DES MOINES, Iowa – A recent opinion piece by Larry Pope, chief executive officer of Smithfield Foods, Inc., garnered the attention —and the annoyance — of US Sen. Charles Grassley, a staunch defender of corn growers.
In his opinion piece which ran in the Wall Street Journal, Pope called for cuts to the federal ethanol mandate.
"The RFS has diverted so much corn as a questionable substitute for gasoline that in the face of this drought-depleted harvest, major food-producing companies such as Smithfield are being forced to seek alternative markets for grain to meet the demands of their livestock and at more affordable prices,” Pope wrote. “Ironically, if the ethanol mandate did not exist, even this year's drought-depleted corn crop would have been more than enough to meet the requirements for livestock feed and food production at decent prices."
In response, Sen. Grassley delivered withering criticism of Pope in a speech on the US Senate floor. The senator’s comments were printed in the Des Moines Register as an opinion piece.
“I may start referring to Mr. Pope as Henny Penny from the children’s folk tale, “Chicken Little”, Grassley said. “Every time Smithfield has to pay a little more to America’s corn farmers to feed his hogs, Mr. Pope starts up with the same argument that the sky is falling and it’s all ethanol’s fault.”
Grassley dismissed the claim that ethanol consumes more corn than animal agriculture, saying that one-third of the corn re-enters the market as dried distillers grains.
“I would imagine that millions of hogs raised by Smithfield every year are fed a diet containing this ethanol co-product,” Grassley said. “Mr. Pope appears unaware of its existence. When distillers’ grains are factored in, 43 percent of the corn supply is available for animal feed. Only 28 percent is used for ethanol.”
Grassley went on to say that corn farmers historically have been paid roughly $2 per bushel for corn. Corn farmers were able to stay in business because of government subsidies. Grassley said “producers like Smithfield were able to buy corn below the cost of production and let the federal government subsidize their business by guaranteeing a cheap supply of corn.”
“In the view of corporate livestock producers, subsidies are just fine it they allow them to buy corn below the cost of production,” Grassley said. “Anybody could look like a genius with that business model.”
But as the war of words over ethanol intensifies with one of the worst droughts in US history as a backdrop, the call for a waiver of the ethanol mandate is growing louder. A bipartisan group of 156 members of Congress signed a letter to Environmental Protection Agency Administrator Lisa Jackson calling for such a waiver. This comes just days after a coalition of trade groups representing the meat, poultry and dairy industries, sent a petition to Jackson asking the EPA to issue a waiver or partial waiver on the ethanol mandate for at least one year.