Monday, April 11, 2011

He suggested that to stem rising food prices, we should find a way to reduce the distance food travels. He defended ethanol, saying corn prices comprise a tiny fraction of our retail food dollar. Higher energy costs make up a much larger portion, and he noted that food travels an average of 1,500 miles before reaching consumers.

"I'm not a big fan of organic or natural food," he said, but reducing travel distance would reduce costs, he pointed out.

Rastetter was asked how Iowa farmers could increase yields in a sustainable way while protecting water quality. He noted that when he was raising more than a million hogs with Heartland Pork, his company was required to report what it did with manure. Yet grain farmers don't face the same requirements to track fertilizer applications.

"We have to strike the right balance between government regulation and voluntary" efforts, Rastetter noted. "I think we rely too much on voluntary."

Not that Rastetter has become a darling of environmentalists, many of whom oppose his advocacy on behalf of ethanol and biotechnology.

Rastetter said biotech seeds will enable farmers to double production by 2050 to feed an estimated global population of 9 billion people. That food must come from places like east Africa, Russia and Ukraine, which have underused arable land. He spoke of his efforts to persuade officials in Tanzania to embrace genetically modified crops. The east African nation has 25 million acres of farmland that is producing virtually nothing, he said.

"We have enough land, enough technology" to feed the world, he said.

Rastetter was introduced by fellow Republican Steve Roberts, a lawyer with the Davis Brown firm in Des Moines. He said Rastetter has "changed the face of agriculture in Iowa."

The Senate has confirmed his appointment to the Board of Regents, and Roberts posited that Rastetter would be elected chairman. He also predicted that someday, he'll be known as "Governor Rastetter."

Brazil's ethanol producers face high sugar prices

U.S. ethanol producers are having a rocky year, with both corn prices and political criticisms at near-record levels. But they can take small measure of comfort by comparison with their brethren in Brazil.

High prices for sugar cane, the feedstock for Brazil's ethanol, have driven ethanol prices to record levels. Because ethanol is up to 25 percent of the blend in Brazilian gasoline (vs. 10 percent in the U.S.), pump prices are up and consumption is down.

This year, Brazil's ethanol production is expected to be down 26 percent.

The shortfall in Brazilian production has caused Ethanol Producer Magazine in the U.S. to forecast increased import demand from Brazil for U.S. ethanol.

Utilities should back natural gas, author says

As utility executives measure the environmental problems of coal against the scare potential of nuclear, author Daniel Yergin argues in the Wall Street Journal for the viability of natural gas.

Yergin traces the development of shale gas from its origins in Texas a decade ago to unlikely outposts such as Pennsylvania and New York.

He notes that utility executives, burned before by the volatility of natural gas prices, have long preferred the steady supply and price structures of coal and even nuclear to natural gas.

Yergin, who won the Pulitzer Prize with his history of the oil industry, "The Prize," and considered the leading energy commentator in the U.S., argues that the abundance of the new shale gas "changes the game" for utilities who now are likely to take closer looks at natural gas.

The matter would come home for Iowa in two ways. One is the first tentative steps by MidAmerican Energy of Des Moines to clear the way for a nuclear plant to be built by 2020 somewhere in central Iowa. The matter is before the Iowa Legislature now and has attracted the consternation that could be expected after the post-earthquake nuclear disaster in Japan.

Also, Iowa is banking on a big nationwide market for its abundant wind energy. But the presence of cheaper natural gas, particularly in long energy-short Northeastern states, could easily cool such enthusiasm.

Newsham parent links with French company

The parent company of Newsham Genetics of West Des Moines, Groupe Grimaud of France, has entered into an alliance with PEN AR LAN, a French-based international pig genetics company with operations in France, Poland, Brazil and Canada.

Under the terms of the agreement, Groupe Grimaud's pig division, Choice Genetics, becomes the majority shareholder of PEN AR LAN.

Newsham and PEN AR LAN will continue to operate as two independent companies under Choice Genetics, with each company having access to the technological advances of the other.

Newsham develops marker-assisted selection to create high-value maternal and terminal genetic lines for pork producers in North America and worldwide.

Wholesale meat costs up 25 percent over a year ago

Wholesale beef and pork prices continue to run as much as 25 percent higher at the wholesale level from a year ago, according to weekly reports by the U.S. Department of Agriculture.

Live and feeder cattle prices both have hit all-time highs this month under tight supplies and strong export demand. Hog prices rose 9 percent in March as packers scrambled to be ready for the summer grilling season.

Prices for the 50 percent lean pork bellies, from which best cuts of bacon are made, are up 64 percent from a year ago to $1.44 per pound.

Frozen pork bellies averaged $1.18 per pound on the Chicago Board of Trade, up 12 cents per pound in the last month.

The USDA has warned that beef and pork prices, which rose by an overall average of about 6 percent last year, will increase again this year.

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