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April 28, 2008

US: Meat industry cheers Texas biofuel call

The US state of Texas has asked Washington to be allowed to slash the amount of corn used for biofuel production – a move that has won support from sections of the meat industry.

The US state of Texas has asked Washington to be allowed to slash the amount of corn used for biofuel production – a move that has won support from sections of the meat industry.

Governor Rick Perry, wary of rising food costs for Texans, wants the state to cut in half the corn it diverts to ethanol production.

Washington’s biofuel policy has been widely criticised for helping push up commodity costs for food manufacturers and shopping bills for US consumers. Last year, a quarter of all corn produced in the US was used for biofuels.

Poultry giant Pilgrim’s Pride has been a vocal critic with president and CEO Clint Rivers slamming an “ill-advised policy” for driving up corn costs and leading to the company to close a chicken processing complex and six of its 13 distribution centres.

Governor Perry has approached the US Environment Protection Agency to ask for a 50% waiver for Texas from the federal renewable fuel standard (RFS) mandate for ethanol produced from grain.

“We appreciate the good intentions behind the push for renewable fuels. In fact we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill,” Governor Perry said. “There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done.”

Tyson Foods president and CEO Richard Bond “applauded” the move. “Something has to be done to address corn-based ethanol’s detrimental impact on food prices and this is a good first step,” Bond said.

Bond, however, also called on the US Congress to “do the right thing” and remove tariffs on imports of sugar-based ethanol.

The National Chicken Council, meanwhile, said the Texan Governor is “absolutely correct” in calling for a waiver from fuel mandate.

“It is time for Washington to pay attention to what is going on and grant some relief from the unrealistic demands of the ethanol program,” said National Chicken Council president George Watts.

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