Imported Ethanol Parity Act

Brazil weights ethanol case

KTIC 840 Rural Radio - Nebraska

July 30, 2008

GENEVA (AP) _ Brazil is likely to ask the World Trade

Organization to open a blockbuster case into U.S. ethanol tariffs,

a senior official said Wednesday, outlining the first possible

dispute to arise as a result of this week's global trade talks

collapse.

Roberto Azevedo, Brazil's WTO ambassador, said there was a

``strong possibility'' that the Latin American country would make a

formal complaint in September. Brazil would then be able to ask for

the establishment of a WTO panel if a two-month consultation period

with the United States fails to produce an agreement.

The case would concern a U.S. ethanol tariff of 54 cents per

gallon, which critics say is designed to protect American corn

farmers who cannot produce the fuel as cheaply as sugarcane growers

in Brazil.

The U.S. considers ethanol the only U.S. product outside the

scope of WTO rules, but Brazil would challenge this designation so

that tariff cuts on the fuel would have to be a part of any future

global trade pact.

Such an accord is unlikely in the short run after talks among

the world's top commercial powers collapsed Tuesday, as a debate

over farm import rules caused an unbridgeable divide between the

United States and developing nations led by China and India.

Brazil's move against the U.S. on ethanol may be one consequence of

the talks' collapse, as it appeared Brazil would win help on its

ethanol concerns in return for supporting a global deal.

Brazil, another emerging power, split with those allies and

Mercosur trading partner Argentina by accepting a package laid out

by WTO chief Pascal Lamy. In exchange, it sought massive new

opportunities for its ethanol exporters from the U.S. and European

Union, noting that petroleum products, such as gasoline, face no

taxes.

Marcos Jank, head of Brazil's sugarcane industry association,

said Monday he was pleased with the EU for offering to exempt some

1.7 billion liters (450 million gallons) of Brazilian ethanol from

higher tariffs as part of an overall trade deal.

He said the total volume _ around the level of current Brazilian

ethanol exports to the 27-nation EU _ was insufficient, but added

that it was important Brussels was negotiating on the basis that

ethanol use would rise dramatically in the coming years.

Brazil would make billions of dollars (euros) from lower taxes

on ethanol imports, but has struggled getting its fuel accepted as

a cheap, eco-friendly alternative to fossil fuels.

Any hope of an agreement on ethanol fell apart when WTO powers

broke off negotiations Tuesday. There is speculation that a rash of

new trade disputes could now follow, with U.S. subsidy programs for

corn, rice, sugar and other farm commodities vulnerable.

The United States is the world's biggest ethanol producer, and

U.S. President George W. Bush has made the fuel a central part of

his plan to cut gasoline use by 20 percent by 2017. Brazil is

second, but the largest exporter.

European governments have made similar targets to boost biofuel

production, and Brazilian President Luiz Inacio Lula da Silva

toured a number of EU countries last year to lobby for lower

ethanol taxes.

kticam.com

The corn conundrum: Which should come first, the chicken or the Chevy?

by Barbara Murray, July 30th, 2008, 6:00 am

Bizmology

Native North Americans believed in the Corn Mother (the first woman to bear offspring, a kind of Eve). After the white man took over and tamed North America, corn became the Midwest’s gift to the country and the world – year after year of bounteous corn crops grown on rich farmland fed us and almost everyone else.

Now corn is a high-priced double whammy. At least it appears that way to the average American consumer progressing through an average weekend.

First, on the average American’s to-do list for the weekend: gas up the car. We all know the story on that. Suffice it to say the price of gas is out of sight. (Hummers, and even your run-of-the-mill SUVs are the dinosaurs of the auto industry — big galoots doomed to extinction but that’s another blog.)

Then on to filling the fridge for the week. A fryer from the supermarket, a gallon of milk from the convenience store – it doesn’t matter where you go. It’s costing more. And if our average American decides to see a movie – alas, even the popcorn at the theatre, never a bargain in the best of times, costs more.

What does corn have to do with all this? Lots. You see, in December 2007 the federal government passed an energy bill mandating that ever larger amounts of ethanol be used to run our vehicles. The bill was passed with seemingly good intentions (if not outcome). It was meant to reduce the US’s dependence on foreign oil and to help curb global warming.

But our lawmakers forgot to take into account that the product of choice for making ethanol in the US is corn, as in an ingredient that food manufacturers large and small turn into Aunt Jemima Syrup, Froot Loops, Fritos and hundreds, if not thousands, of other products. (There are other options for ethanol production. Brazil, for instance, makes it from sugar cane, probably no better a choice, as it is a food crop as well. But ethanol can be made from agricultural byproducts such as corncobs, straw and sawdust. Kraft and General Mills don’t use much of those in their plants, at least I hope not.)

Corn farmers supported the bill of course, but hey, here was a chance to make some extra income. The law awarded farmers money for every bushel of corn that was used for ethanol production. Ethanol manufacturers (everyone from agricultural giant, Archer Daniels Midland – the #1 ethanol producer in the world — to small newly formed companies created to take advantage of the government’s largesse) became preferred corn farmers’ customers, at the expense of long-time corn users/customers such as dairy and poultry farmers, beef ranchers who use corn for animal feed, and food and food-ingredient manufacturers who use corn for people feed.

(Big oil companies like Exxon are trying to fight back the ethanol scourge, no matter what it’s made from, but they seem to have lost their influence in this debate.)

The double whammy (a whammy we’ve smacked our own selves over the head with) is this: We use corn to make foods we eat, we use corn to fill the fuel tanks of our cars and trucks. Food vs. fuel.

It’s not nice to try to fool Mother Corn. She’s known for millennia what corn is for. It’s for sustenance. It’s for eating. It is her gift to us, a gift of food — for human, not transportation, systems.

bizmology.com

AMI, Ag Groups, Send Letter in Support of Imported Ethanol Parity Act

TheCattleSite News Desk

July 31, 2008

US - The American Meat Institute, joined by a number of dairy, livestock and poultry groups, has sent a letter in support of the Imported Ethanol Parity Act (S 3080), introduced by California Senator Dianne Feinstein.

The legislation, if passed, would reduce a trade barrier on clean and climate-friendly ethanol imports that could save American consumers money on a product that is mandated and at a time of record high gas prices.

"By reducing or eliminating the tax on imported ethanol, this legislation could ease the economic strain that is heavily impacting the agriculture, food and beverage industries," the letter notes.

"At a time when animal agriculture is facing pressures on many fronts, this slight modification could produce positive relief on record high corn prices."

The letter added that this measure paves the way to introduce ethanol produced from highly productive non-feedgrain inputs, thereby easing domestic feed and food price inflation concerns.

Internationally produced ethanol is often derived from sugar cane, which can produce more than twice as much ethanol than domestic sources from the same acre of land.

"While our industry would like to see the elimination of the ethanol tariff altogether, this legislation is a crucial step in the right direction," the letter concludes.

To view this letter in its entirety, click here: http://www.meatami.com/ht/a/GetDocumentAction/i/40629

thecattlesite.com