NASHVILLE, Tenn. -- U.S. Agriculture Secretary Mike Johanns assured U.S. cattle producers on Friday that the government will work hard to encourage other ways of making ethanol to give them relief from high corn prices.
The price of corn, an important cattle feed, have sped higher as more of the grain goes to making the biofuel ethanol.
"That is why the Farm Bill proposes a very strong federal commitment to accelerating our research into cost-effective ways of producing cellulosic ethanol from biomass," Johanns said during his address at the convention here of the National Cattlemen's Beef Association, the largest U.S. cattle group.
The ethanol production process can use grasses, woody plants, and wood waste, he said.
Story Continues Below
The proposed 2007 Farm Bill released last week recommends $1.6 billion in new funding over the next 10 years targeted at the development of cellulosic ethanol. It also proposes $2.1 billion in guaranteed loans for cellulosic projects and construction of plants in rural areas.
"This constitutes a strong commitment to nailing down the knowledge and building the infrastructure we must have to meet a much larger share of our energy needs," said Johanns.
A $500 million portion of that $1.6 billion will be used for grants to develop new energy sources, possibly methane gas from livestock waste, he said.
"All of that could be a part of this initiative," he said.
In a press conference following his speech, Johanns said he supported exploring the use of sugar cane and sugar beets to make ethanol.
SOUTH KOREA "FRUSTRATING"
Reopening export markets for U.S. beef has been a priority for the NCBA. Overseas markets closed in December 2003 after the United States reported its first case of mad cow disease.
Many markets have reopened, with some restricting the type of beef they will accept. South Korea, once the third largest overseas buyer of U.S. beef, is one that remains closed.
Last year, South Korea lifted its ban on U.S. beef, but tight restrictions on bone chips and other material has prevented imports from reaching consumers. The United States has been in talks to restart beef sales to South Korea, and more talks are scheduled next week.
"The situation in Korea has been frustrating. I'm not giving up. Our beef is safe and should be in Korea," said Johanns.
The beef issue has been a major barrier in establishing a bilateral trade deal between the two countries.
© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
Editor's note:
FIR predicts oil prices could fall to $40 a barrel in the next 12 months. Get a free copy of "Four Ways to Profit from the Oil Bust of 2007" and prepare yourself today.
The 99 stocks you need to dump in 2007 . . . and the 10 to buy! Get our free report today.
Get George Soros` top stock picks for 2007.
