U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

36–240 2007

REVIEW OF THE IMPACT OF FEED COSTS ON 

THE LIVESTOCK INDUSTRY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON LIVESTOCK, DAIRY, AND 

POULTRY 

OF THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

MARCH 8, 2007 

Serial No. 110–04 

( 

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 


bajohnson on PROD1PC69 with HEARING
(II) 

COMMITTEE ON AGRICULTURE 

COLLIN C. PETERSON, Minnesota, Chairman 

TIM HOLDEN, Pennsylvania, 

Vice Chairman 

MIKE MCINTYRE, North Carolina 

BOB ETHERIDGE, North Carolina 

LEONARD L. BOSWELL, Iowa 

JOE BACA, California 

DENNIS A. CARDOZA, California 

DAVID SCOTT, Georgia 

JIM MARSHALL, Georgia 

STEPHANIE HERSETH, South Dakota 

HENRY CUELLAR, Texas 

JIM COSTA, California 

JOHN T. SALAZAR, Colorado 

BRAD ELLSWORTH, Indiana 

NANCY E. BOYDA, Kansas 

ZACHARY T. SPACE, Ohio 

TIMOTHY J. WALZ, Minnesota 

KIRSTEN E. GILLIBRAND, New York 

STEVE KAGEN, Wisconsin 

EARL POMEROY, North Dakota 

LINCOLN DAVIS, Tennessee 

JOHN BARROW, Georgia 

NICK LAMPSON, Texas 

JOE DONNELLY, Indiana 

TIM MAHONEY, Florida 

BOB GOODLATTE, Virginia, 

Ranking Minority Member 

TERRY EVERETT, Alabama 

FRANK D. LUCAS, Oklahoma 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

JO BONNER, Alabama 

MIKE ROGERS, Alabama 

STEVE KING, Iowa 

MARILYN N. MUSGRAVE, Colorado 

RANDY NEUGEBAUER, Texas 

CHARLES W. BOUSTANY, JR., Louisiana 

JOHN R. ‘‘RANDY’’ KUHL, JR., New York 

VIRGINIA FOXX, North Carolina 

K. MICHAEL CONAWAY, Texas 

JEFF FORTENBERRY, Nebraska 

JEAN SCHMIDT, Ohio 

ADRIAN SMITH, Nebraska 

KEVIN MCCARTHY, California 

TIM WALBERG, Michigan 

PROFESSIONAL STAFF

ROBERT L. LAREW, Chief of Staff 

ANDREW W. BAKER, Chief Counsel 

WILLIAM E. O’CONNER, JR., Minority Staff Director 

SUBCOMMITTEE ON LIVESTOCK, DAIRY, AND POULTRY

LEONARD L. BOSWELL, Iowa, Chairman 

KIRSTEN E. GILLIBRAND, New York 

STEVE KAGEN, Wisconsin 

TIM HOLDEN, Pennsylvania 

JOE BACA, California 

DENNIS A. CARDOZA, California 

NICK LAMPSON, Texas 

JOE DONNELLY, Indiana 

JIM COSTA, California 

TIM MAHONEY, Florida 

ROBIN HAYES, North Carolina, 

Ranking Minority Member 

MIKE ROGERS, Alabama 

STEVE KING, Iowa 

VIRGINIA FOXX, North Carolina 

K. MICHAEL CONAWAY, Texas 

JEAN SCHMIDT, Ohio 

ADRIAN SMITH, Nebraska 

TIM WALBERG, Michigan 

CHANDLER GOULE, Subcommittee Staff Director 


bajohnson on PROD1PC69 with HEARING
(III) 

C O N T E N T S 

Page 

Boswell, Hon. Leonard L., a Representative in Congress from the State of 

Iowa, Opening statement ..................................................................................... 1 

Prepared statement .......................................................................................... 40 

Hayes, Hon. Robin, a Representative in Congress from the State of North 

Carolina, Opening statement .............................................................................. 3 

Peterson, Hon. Collin C., a Representative in Congress from the State of 

Minnesota, Opening statement ........................................................................... 5 

Goodlatte, Hon. Bob, a Representative in Congress from the State of Virginia, 

Opening statement ............................................................................................... 6 

Baca, Hon. Joe, a Representative in Congress from the State of California, 

Prepared statement .............................................................................................. 46 

Kagen, Hon. Steve, a Representative in Congress from the State of Wisconsin, 

Prepared statement .............................................................................................. 43 

Lampson, Hon. Nick, a Representative in Congress from the State of Texas, 

Prepared statement .............................................................................................. 48 

WITNESSES 

Conner, Hon. Chuck, Deputy Secretary, U.S. Department of Agriculture, accompanied by Dr. Joe Glauber, Deputy Chief Economist, U.S. Department 

of Agriculture, Oral statement ............................................................................ 8 

Prepared statement .......................................................................................... 78 

Morales, Ernie, Member, National Cattlemen’s Beef Association, Texas Cattle 

Feeders Association, Devine, Texas, Oral statement ........................................ 21 

Prepared statement .......................................................................................... 95 

Wonderlich, Rob, Dairy Farmers of America, Ollie, Iowa, Oral statement ........ 23 

Prepared statement .......................................................................................... 100 

Philippi, Joy, Immediate Past President, National Pork Producers Council, 

Bruning, Nebraska, Oral statement ................................................................... 24 

Prepared statement .......................................................................................... 105 

Seger, Ted, Farbest Foods, Inc., Huntingburg, Indiana, Oral statement ........... 26 

Prepared statement .......................................................................................... 115 

Herman, Matthew, Complex Manager, Tyson Foods, on behalf of National 

Chicken Council and North Carolina Poultry Federation, Monroe, North 

Carolina, Oral statement ..................................................................................... 28 

Prepared statement .......................................................................................... 122 

Truex, Ron, President and General Manager, Creighton Brothers, LLC, on 

behalf of United Egg Producers, Atwood, Indiana, Oral statement ................. 29 

Prepared statement .......................................................................................... 130 

Shurson, Gerald, Professor, Department of Animal Science, University of 

Minnesota, St. Paul, Minnesota, Oral statement .............................................. 31 

Prepared statement .......................................................................................... 134 

SUBMITTED MATERIAL 

The American Feed Industry Association, Renewable Fuels Association, and 

National Corn Growers Association from Arlington, Virginia, submitted 

material ................................................................................................................. 59 


bajohnson on PROD1PC69 with HEARING

bajohnson on PROD1PC69 with HEARING
(1) 

HEARING TO REVIEW THE IMPACT OF FEED 

COSTS ON THE LIVESTOCK INDUSTRY 

THURSDAY, MARCH 8, 2007 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON LIVESTOCK, DAIRY AND POULTRY, COMMITTEE ON AGRICULTURE, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in room 

1302 of the Longworth House Office Building, Hon. Leonard L. 

Boswell [chairman of the Subcommittee] presiding. 

Members present: Representatives Boswell, Kagen, Holden, Baca, 

Cardoza, Lampson, Donnelly, Costa, Mahoney, Peterson (ex officio), 

Hayes, King, Schmidt, Smith, Walberg, and Goodlatte (ex officio). 

Staff present: Chandler Goule, Scott Kuschmider, Rob Larew, 

John Riley, Sharon Rusnak, April Slayton, Debbie Smith, Kristin 

Sosanie, John Goldberg, Alise Kowalski, Josh Maxwell, Pam Miller, 

Pete Thomson, and Jamie Weyer. 

STATEMENT OF HON. LEONARD L. BOSWELL, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA 

Mr. BOSWELL. We will call the meeting to order and I see we 

have got quite a gallery out there today that we welcome, and 

there is so much going on today, you may be a little bit chagrined 

about where is everybody? Well, there is more stuff going on, 

whether it is Walter Reed or here or wherever and it is quite a bit 

of activity. And as you know, everything is recorded and available 

to our members and they will have access to what you have to say 

and what the give and take will be and so on. But I just want to 

start off with welcoming you here, Mr. Secretary, and I am going 

to make a few comments and then of course we will call on my 

friend and colleague, Mr. Hayes, as the ranking member, to share 

and then we will hear what you have to say and go from there. 

But I appreciate everybody for being here. It is a challenging 

time and I find when I go back to my district across the country 

and talking to people at USDA, as I have before and now and we 

will continue this, and talking with dairy farmer, who is going on 

the next panel, Mr. Wonderlich is here and I have been to his farm. 

He is doing things quite a bit different than my dairy experience, 

but we will talk about that later. We did it the way we did it in 

those days, but it has changed. The feed costs have gone up so dramatically and as expected, it has got us all stirred up. People out 

there wonder how in the world they are going to be able to make 

it work and et cetera and so on. So we just felt like it was appropriate talking with Congressman Hayes about this. It kind of helps 


bajohnson on PROD1PC69 with HEARING
2 

for me and I think, for him. I will let him speak for himself, of 

course, but we are friends. We have sat together in the cockpit a 

time or two and we will do it, I am sure, in the future. We have 

set out and took a shot at a bird together a time or two. We have 

sat on the Aviation Committee together and other things and we 

are friends and so we are going to make every effort to work together and make this bipartisan. And I would hope that we are so 

good at it that when people come in and visit our committee, they 

won’t know who are the Republicans and who the Democrats are, 

because we are working together. That is my goal. 

But the issue on the feed costs is causing quite a stir and it 

would be interesting to hear what you have got to say about it as 

feeders and producers. Many people that are producing also invested in ethanol plants, I find, and so it will be interesting how 

we discuss that today. I think all will agree that renewable energy 

and having a chance to grow it out of the ground and do it the way 

we do it, that a lot of people, including myself, have been working 

on this for years. And I will just share this with you. I was wearing 

the uniform and still in the service in Portugal in the early 1970s 

when we had the first fuel crisis, and good people that I have 

known for a long time, just watching what happened in the community, and I don’t think their community is different than ours, 

what chaos took place when they couldn’t get gas to run their car 

or the truck or delivery wagons and so on. It was unbelievable and 

it made me realize for the time that we are, in fact, in bondage in 

the grasp of OPEC and I have been thinking about that ever since. 

That was back in the early 1970s. Well, a lot of States, and mine 

included and others, have done a lot of work on it. 

So we are coming to this new era in agriculture and it seems to 

me that we have got a situation that is certainly a challenge, but 

I think it is a good challenge in the sense that it is causing us to 

sit down and figure out how we get this all sorted out and that is 

why we are here today. I think there is light at the end of the tunnel, it will work out, but we want to do it as painlessly as we possibly can and we want to be aware and responsive as best we can 

to the needs of everybody that is involved in this, because we are 

in the agriculture business together. 

And there is just one other last thought before I turn it over to 

Robin that I wanted to share with you. I would spend a lot of time 

with, and I know Robin does too, with my colleagues from the city, 

if you will. Good friends. New York, Los Angeles, Dallas, Houston, 

wherever. They too, in a sense, are involved in agriculture because 

we have got to eat and I find it interesting when I talk to people 

about the subsidies or the benefits or whatever, the program, if you 

will. Oh, you farmers. And I say hold everything. Just reflect a little bit and if you don’t know this you need to know it, because it 

affects everybody in your community and your constituency, and 

that is the cost and the availability and the safety of food. And I 

know, Mr. Secretary, you may have figures, I am not asking for 

them, but you might have. The last time I checked, the percentage 

of disposable income for food that is the safest and most plentiful 

in the world and the biggest variety, is the least in this country 

than anywhere else in the world. It has been that way for quite a 

while. It runs 14 to 17 percent, as you put all the populations toVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
3 

gether. Compared to modern Europe over there, and I have spent 

a lot of years over there and some of you have, too, I am sure, it 

is 25 percent more. Up to the undeveloped countries, it is 100 percent. So you know, Congressman or Congresswoman from the big 

city, you are invested in agriculture. And so it is not just those producers out there, it is all of us, as a population, that should and 

must have an interest in this and if we do it by doing a good farm 

bill, the things we are called on to do, then we all are better off. 

So I think that that is important for us. It is a continuing education thing and I am going to keep it up and I know that my colleague and partner here will too, and others and we have just got 

to all remember this. But today we wanted to start with the Secretary here and the Department telling us about the impacts of 

high feed costs and how we may look at ways to increase production or deal with the challenge of the problem. So I look forward 

to those comments and at this time, I would like to recognize my 

Ranking Member, Mr. Robin Hayes from North Carolina. 

STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF NORTH CAROLINA 

Mr. HAYES. Thank you, Mr. Chairman, and I thank all of you all 

for being in here. Leonard and our very good friends enjoy working 

together. I look forward to being here this morning, being and 

working with him on a mutually important project and again, it is 

a lot more fun when you really work well together and I appreciate 

his kind words. I want to thank all of our witnesses for making the 

great effort to be here today. I particularly want to thank Matthew 

Herman from Monroe, North Carolina, for being able to come and 

testify and making his way through the snow yesterday. Matthew 

is an 8th District constituent and serves as Complex Manager for 

Tyson Foods. I look forward to hearing from you and the others to 

get a better understanding of the impact that feed costs are having 

on livestock production in North Carolina and across the country. 

I can assure you that I have heard from many of my constituents 

and producers about the effects of feed costs on the livestock producers’ bottom line. The district is one of the top poultry producing 

districts in the Nation. I have heard a great deal from pork producers as well, and turkey, chickens, hogs, not able to utilize the 

ethanol byproducts as efficiently as cattle and dairy cows. There 

are serious concerns in the livestock sector that need to be heard 

and taken into consideration. 

Furthermore, I want to commend the North Carolina pork industry and the North Carolina poultry industry for taking proactive 

steps to consider various technologies that may convert waste into 

energy. Folks, times have changed. We are now converting excess 

animal nutrients into energy and let us don’t forget those changes 

because it is important. With pork and poultry being the largest 

livestock sectors in North Carolina, it is important for the constituents to have access to and utilize all these technologies which add 

value. I know more needs to be done in the area, but again, I appreciate the industry looking ahead to the future and how they can 

play a role as America strives for energy independence, which has 

a tremendous positive impact on our foreign policy as well as our 

everyday lives. 


bajohnson on PROD1PC69 with HEARING
4 

Well, I look forward to hearing from you all to get a better national perspective and also sympathize with you on other important 

issues your industry may face that could dramatically increase 

your cost of production. This farm bill will be important for all of 

America’s producers and my goal is to ensure that we do not place 

costly burdens and mandates on our livestock producers. But again, 

Leonard and I are committed to making sure that government, in 

its nimble way of doing things, does not put those costs on you that 

are really hard to get back. If you look at the costs associated with 

such issues as mandatory country of origin labeling, ban on packer 

ownership and onerous environmental regulations, the industry 

has many volatile issues at the forefront that could have a major 

impact on production costs and the livelihood of the industry. Certainly, we sympathize with your concerns about production costs 

that you face today and the hurdles that you will face in the future. 

Mr. Chairman, again, thank you for holding this hearing and allowing the livestock industry to be heard on this issue. I look forward to working with you on this issue and others, since the farm 

bill is on the near horizon. I look forward to today’s testimony and 

the insight that each witness will provide on this issue. I appreciate all of you being here so we can learn more about the effects 

on each sector of the industry and again, having the chance to meet 

some good folks I have not known before and the fine gentleman 

from Iowa. That you all are so important to our industry and our 

future and our economy, I charge the Secretary with providing the 

balance and he can do it. To some it is a cost, to some it is a price. 

We are in the same bin together. I want to take those perceived 

differences and instead of being price and cost, let us be value, how 

we can add value to the industry and the producer in a sustainable 

upward movement that is good for everyone. Folks pay very, very 

little for the food that they eat. If you live in Washington, you pay 

a lot more, but in Iowa or North Carolina, it is not quite as bad. 

But thank you all for being here. 

Mr. BOSWELL. Thank you, Congressman Hayes. Just a little bit 

for us up here. As I told you earlier in my opening comments, we 

are scattered all over this campus today for the various things 

going on and there will be people coming and going. I will have to 

repeat this to our committee, but it is sort of a housekeeping thing. 

We are going to run the thing in this way if everybody is cooperative and I know they will be. But when we gavel in, by seniority, 

whoever is here, that is who we will recognize in that order and 

as they come in the order they come. And we are always very appreciative when we have the ex-officios here, if you will, and that 

is of course the chairman, who is present with us today, and the 

ranking member. And so when they come, we are honored to have 

them here and we will of course offer them an opportunity to say 

what they would like to say. As far as the rest of the panel is concerned, I am going to request that you address the questions when 

the time comes and not make lengthy opening remarks, unless 

something is really burning inside of you. Then you, of course, 

come and talk to us and we will consider. But we certainly want 

your written comments and questions and it will be part of the 

record. So having said that, I would like to, at this point, recognize 


bajohnson on PROD1PC69 with HEARING
5 

our committee chairman, Mr. Peterson, if he wants to make any 

comments. 

STATEMENT OF HON. COLIN PETERSON, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF MINNESOTA 

Mr. PETERSON. Well, I thank the chairman and thank you for 

providing the leadership on this committee and on this issue, and 

also Ranking Member Hayes, for holding this hearing today, and 

I appreciate the Deputy Secretary and Dr. Glauber for being with 

us today, as well as all of the folks that have an interest in this 

issue and to share their views with the subcommittee. 

One of the biggest developments that agriculture in rural America has seen in many years has been the growing demand and expanding market for agriculturally-based energy sources such as 

ethanol and biodiesel. This demand for ethanol continues to grow 

and it is supported, not just in farm country, but by those in the 

suburbs and the cities who are overwhelmingly in favor of utilizing 

homegrown renewable fuels as a way to reduce our Nation’s dependence on foreign energy once and for all. This demand has highlighted the issue of feed costs and their impact on the livestock industry, as corn prices have climbed near historic high levels. And 

I think it is important to look at corn prices and their effect on livestock with some historical perspective. When corn was under $2 a 

bushel, that low price had an effect on beef and poultry and pork 

industries, just as high prices do today. Those industries were able 

to benefit, not only with major input costs being priced low and a 

lot of times below the cost of production, but also with the Federal 

farm safety net for grains, like corn and soybeans, that allowed us 

to have this kind of a system. The 2007 Farm Bill our committee 

will consider this year will maintain this safety net, but it will also 

include an energy title that will help us meet the growing demand 

for the next generation of ethanol beyond corn and that is cellulosic 

ethanol and also work on feed stocks for biodiesel. Federal loan 

guarantee programs that we hope to get in place will speed up the 

commercialization of cellulosic ethanol and biodiesel, which can 

take the pressure off of corn and I believe that this is a real key 

moving forward, not only to achieving energy independence, but to 

stabilize this whole situation. 

One issue that will come up as the farm bill, the way it progresses, is the idea of removing acres from the popular CRP and 

placing them into production. We are looking at this issue. I think 

that some people have overstated the amount of acres that are actually available and one of the things that I don’t want to have 

happen is for us to put acres into production that are going to 

cause more disaster problems, more crop insurance problems, and 

so I think I we need to be very careful. And also understand that 

CRP has been a great boon to wildlife and you know, it has protected a lot of this marginal and highly erodable land that probably 

shouldn’t have been farmed in the first place. 

So I look forward today to this hearing about the excellent research that is being done in the field of distillers dried grain, an 

ethanol co-product that is being used by our different livestock industries. Ethanol plants in my home State of Minnesota and neighboring South Dakota are producing about a quarter of the three 


bajohnson on PROD1PC69 with HEARING
6 

and a half of the DDGs that are being produced annually in North 

America. And we are doing some good research on looking at 

fractionating corn and splitting it into protein and oil and fiber before we put it in the ethanol process and I think this has a lot of 

potential to alleviate some of this feed problem. And we need to do 

research, additional research. We have people in our State that are 

doing this and I am looking forward to the testimony of Dr. 

Shurson from the Department of Animal Science at the University 

of Minnesota, to hear about some of the work that they are doing. 

And we will, as I say, try to increase research funding so that we 

can do more work in this area. So I just want to assure everybody 

that this committee is going to be very vigilant. We do not want 

to harm the animal agriculture industry. This is the premier valueadded industry that we have in this country and it is important 

and we need to make sure that we not only maintain it, but that 

we allow it to grow. So again, I appreciate, Mr. Chairman, your 

leadership, and the ranking member, and look forward to the testimony from the witnesses. Thank you. 

Mr. BOSWELL. Thank you, Mr. Chairman. I would like to recognize Mr. Goodlatte for what remarks he might want to make. 

STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF VIRGINIA 

Mr. GOODLATTE. Well, thank you, Mr. Chairman, and I want to 

thank you and the ranking member for showing concern about this 

issue and I very much appreciate having Secretary Conner and Dr. 

Glauber and our other witnesses here today, because this is a matter of grave concern to me. So I would like to thank you for calling 

today’s hearing. And let me state from the outset that I support all 

of our efforts to develop new market opportunities for the Nation’s 

agricultural producers, no matter what the commodity or product. 

As I visit with the livestock producers of the 6th District of Virginia, poultry and eggs, cattle and calves, hogs and pigs, milk and 

dairy, the one recurring concern I hear about is the high cost of 

feed. High feed prices are naturally a concern to all livestock producers and it is important that this subcommittee examine the 

long- and short-term implications of policies that affect production 

costs. For livestock producers, corn is an absolute necessity for 

which there is no substitute. However, there are a number of other 

factors that are adding to the increased cost of production for livestock producers that cannot be ignored. 

While today we are specifically discussing the effect of feed prices 

on livestock production, we must recognize that there are a variety 

of other factors in play as well. We should perhaps view today’s 

hearing as a cautionary tale illustrating the impact of unintended 

consequences. Today we are discussing how increased ethanol production leads to higher grain costs, which can in turn mean higher 

feed costs for livestock producers and lower profitability. However, 

I think what we will hear today is that when you add costs, any 

costs, to the livestock production system, you injure livestock producers. It makes no difference if these costs are higher grain prices, 

investments forced by mandatory animal identification, production 

costs associated with country of origin labeling, market disruptions 

caused by packer/ownership bans, or regulatory burdens associated 


bajohnson on PROD1PC69 with HEARING
7 

with environmental policies, the outcome is the same. When we 

take actions that add costs to the animal agriculture sector, we 

hurt livestock producers. 

Recent policies enacted by Congress have created much excitement in the development of renewable energy. The creation of a 

Renewable Fuels Standard in the Energy Policy Act of 2005, along 

with several production tax credits and the phase out of methyl 

tert-butyl ether (MTBE), have helped fuel investment in new ethanol and biodiesel plants and created more markets for agricultural 

products. In the State of the Union address, the President outlined 

his 20 and 10 proposal to reduce domestic fuel consumption by 20 

percent by 2017. This initiative is extremely ambitious and can 

only be achieved with contributions from all components of the agriculture sector, including grains and soybeans, plant and wood 

waste, vegetable oil and animal fat and waste. 

However, last year, 20 percent of the U.S. corn crop was used for 

ethanol production and that amount is expected to rise significantly 

over the next few years. Currently, corn is the leading commodity 

used to produce renewable fuels. Corn is also the staple feed stock 

for livestock producers and increased demand for corn has resulted 

in the highest corn prices we have seen in more than a decade. The 

high price of corn, coupled with increases in other input costs, has 

put producers in a tough spot financially. Livestock producers have 

always been the most reliable consumers of corn and soybeans. We 

must be cautious that our policies do not cause unintended economic distortions to either grain or livestock producers as the renewable fuel market continues to grow. As input costs continue to 

rise and we work to reduce our dependency on foreign sources of 

energy, we must do all we can to promote the development of alternative fuels as well as working to create new market opportunities 

for our agricultural producers. 

At the same time, however, we must also ensure that we continue have a reliable and affordable feed supply for our livestock 

industry. Reduced reliance on foreign energy sources, stable energy 

prices, and the creation of new markets for agricultural products 

are all positive benefits of the growth of the renewable fuels industry. However, there must be balance. The needs of the renewable 

fuels market and the livestock industry can be met simultaneously 

without significant price or supply distortions. 

Mr. Chairman, again, I thank you for holding this hearing on 

this very important issue and I look forward to hearing the testimony from today’s witnesses. 

Mr. BOSWELL. Thank you for being with us this morning. You 

will always be welcome, of course. So we would like to welcome our 

first panel to the table, the Honorable Chuck Conner, Deputy Secretary of the USDA, accompanied by Dr. Glauber. Am I saying it 

correct? 

Mr. GLAUBER. It is Glauber. 

Mr. BOSWELL. Glauber. Okay, I got that. The Deputy Chief Economist. We are glad to have you here. Secretary Conner, we are anxious to hear what you have got to share. Please begin. 


bajohnson on PROD1PC69 with HEARING
8 

STATEMENT OF HON. CHUCK CONNER, DEPUTY SECRETARY, 

UNITED STATES DEPARTMENT OF AGRICULTURE, ACCOMPANIED BY DR. JOE GLAUBER, DEPUTY CHIEF ECONOMIST, 

UNITED STATES DEPARTMENT OF AGRICULTURE 

Mr. CONNER. Chairman Boswell and Ranking Member Hayes, I 

do really appreciate the opportunity for the Department of Agriculture to be a part of this hearing today. Mr. Chairman, I especially appreciate the outreach and the statements you made about 

your relationship with Mr. Hayes, as well, and the bipartisanship 

of this subcommittee, and I will just tell you that the U.S. Department of Agriculture wants to be part of that bipartisanship as well. 

I think we have challenges ahead of us in this field of energy and 

feed costs. There is no question about that. But I think we need 

to keep in mind that those challenges are the result of some unprecedented opportunities that we have in American agriculture 

that many of us and many of you have strived for, you know, for 

much of your career. And so I think we need to keep that in mind 

as we review these challenges that we have in front of us today. 

I am joined today by Dr. Joe Glauber, our USDA Deputy Chief 

Economist, and we will provide a brief status report on the rapid 

growth in biofuels and its implications on the livestock and poultry 

industry. I have a much longer and more detailed statement, Mr. 

Chairman, that I would ask be made a part of the record as well, 

and I will summarize that statement. 

High oil prices and government programs, technology advances 

and private investment have indeed generated a rapid growth in 

biofuels production. Biofuels production is creating rural income 

and employment growth that we have not seen in a long time, 

while providing environmental and energy diversification benefits. 

It is also changing farm management, production and related industries across the agricultural sector. The rapid pace of biofuels 

production has been simply amazing. For the 2006 crop year, we 

forecast that about six billion gallons of ethanol will be produced, 

utilizing about 20 percent of the corn harvest. For the coming 2007 

crop year, we now project nearly nine billion gallons will be produced, using approximately 26 percent of our corn crop. Similarly, 

biodiesel production has increased at a dramatic rate as well. 

The strong demand for ethanol, lower corn production and increased corn exports have pushed corn farm prices to very near 

record levels. USDA forecast farm prices for the 2006 crop will average $3.20 per bushel and rise to a record $3.60 per bushel for the 

2007 crop. Prices for other feed grains and soybean meal, of course, 

have also risen as well. Higher feed prices have raised the cost of 

producing livestock, poultry and livestock products and led to concerns among livestock producers about the future profitability of 

their business. Although producers are facing higher feed costs, 

firm consumer demand for meat and poultry, growing exports, and 

reasonably attractive prices are expected to help support our producers during this period of adjustment. 

Total U.S. production of meat and poultry and exports are forecast to be record highs in 2007. These increases are expected to 

boost livestock receipts to a record $125 billion this year. With a 

modest increase in beef production expected this year, fed cattle 

prices should remain stable. Feeder cattle prices are expected to 


bajohnson on PROD1PC69 with HEARING
9 

decline from their recently very strong levels, as feedlots reduce 

their bids for feeder cattle to offset the increase in feed costs. Higher pork production is expected to lead to lower hog prices, while 

tighter domestic supplies for broiler meat could support higher 

broiler prices going forward. Retail meat prices are expected to increase by less than one percent in 2007. Milk prices, as you know, 

are rebounding from their decline experienced in the early part of 

last year and are expected to be up nearly 15 percent in 2007. 

Poultry producers can adjust more rapidly to changing feed costs 

than other livestock producers. As a result of lower prices in 2006 

and higher feed costs, they have slowed production and that is now 

being reflected in higher broiler prices. Adjustments for cattle, hog 

and dairy producers do take longer and further changes in feed 

prices will play an important role in their production decisions in 

2007 and beyond that. With sustained higher feed costs, longerterm adjustments for beef, pork and poultry are generally similar. 

Each production sector experiences a decline in returns as feed 

prices are not immediately offset by higher livestock product prices. 

Falling returns, of course, eventually lead to less production and a 

return to higher prices. 

Several important factors, Mr. Chairman, will affect the adjustment in livestock markets. First, forage supplies will be critically 

important for cattle. Compared with a year ago, the portion of the 

Nation’s cow inventory in drought areas has declined sharply and 

forecasters expect improving pasture conditions in the Plains 

States this spring. Second, as ethanol production increases, there 

will be more dried distillers grain available for feeding. While hogs 

and poultry are more limited in their ability to use DDGs than cattle, this co-product feed will certainly augment our total livestock 

feed supply. Third, continued U.S. income growth and record livestock exports should maintain strong meat prices and meat demand, supporting livestock returns during this period. And fourth, 

the high corn prices will likely result in a substantial increase in 

corn production in 2007 and will lower our corn exports. Our analysts do believe that the corn-planted area will increase by nearly 

nine million acres, resulting in the largest corn-planted area in 

nearly 60 years. This increase should help corn supplies meet the 

needs for fuel, food and of course, feed. 

To further evaluate the short- and long-term potential impacts of 

increased corn demand for ethanol, Secretary Johanns and I have 

established a livestock and poultry feed working group. Under Secretary Mark Keenum will be tapped to lead this effort. This group 

will work to ensure that the Secretary and I have a full understanding of the feed grains complex as the market adjusts in the 

short term to incorporate this new and powerful dynamic. And of 

course we will, Mr. Chairman, share all of the results of this working group with this subcommittee as we move forward. 

At USDA, we believe that biofuels will be an essential part of the 

strategy to reduce the Nation’s dependence on the imported oil. 

Even so, there are many uncertainties in how biofuels and agricultural markets will unfold in the coming years, including global economic growth, the price of crude oil, gasoline and ethanol, the rates 

at which cellulosic ethanol and other alternative energy sources are 

commercialized, and the emergence of technologies that improve 


bajohnson on PROD1PC69 with HEARING
10 

the use of ethanol co-product feeds, and finally, the increases in 

yields of corn, soybeans and other crops, to name several factors. 

We believe our corn supplies are limited in their ability to support 

continued expansion of biofuels. They are limited. Cellulosic feed 

stocks, such as residues, waste, forest materials and grasses, can 

fuel the Nation’s vehicles and relieve some of the pressures now 

placed solely on the corn market. The President’s proposal to reduce gasoline use by 20 percent in 10 years is based upon the expectation that cellulosic ethanol will play a key role in achieving 

this goal. The Administration’s 2007 Farm Bill proposal includes funding, about $1.6 billion over the next 10 years, to support research and commercialization of cellulosic ethanol. 

One thing seems clear, Mr. Chairman, the growth of biofuels in 

the United States has the potential to greatly reduce our reliance 

on imported oil and in doing so, transform U.S. agriculture and we 

believe this is a good thing. In the near term, livestock producers 

are facing higher feed costs and a notable period of adjustment. 

More corn acreage, higher corn yields, better use of DDGs, and 

strong global demand for livestock products, we believe will help 

cushion this adjustment going forward. In addition, as we progress 

down the road to commercial-scale cellulosic ethanol, feed stocks 

other than corn we believe will increasingly be used in our biofuels 

production complex. 

That completes my oral statement, Mr. Chairman. Again, we 

have provided a lot more analysis in my written statement that is 

part of the record and we will certainly be happy to answer questions or comments from the subcommittee at this point. 

[The prepared statement of Mr. Conner appears at the conclusion 

of the hearing.] 

Mr. BOSWELL. Thank you very much, Mr. Secretary, we appreciate that and we will have questions. And I just might remind the 

members that weren’t here when I made the opening statement, 

that we will recognize them by seniority, who were here when the 

gavel fell and then after that as they arrive, and I appreciate you 

understanding that. And of course, we are not asking for opening 

remarks from Members. We ask that you submit what you might 

want for the record and we want adequate time for the questions 

and the give-and-take process. So with that, I would like to recognize Mr. Donnelly from Indiana for five minutes. 

Mr. DONNELLY. Thank you, Mr. Chairman. Obviously, in my district in Indiana, we are feeling the same pinch. I have had meetings with farmers throughout my district. We have 12 counties and 

in one of the first or second meetings, it was after the meeting that 

about three fellows came up to me and quietly said, we are the 

livestock guys. We have got to sit down and talk. And their concern 

is palpable and understandable. And so my question is, how do you 

see fixing this quandary or where we go in the future? And some 

of the farmers have said, well, you know, our concern is that our 

feed costs are going up, but we are not going to be able to pass this 

along to the marketplace. And sitting next to them is a grain producer who says, I have been struggling through $2 corn for most 

of my life. And so they are saying this is our chance to try to catch 

up. And the livestock producer, as I said, is saying to us, well, we 

are not sure we can pass it on to the marketplace. And the grain 


bajohnson on PROD1PC69 with HEARING
11 

producers are saying, well, you know, the consumer will have to be 

the one to judge whether they can pay some more for pork chops 

or for chicken or whatever. So I am just wondering where you see 

this quandary. We are looking for that balance and how do we get 

there. And I know that is the magic question. 

Mr. CONNER. Yes, it is. Well, Mr. Donnelly, I am very familiar 

with your district in Indiana and I know you have got mixed points 

of view, because you have got some tremendous corn producing 

areas in there, as well as the important livestock sector. 

Mr. DONNELLY. Right. 

Mr. CONNER. And this is a balance. Let me just say that, generally speaking, you know, this is a good problem for us to be trying to address at this point. In working many, many years on these 

types of issues before this committee and before the Senate, I will 

tell you that our goal of value-added agriculture was an illusive 

goal for a very, very long period of time and we are seeing that 

goal, you know, come together. And obviously, I think it would be 

unanimous around this subcommittee and the full committee that 

the notion of us growing more of our energy needs is a very, very 

positive thing for this country and reducing our reliance as well. 

Mr. DONNELLY. One of the other comments we have had is this 

is the first time a lot of the folks have had a spring in their step 

for a long, long time. 

Mr. CONNER. Absolutely. So it is a balance. As I noted in my 

statement, Mr. Donnelly, we do anticipate that farmers are going 

to react to the market signals that are being sent to them right 

now. You know, historically, we talked about a corn/soybean price 

ratio of about 2.5 to one. That changed a little bit and we started 

talking about a 2.2 to one. Well, the current corn/soybean ratio, you 

know, in the Midwest is quite bit less than two to one right now. 

Our estimates do show that, producers will respond to market signals. We are estimating, again, as much as nine million additional 

acres of corn to be made available out there. We are anticipating 

that farmers are going to be able to justify going for those higher 

yields now and, we think the market will respond to this. Our first 

crop report is on March 30, where we will actually go out and survey producers, in terms of their planting intentions. That is a very 

important report for our future and certainly for the future of this 

subcommittee, as we carefully analyze and monitor this situation. 

But again, our expectation is that that report is going to show that 

the market is working here and that the price signal that the corn 

market is sending is going to be something the producers are going 

to take full advantage of. 

Mr. DONNELLY. Thank you, Mr. Chairman. 

Mr. BOSWELL. Thank you. Mr. Goodlatte, did you have questions 

you would like to ask? I recognize that you may have other things 

you want to do. 

Mr. GOODLATTE. Well, thank you, Mr. Chairman. I very much 

appreciate it. Secretary Conner, we very much appreciate your testimony and I certainly agree with you, that times are good for 

American agriculture. However, there are many, many parts of the 

country that are not like the gentleman from Indiana’s district, 

where there is a choice between crop production and value-added 

livestock production and that is true of virtually the entire east 


bajohnson on PROD1PC69 with HEARING
12 

coast of the United States, more and more so. Certainly true in my 

district in the Shenandoah Valley of Virginia, which I have had the 

honor of having you come and visit to see what we do there. For 

many, many years, back over 100 years ago, the Shenandoah Valley was known as the breadbasket of the Confederacy. It was the 

production of wheat and things like that. But we have expansion 

westward and other lands being farmed that are more suitable for 

that. The rolling hills of the Shenandoah Valley are not very suitable for large-scale row crop production and almost all of the corn 

and so on produced in the area comes from and is used for feeding 

livestock. So beef cattle and dairy and poultry, which is by far the 

largest industry, allow people to maintain that farmland. Poultry 

farmers have a very good living on a small amount of land, but 

when they are squeezed as they are today by the price of corn, we 

risk losing that type of land, not just in my district, but all across 

the entire east coast of the United States, if we do this. Their option is between livestock production and selling out to developers. 

So there is a lot of support from surprising groups of people who 

want to make sure that we maintain those farms that are a buffer 

against the sprawl that has hit many parts of our region of the 

country. What do you say to those folks who can’t use dried distiller grains, who have a major industry is up against it because 

they simply don’t have the ability to make the alternative? They 

don’t see the other side of that coin that somebody in Indiana 

might see because of the great opportunity that ethanol does 

present to row crop farmers. 

Mr. CONNER. Well, Mr. Goodlatte, let me just address that generally and then if Joe has any specific comments to add to this. I 

think how you address them is certainly you can’t say in any way 

that, going from virtually none of your corn for ethanol production 

a few short years ago to 30 percent of, some very, very large corn 

crops going for ethanol, that change cannot occur without, resulting 

in some fundamental changes in other sectors of American agriculture. 

Mr. GOODLATTE. Do you think we should have price support systems for livestock production like we do for grain production? 

Mr. CONNER. Well, I suspect if I suggested that, Mr. Goodlatte, 

I would probably get egged by some of my Indiana friends that the 

subcommittee is going to hear from next. I don’t think anyone in 

the livestock sector is soliciting that type of thing at this point. But 

you know, let me just say that, again, there is going to be change 

in the livestock sector and I think we would be foolhardy if we 

were to sit here and suggest that all of this occurring in the corn 

and the feed sector is not going to have some fundamental change. 

We have done a pretty detailed analysis of the impact of ethanol 

on the livestock sector, so we want to start with some good information as we analyze what we believe is still a relatively shortterm problem here, albeit a very, very important problem. We released the results of that study at our outlook conference, which focused on energy, last week. Dr. Glauber, if you want, can go 

through the details. We will certainly make that document, USDA 

agricultural projections through 2016, available for the subcommittee and the full committee to review, but it, in very specific 

detail, analyzes that impact. 


bajohnson on PROD1PC69 with HEARING
13 

Mr. GOODLATTE. Well, let me ask you a few other questions. 

Mr. CONNER. Yes. 

Mr. GOODLATTE. Because my time, I am sure, is limited. But one 

of the things I mentioned in my comments were the other things 

that we can add to the cost that livestock producers face, like mandatory animal identification, like mandatory country of origin labeling, like increased environmental regulations. What is the Administration’s position on what they can do in those areas to help buffer the increased costs that they are going to face in feed prices? 

Mr. CONNER. Well, I think you raise a good point, Mr. Goodlatte, 

and obviously, I think this subcommittee and the full committee 

need to be very, very mindful of any legislative initiatives at this 

point that would add cost to the livestock sector, albeit perhaps 

even some well-intentioned efforts. But you know, this is not a time 

to be adding any cost to the system during period that we are in 

right now. As you know, Mr. Goodlatte, we do favor a voluntary 

animal ID system for this country. I believe are we making great 

progress in terms of getting premises registered on that and are 

headed down that right path on that. On mandatory country of origin labeling, the law requires us to have that implemented in the 

not too distant future. As you know, the Administration’s policy position is against mandatory country of origin labeling. Our economic analysis, from a couple of years ago did suggest that there 

would be sizable costs. This adds into the livestock sector system, 

which we felt was inappropriate at the time and certainly during 

these kind of times, because it makes it very, very difficult. So you 

know, we hope to work with the committee in our farm bill effort 

to make sure that we are not adding on even additional costs to 

the system with this type of regulation. Obviously, on the environmental front, very quickly, as you know, we don’t want to add environmental costs to the system. That is one of the reasons we did 

choose in our farm bill proposal to increase the equip dollars by 

over $4 billion. Most of that money goes to the livestock sector to 

help them meet environmental requirements without costing them 

an arm and a leg in doing so. 

Mr. GOODLATTE. Mr. Chairman, I wonder if I might have leave 

to ask one more question of the witness. The National Chicken 

Council, the National Pork Producers Council, the National Turkey 

Federation, and the National Cattlemen’s Beef Association all favor 

allowing the exiting blenders tax credit and ethanol import tariff 

to sunset. And I am wondering your opinion about whether ethanol 

can be produced economically in the United States without the current subsidy and what impact would the expiration of the ethanol 

subsidy have on feed availability. 

Mr. CONNER. Well, Mr. Goodlatte, that particular analysis is actually included in some of the data on the document that I just 

made reference to, put together by Keith Collins and Dr. Glauber 

and our folks in the Chief Economist’s Office, so I refer you, specifically to that, because it does go through it and in some detail analyze the impact on that. As you know, Mr. Goodlatte, the Administration’s position is that we favor the continuation of the tax credit 

through its 2010 date and the Administration has said, at some 

point, we will work with Congress. This is obviously something we 

can’t change. It has to be legislated. We will work with Congress 


bajohnson on PROD1PC69 with HEARING
14 

at a later time to analyze the full impact of this situation to determine what is the appropriate steps going forward at this point. 

Mr. GOODLATTE. Let me just say that this Administration won’t 

be this Administration in 2010 and in the meantime, I think we 

need to be taking into account the long-term impact that this is 

having in the near term, and if we don’t review these policies sooner than 2010, by 2010 we may have dramatically affected sectors 

of our economy in ways that I am not sure are necessary. I do hope 

you will continue to look at the problem that particularly poultry 

and hog producers have, and there are not a lot of answers for 

them right now. 

Mr. CONNER. Yes. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. BOSWELL. Thank you, Mr. Goodlatte. I am going to step out 

of order a little bit because, when Mr. Peterson comes back, we will 

recognize him, because of their schedules, and recognize at this moment, with everybody’s concurrence, thank you, Mr. Hayes will be 

next. 

Mr. HAYES. Thank you, Mr. Chairman. And gentlemen, thanks 

for being here. A couple quick questions and short answers will be 

fine. Chairman Peterson asked about CRP. What is the short answer to which way you are looking? And we do want to protect the 

wildlife habitat. CRP, up, down, sideways? 

Mr. CONNER. Mr. Chairman, as you know, we are in the middle 

of a reenrollment process on our CRP acreage, where we are offering producers the opportunity to reenroll certain acreage in the 

CRP. That reenrollment has ranged from two years up to 15 years, 

depending upon on the environmental benefits provided by that 

land. Now, in very short order, when I say short order, I would anticipate, within the next probably 24 to 48 hours, we are going release the results of that reenrollment process and based upon those 

results, I can tell you that we believe there is a significant quantity 

of acreage, several million acres to be exact, that we will show 

where producers are, at least at this time, expressing an interest 

in getting out of the CRP. Now, we don’t know what their intended 

purposes are in getting out, but I think you can safely assume that 

some of that will be intended for production, obviously. And again, 

we will be releasing those results very soon. 

Mr. HAYES. What percentage of your acreage on corn and soybeans is used for livestock feed, roughly? 

Mr. GLAUBER. Roughly, for current feed use, about 58 percent of 

corn goes into feed, but that is declining and projected to decline. 

As we have larger and larger corn crops, more of that is going to 

ethanol. So although the feed use itself that we are projecting is 

fairly constant at around six billion bushels, the percent of total 

use is declining. And in our 10 year projections, we see that declining to around 42 percent or 43 percent. In terms of soybean, there 

the situation is, you know, we crush domestically about 1.7 billion 

bushels. That is projected to increase. And of that, most of that is 

feed. Most of the soybean meal goes into feed here. A little bit is 

exported. As we see going forward, we are probably going to be 

crushing a larger percentage of the U.S. crop. Some of that is due 

to the fact that the soybean crop is going down because of the soybean areas going into corn area. But the other thing is we are probVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
15 

ably going to be exporting and we are projected to export fewer soybeans. More of it will remain home and crushed. So we are seeing 

actual domestic crush increasing over time, and as a percent of the 

total U.S. crop, also increasing. 

Mr. HAYES. Okay. What about percentage for corn and soy on 

ethanol and biodiesel production, respectively? 

Mr. CONNER. Go ahead, Joe. 

Mr. GLAUBER. The corn data, again, that has been the real, the 

dramatic increase we have seen there has gone from, as Deputy 

Conner mentioned, six percent in 2000. It is currently around 20 

percent of the corn crop and we expect, in really short order, probably by 2009, 2010, to be up around 30 percent and plateauing off 

after that. That is for corn. The biodiesel, currently we have a little 

less than 300 million gallons of biodiesel production. That has been 

a dramatic growth from where it was. It was almost nothing in 

2000. And we are projecting that to increase to about 700 million 

gallons, which is about five billion pounds soybean oil. So a lot of 

that crush is going to be going. We are projecting that a significant 

portion of that will be going into biodiesel. 

Mr. HAYES. Okay, the next question. A number of significant 

grants have been made to our State and related institutions to 

study the economic effects of increased ethanol and biofuel production on the Midwestern economy. Some grants have been made to 

major livestock producing States outside of the Midwest, such as, 

I will pick one by random, North Carolina, to study these economic 

effects. And the last question, we are running out of time, speak 

in the answer to, are we anticipating transportation needs as ethanol and corn and soybeans, as that increases over the years. 

Thank you. 

Mr. CONNER. If I could, Congressman Hayes, my folks advise me 

that, on October 11 of 2006, Secretary Johanns and Bodman did 

announce nearly $17.5 million for 17 biomass research and development projects. One of those grants, I believe, close to a half a 

million dollars, was awarded to North Carolina, a State university, 

for the purpose of strategic positioning of biofuels in the context of 

future agriculture and oil needs. 

Mr. HAYES. That is nice, $500,000 and $17 million. 

Mr. CONNER. Well, let me just, on the transportation situation, 

I will tell you that there are equal challenges there as well. As the 

chairman knows, transportation challenges in agriculture in general, through rails, is always there. This is something we have 

worked on for a number of years and every time there is a very 

large crop out there, the question of availability of railcars and the 

transportation situation is always a huge factor on this. I will tell 

you that, the results of what we are hearing out there from folks 

around the countryside is that there has been a pretty remarkable 

reaction and positioning, in terms of the railroad industry, to meet 

the needs that are occurring out there and those needs are very, 

very substantial and they are changing dramatically every day. 

And I am not saying we are not going to always have those traditional problems that we have in agricultural, being a bulk, agricultural producer that we are, low value-type product, we are always 

going to, you know, face challenges for railroad competition. But I 


bajohnson on PROD1PC69 with HEARING
16 

think, at this point, our sense is and our analysis is that needs are 

being met out there at this stage. 

Mr. BOSWELL. Thank you, Mr. Hayes. The Chair recognizes Mr. 

Lampson for five minutes. 

Mr. LAMPSON. Thank you, Mr. Chairman. I was only teasing 

when I asked for 10. It is an honor to have you both here. Thank 

you very, very much to come and to educate us and to discuss with 

us some of the current problems that we face. I have been a longtime proponent of bioenergy and I am very pleased and excited that 

we have long overdue political and public support for this necessary and absolutely exciting transition, and I am deeply concerned about, however, the strain placed on ranchers and producers 

throughout the agriculture community due to the rapid growth of 

both, well, all sorts of biofuels, ethanol and biodiesel. And although 

consumers are not currently feeling the same squeeze that our producers are, it is only a matter of time before they do. 

And as you said, we know that the USDA is forecasting a 25 percent or so increase in the corn crop consumed by ethanol producers. 

It is our responsibility here in Congress to conduct a thorough evaluation and hopefully come up with suggestions of how to solve 

some of the problems of the harmful effects of skyrocketing demand 

that it is has already had and will continue to have for the foreseeable future on our producers and in turn our nation’s food supply. 

I have spoken often about the diversification of biomass for energy 

production and I think that we can all understand that we are not 

quite there yet. Until we are, then obviously livestock is going to 

be competing with ethanol for corn. Hopefully we will have and be 

able to ease the burden this growing demand is placing on our producers. I am chairman of the Subcommittee on Energy and Environment and one of the things that I believe we can do is provide 

a huge amount from our land for the biofuel needs. But we can’t 

do it as long as we are going to be competing with crops that provide our food. What is being done to promote the research necessary to develop new crops that typically are not used for food, the 

things like jatropha that is indigenous to India? Are other kinds of 

crops that we may know about here, even down to the point of 

using algae, which has a significant concentration of oil that can 

be turned into biodiesel. 

Mr. CONNER. Well, I appreciate the question, Congressman. It is 

a very, very important topic you raised. Let me just, if I could, 

refer you to some of the proposals that we have suggested in our 

2007 Farm Bill recommendations, because I think they do go to the 

heart of your question. For example, one of the items that we are 

suggesting is the creation of a subset within the Conversation Reserve Program, a subset meaning acreage set aside that would be 

used to grow crops like you suggest and those crops would be targeted specifically for biomass production. The producer would obviously get a conservation payment, a long-term conversation payment associated with that, but as well, he would be required to 

meet conservation requirements, as part of that land, consistent 

with, you know, the Conversation Reserve. So that is one suggestion that we have got in terms of helping producers transition to 

grow those types of crops that will be needed for biomass production. 


bajohnson on PROD1PC69 with HEARING
17 

I would also point you to a new program that we have created 

that is a bit of an offshoot of an old program called the Cellulosic 

Bioenergy Program. We have set aside $100 million for that. The 

purpose of that program, again, is to reduce the cost a little bit of 

those inputs, those cellulosic inputs, because we know that there 

is a difficult transition here in terms of those producers getting a 

foothold to grow those products economically going forward and 

competing against the traditional crops that they might be considering. So that program as well. Obviously, you are interested in research. We have got a very, very strong research and development 

section in this title, all focused towards biomass cellulosic production and finally, then, of course the loan guarantees to help us 

build the plants to continue down that path. So it is a very extensive effort in our farm bill. 

Mr. LAMPSON. But it seems like the huge preponderance of it is 

we are picking something, we are picking cellulosic ethanol as a 

good opportunity. There are many other opportunities and are we 

putting comparable emphasis on the development of those other or 

the seeking out of those other crops that could provide potentially 

as big if not a greater potential. 

Mr. CONNER. Yes, let me just say that we are, I will tell you, to 

answer very, very quickly and I would be happy to, if you want me 

to provide a very detailed briefing for you and your staff on some 

of the changes that we are making within our Agricultural Research Service. We sort of see our ARS modifying its programs into 

really sort of four pillars. The first of those pillars is exactly as you 

mentioned, cellulosic feed stock design, that very notion of what is 

the right crops to be produced out there. You know, is it switch 

grass? Is it something else that, you know, people haven’t even 

thought about? I think there needs to be, you know, R and D in 

that. Very, very quickly, because I know your time is running out 

as well. The other three parts of that is cellulosic feed stock production, the production of that product itself, the research once you 

determine what it is, then finally cellulosic feed stock logistics. It 

has got to be grown in a way that it can get to the plant in an economical way and that is a challenge for us as well. And then finally, just the conversion itself. What is the right enzyme, for example, to break down that algae that you may have mentioned or 

something like it? It may not be the traditional enzymes we have 

used in ethanol production. We need research and development to 

focus on that. 

Mr. LAMPSON. My point is that you have emphasized. You made 

my point for me. You emphasized ethanol. You talked only about 

ethanol in your answer. There are other biofuels. Biodiesel comes 

from, right now, soy. And we need other kinds of crops from which 

we can take oil, or we need to be doing, and I know my time is 

up. We need to be doing the research to identify many of those 

other crops because they are available and then helping farmers 

make that transition to the new crops, and I would indeed like to 

pursue this to a greater extent. 

Mr. CONNER. Absolutely. 

Mr. LAMPSON. Thank you, Mr. Chairman. 

Mr. BOSWELL. Thank you. Mr. Smith, please. Five minutes. 


bajohnson on PROD1PC69 with HEARING
18 

Mr. SMITH. Thank you, Mr. Chairman, and thank you for appearing here today. It has been an interesting journey, if you will, hearing from various folks on the frontlines of the ethanol industry and 

the livestock industry. I hear a concern that there is not enough 

corn, period, at any price and certainly available corn at a high 

price can hit the bottom line, but no available corn is certainly another issue. That being said, the drought impact, if Dr. Glauber 

could perhaps respond to that, what we might be able to experience 

with change in weather, you know, that is bound to happen, but 

the overall drought impact, if you could comment on that. 

Mr. GLAUBER. Sure. Well, thanks. You are absolutely right about 

the—you know, we are looking at stocks this year, being for corn, 

that is, close to five percent of estimated use. Very low levels, the 

lowest level since we had in the mid-1990s. And you are seeing 

that reflected in the futures market. They are highly volatile. Deputy Conner mentioned the March plantings report that is coming 

out at the end of the month. I think the market will be closely 

watching that. And then I think from then on out we are going to 

be watching the weather and I think you are absolutely right. With 

a tight stock situation, you know, there will be a lot of volatility 

in markets until we know what the weather, you know, how that 

is going to transform into the yields at the end of the year. So you 

are right, weather is always an issue, but it is particularly an issue 

when you have low stocks. 

Mr. SMITH. Okay. Thank you very much. Thank you, Mr. Chairman. 

Mr. BOSWELL. Thank you. The chair recognizes at the time, let 

us see, it looks like everybody has come and gone here. Would you 

check and see for Mr. Peterson? He said he might have a question 

or two before we get to the closure. Well, I will just say this while 

we have this opportunity, Mr. Secretary. We will see if Mr. Peterson can come back. Looking at your testimony today, it seems like 

a number of times a recurring theme is let the biodiesel tax credit 

and the ethanol import tariff expire and I wonder if you have any 

data or projections on how this will affect livestock and ethanol industries should that happen, and what research has been done on 

the impact on the feed costs should this be allowed to run out, 

what it might be. 

Mr. CONNER. Yes. Mr. Chairman, if I could, I made reference earlier to a publication that we released in our outlook conference, entitled USDA Agricultural Projections through 2016. I am going to 

ask Dr. Glauber to specifically refer to some of those, that data 

that you referred to, but we will make sure that the committee has 

copies of this document, because it does go into some detail of our 

projections for the future, both with and without extension of the 

tax credit. 

Mr. GLAUBER. As we have just mentioned, there is a lot of detail 

in here and I will just go through a quick summary. In our baseline 

we are showing ethanol production to increase to about 12 billion 

gallons. A lot of that is driven obviously by the high oil prices that 

we foresee over the next 10 years and the continued high oil prices. 

Our analysis shows that if the credits were removed, that you 

would see a drop in ethanol production, but not by a whole lot. It 

would drop from around 12 to around 10 billion gallons, which of 


bajohnson on PROD1PC69 with HEARING
19 

course would mean slightly lower corn area and slightly lower corn 

prices over the period, and the adjustments throughout the rest of 

the sector. I would say, though, that these, again, are predicated 

on the assumption of fairly high oil prices. If oil prices were to 

drop, for example, down to the, you know, $40 range or where we 

saw them only five years ago, or something like that, then obviously the blender tax credit becomes all the more important in 

terms of the overall profitability of the ethanol industry. 

Mr. BOSWELL. Thank you very much. The chair recognizes Mr. 

Kagen for five minutes. 

Mr. KAGEN. Thank you, Mr. Chairman, and welcome, Deputy 

Secretary Conner. It is not Conners, not Chuck Conners, it is 

Conner. 

Mr. CONNER. No rifleman. That is correct, sir. 

Mr. KAGEN. In your opening remarks and your written statement, you indicated that there was a divergent effect of ethanol expansion on the different species of livestock and in different regions 

of the country, which could result in structural changes in some 

parts. Would you expand on what you mean by structural changes? 

Mr. CONNER. As I noted, Congressman, in my opening statement, 

you know, the ability of different species of livestock to utilize the 

dried distillers grain, the byproduct of the ethanol process, does 

very considerably and I think it is fair to say that, within the cattle 

feeding sector, there is a very good ability to use these dried distillers grains to substitute for what may have been regular feed 

corn prior to that. Obviously, it has been noted as well, particularly 

within the pork industry, that ability is more limited, far more limited, as a matter of fact. In terms of the structural changes, real 

quickly, let me just say that I think, you know, part of the situation is some of the structural change you could see, for example, 

because of the beef industry’s ability to use these dried distiller 

grains. 

And I would note, the ability to use the dried distiller grains, 

even in their wet form, coming right out of the plant, what we are 

seeing in terms of structure is, you know, feeding operations occurring close by to where these ethanol facilities are. The ability then 

to feed that wet product, you know, close by, you don’t have to go 

through the expense of drying it, which is necessary if you transport it large distances, this type of thing. You know, those are the 

types of structural changes that we are seeing producers contemplate and in fact, actually implement in some cases where some 

cases the feeding of the livestock is moving, you know, to where the 

ethanol is being produced in order to get access to what is, you 

know, for some species, not all, but for some species, a fairly lowcost feed stock. 

Mr. KAGEN. But to have access to those distiller products, you 

have to be rather close, don’t you, within 150 miles? 

Mr. CONNER. Well, as has been advised to me, there are two 

forms of those dried distillers grains. There is the wet form, which 

is how they come out of the plant. Those products then can be 

dried, which obviously does add to the expense of the product, and 

then transport it much as you would regular feed at that point. 

Mr. KAGEN. And before I ask my other question, I want to make 

a comment or two that this morning I haven’t heard, I have read 


bajohnson on PROD1PC69 with HEARING
20 

all of the written remarks about the costs of doing business in agriculture, but no one mentioned healthcare and being a physician, I 

have got to tell you, everywhere I have been in my district, 

healthcare was number one. It is their number one expense. Energy and feed. So I would appreciate, in your other testimony, if 

you would include healthcare first because, unless we solve that 

national crisis, all our businesses, not just agriculture, are going to 

suffer. You also noted that there were high prices and a strong export market for many of our products, mostly livestock commodities. So what can the USDA do to help keep our export markets 

viable and competitive without any threat for collapse? 

Mr. CONNER. If I could, I will address your healthcare point first. 

I would refer you, Congressman, to some of the provisions dealing 

with rural healthcare in our farm bill. Over 1200 rural critical access hospitals that we are proposing to fully revitalize within the 

dollars that we have made available within our farm bill and we 

are very, very excited about that provision. We believe it really represents kind of a fundamental quality of life issue in rural America. 

You know, you obviously have to have access to critical healthcare 

facilities. Those hospitals have been designated. They just simply 

haven’t been upgraded at this point. We provide the resources to 

upgrade them and I believe we do have a number of those in your 

State as well, and again, a very important provision to us. In terms 

of your second question, and I apologize that I am forgetting what 

that question was. 

Mr. KAGEN. It had to do with what the USDA could do to help 

keep the export market stable and viable and competitive. 

Mr. CONNER. Absolutely. Well, let me just say, obviously, we continue to believe strongly in the export market. As I noted in my 

oral testimony, Congressman, the good news for the livestock sector 

really has been on the export front during this period, you know, 

while they are struggling with higher feed prices. Certainly our exports of a number of a different commodities has been very, very 

strong. I believe we will set another record, which I believe 17 

years running we have increased our level of pork exports. We will 

continue that trend this year with another remarkable growth in 

those exports. Broilers, again, have come back strong in terms of 

export activity. The beef situation, you know, we could talk about 

that a long time but we continue to plug away on that as well. So 

I think continue to do that, obviously the beef situation is critical 

to us in terms of moving those products and I think we need to just 

stay focused on that, whether it is the Koreans or the Japanese or 

whatever the case may be. 

Mr. KAGEN. Thank you very much. I yield back. 

Mr. BOSWELL. Well, that brings us to closure. I say this, Mr. Secretary, as you go away. Well, I appreciate you being here and obviously, we are going to have continuing dialogue. 

Mr. CONNER. Yes. 

Mr. BOSWELL. So we look forward to that and your quick response would be much appreciated. Chairman Peterson has said 

that he wants to have something on the table by August break, so 

let us move right along. We are going to have to work together and 

we look forward to your help and thank you for coming up today 


bajohnson on PROD1PC69 with HEARING
21 

and we will be in touch. So this will close the first panel. Again, 

thank you. 

Mr. CONNER. Thank you, Mr. Chairman. You will have our full 

cooperation and whatever you need from us now. 

Mr. BOSWELL. And I think just to get started right away, I noticed that you were here when we had the first panel, so that is 

good. That will save a little time and we will just start off with you 

Mr. Morales, for five minutes and we will go right down line and 

then we will go to questions in direct to all of you. So with that, 

welcome. We are very, very glad to have you here. 

STATEMENT OF ERNIE MORALES, MEMBER, NATIONAL 

CATTLEMEN’S ASSOCIATION, TEXAS CATTLE FEEDERS ASSOCIATION 

Mr. MORALES. Good morning. Mr. Chairman and members of the 

committee, my name is Ernie Morales. I am a rancher and a cattle 

feeder from Devine, Texas. I appreciate the opportunity to be here 

today and talk about high feed prices and the impact we are feeling 

in the cattle industry. 

Our industry is currently facing multiple feed pressures. Due to 

widespread drought, last year’s wildfires and the recent severe winter weather, we have seen our hay and forage supplies dwindle. 

From emergency grazing of CRP acres to hay hotlines, our industry 

has been working hard trying to find enough supply to meet our 

demand, because we have been forced to utilize lesser-quality forage as a result. We will continue to see high hay demand and 

prices as drought persists in other areas of the country, as we see 

some hay acres converted to corn. 

As with most of my counterparts who feed cattle, corn is our primary feed stock, accounting for about 80 of every 100 pounds of 

cattle feed. We will feed about two billion bushels of corn this year, 

out of nearly six billion bushels of feed to livestock. The livestock 

industry remains the largest consumer of corn by utilizing almost 

58 percent of the total corn used over the past decade. From the 

cattle feeder’s perspective, every $1 per bushel increase of corn 

means we must pay approximately $22 a hundred weight less for 

a 550 pound calf, just to have a chance to make the same income. 

For the cow-calf producer, that roughly is $121 per head reduction 

in price. So in reality, cattle feeders absorb a portion of the higher 

corn prices in the form of increased operating costs, and the cowcalf producer absorbs a portion in the form of reduced prices for the 

calves. 

From January 1 to February 16 of this year, the average Omaha 

cash corn price was $3.68 a bushel. The average price from the 

same time period last year was only $1.91 a bushel. This is over 

a 92 percent increase in just one year. This increase in corn has 

moved our cost of gains from an average of 55 cents a pound in 

2006 to 75 cents a pound in 2007. Analysts at Cattle-Fax predict 

that this number may even move into the 80s as corn demand increases. This is not a cost that the producer, nor I as a feeder, can 

pass along to consumers, because consumer demand for our beef is 

fairly inelastic. There is only so much the consumer is willing to 

pay before they begin to choose other protein options. This means 


bajohnson on PROD1PC69 with HEARING
22 

that, in the short run, the majority of these higher feed costs are 

borne by cattle feeders and cow-calf producers. 

So how is the cattle industry supposed to respond? One way is 

to look at alternative feed sources. Ethanol production results distillers grains as a co-product. These co-products can be used in our 

feed rations. In all of the livestock species, cattle are the ones that 

can best utilize these co-products. On the average, about 30 percent 

of cattle ration can be switched to these ethanol co-products. However, at these levels there is concern about cattle performance. The 

variability of the co-products has made it hard to get consistent 

product to blend into our feed. With increased input costs and the 

inherent risk of cattle feeding, the last thing we want to see is a 

cattle not eating and not gaining weight. 

I should also point out that, while wet distillers grains actually 

makes a better feed than dried distillers grains, a feedlot must be 

within 150 miles of the production source in order to manage or 

handle a wet co-product. Wet distillers are extremely hard to mechanically handle and are susceptible to spoilage. Dried distillers 

grains, or DDGs, are better to handle, but it is still hard to mechanically convey since it doesn’t flow through hoppers and equipment, like corn. 

NCBA supports our Nation’s commitment to reduce dependence 

on foreign energy by developing forms of renewable energy such as 

ethanol. We recognize that Federal support of this ethanol industry 

has been necessary to encourage development of basic production 

technology. However, we as cattlemen believe in a market-based 

economy and there is a concern amongst our industry about the influence of renewable energy policy on the price of feed stuff such 

as corn. This is why we support transition to a market-based approach for production and usage of ethanol produced from corn. 

NCBA supports allowing the existing blenders tax credit and ethanol import tariff to sunset as scheduled in 2010 and 2009, respectively. The Center for Agriculture and Rural Development at Iowa 

State University produced a comparison of corn prices with and 

without the blenders credit. At a price of $50 a barrel of oil, the 

price of corn in the credit was $2.67 a bushel. Without the credit, 

the price fell to $1.83 per bushel. We believe the U.S. beef industry 

can and will remain competitive as long as we have the ability to 

compete on a level playing field with the ethanol industry for that 

bushel of corn. 

Mr. Chairman, thank you for the opportunity to testify here 

today. Our industry looks forward to working with you and the 

committee in finding ways to develop renewable fuels that will not 

put an undue burden on any agriculture sector. Thank you. 

[The prepared statement of Mr. Morales appears at the conclusion of the hearing.] 

Mr. BOSWELL. Thank you for your comments. We will go to Mr. 

Wonderlich from Dairy Farmers of America, but before you start, 

though, Rob, I give my best to Corinna and Jacob and Rachael. 

Mr. WONDERLICH. Okay. Thank you. 

Mr. BOSWELL. And I am glad to have you here. 


bajohnson on PROD1PC69 with HEARING
23 

STATEMENT OF ROB WONDERLICH, DAIRY FARMERS OF 

AMERICA 

Mr. WONDERLICH. Thank you, Mr. Chairman and the rest of the 

committee. I am Rob Wonderlich, a dairy farmer from Ollie, Iowa. 

My wife, Corinna, and I operate a 270 cow dairy that produces 

more than 6.5 million pounds of milk annually, or 760,000 gallons. 

In addition, we farm 520 acres of cropland. We have been in the 

dairy business for 27 years. I serve on the board of directors of 

Dairy Farmers of America, a national milk marketing cooperative 

based on Kansas City, Missouri, with dairy farmer member-owners 

in 49 states. I also serve as a director on DFA’s Central Area Council. I appreciate the opportunity to testify today. 

Today, I am here before all of you to express my concerns about 

the effect of increased costs associated with dairy operations. Specifically, I will speak to you about increased feed and fuel costs and 

how these two items negatively impact, not only my operation, but 

the other 62,000 dairy farmers across the United States, even in 

North Carolina. 

As many of you are well aware, commodity grain prices, particularly corn, have dramatically increased over the past seven months 

to price levels not seen since the mid-1990s. Many economists are 

attributing this to a growing demand from the ethanol industry, 

which uses corn as its primary feed stock. While this is great for 

the U.S. grain farmers that have experienced several consecutive 

years of depressed prices, it is tragically affecting the financial viability of dairy farms. Feed costs are the greatest costs for most 

dairies and greatly impact farm finance. On my personal farm, I 

have calculated that the recent increase in grain prices has increased my cost of production by $1.90 per hundred weight. That 

is a 45 percent increase, which is extremely close to the U.S. average feed cost increase of $1.89 per hundred weight. I would like to 

note before proceeding, that on my operation I purchase only 50 

percent of my feed. Many other dairies, however, are extremely dependent and purchase feed from outside entities and are even more 

susceptible to increased feed costs. 

Increased operating costs are not the only factor of my profit 

equation that is being affected by higher feed costs. My farm revenues are being stressed as the value of bull calves born from my 

dairy cows has been drastically reduced by almost half. As bull 

calves require higher grain diets and typically require large quantities of corn in preparation for slaughter, the calves’ value has 

dropped due to calf feeders’ unwillingness to buy corn-hungry 

calves. Therefore my personal revenue from bull calves sales has 

declined by $100 per calf or a 50 percent decrease. 

Not only have feed costs been burdensome to dairy farm profit 

margins, but increased energy costs have been as well. Based on 

my farm’s financial reports, my energy costs have doubled since 

2004, which, on a hundred weight basis, is an operating cost increase of 40 to 50 cents per hundred weight. USDA reported a 

similar finding as the average energy increase. For a U.S. dairy, it 

has increased by 30 cents per hundred weight since 2004. 

Partially due to increased operating costs from feed and energy, 

the value of milk has started to increase after being substantially 

lower for the past 12 months. However, the gains in milk prices 


bajohnson on PROD1PC69 with HEARING
24 

have not fully offset the increased operating costs. According to 

USDA, the all milk priced received in Iowa during January 2007 

was $14.40 per hundred weight. That is $1.90 per hundred weight 

higher than June 2006. Of note, I would like to add that milk 

prices in June 2006 were not good prices for dairy farmers. The 

milk-feed ratio, which is a statistic that is the price of a hundred 

weight of milk divided by the price of a hundred weight of feed, for 

February 2007 shows a ratio of 2.32, the lowest since June of 2003. 

In June 2003, this ratio was higher due to an MLIC payment, 

which was not available in February 2007 because the milk price 

was too high. The increase in milk prices are returning me to average revenue. From 2003 through 2006, the average all milk price 

received in Iowa was $14.62 per hundred weight. The current milk 

price is just under the State’s average price receipt. As you can see, 

higher operating costs are strangling opportunities for my farm to 

produce a reasonable profit. And that does not only affect my farm, 

it is also affecting the 62,000 other dairy farms in the United 

States. 

In closing, ladies and gentlemen, I want to thank Chairman Boswell and the House Subcommittee on Livestock, Dairy and Poultry 

of the Committee on Agriculture for hearing my testimony. Despite 

any perception formulated from my comments today, I am a firm 

believer in renewable fuels derived from agricultural commodities. 

And further, I applaud the United States in trying to decrease its 

dependence on foreign oil. However, this biofuel revolution occurred 

very quickly and did not allow for farmers such as myself, and in 

the other various livestock industries, to properly adapt, which has 

sent a shockwave across the industries in the form of increased operating costs. Again, I thank each and every one of you for your 

time, and thank you again. 

[The prepared statement of Mr. Wonderlich appears at the conclusion of the hearing.] 

Mr. BOSWELL. Thank you for your testimony. We will now recognize Ms. Philippi from the Pork Producers. 

STATEMENT OF JOY PHILIPPI, IMMEDIATE PAST PRESIDENT, 

NATIONAL PORK PRODUCERS COUNCIL 

Ms. PHILIPPI. Chairman Boswell, Ranking Member Hayes and 

members of the committee, I am Joy Philippi. I am a pork producer 

from Bruning, Nebraska. I also have a row crop and as of last Saturday, I am the Immediate Past President of the National Pork 

Producers Council. We represent 44 affiliated States with 67,000 

producers. We also work very hard to make sure that we bring 

their issues to you in a manner that you will understand from the 

viewpoint of the producer. I would like to thank you for the opportunity to be here today and I applaud you for holding this hearing 

and I believe it is one of the top issues for us to be considering as 

we look at the farm bill. 

Economist Dan Otto and John Lawrence at Iowa State University estimate that our industry creates nearly 35,000 full-time jobs 

and is responsible for more than 500,000 other jobs, and all of 

these are in the rural areas. In 2005 the pork producers of this 

country marketed more 103 million hogs. That amounts to $34.5 

billion dollars that was contributed back into our U.S. economy. 


bajohnson on PROD1PC69 with HEARING
25 

Mr. Chairman, I want to be very clear. U.S. pork producers support 

the development and the use of alternative and renewable fuels as 

a way to reduce America’s dependence on foreign oil, but we continue to have the jitters over the rapid rise of corn ethanol production in our country. We have concerns about the availability to find 

corn to feed our pigs. 

In 2006 the United States produced approximately 10.75 billion 

bushels of corn. The entire livestock industry consumes more than 

six billion bushels of that. The pork industry uses just over one billion bushels of corn. Then nearly 1.5 billion bushels are processed 

for food and industrial uses. And about two billion bushels are exported. The ethanol industry in 2006 used close to two billion bushels, so you can understand why we have concerns about having 

corn available. And right now, this morning in Bruning, Nebraska, 

you cannot buy a bushel of corn at any price. It is not available. 

The ethanol industry is expected to use 2.75 billion bushels this 

year, and considering plants under construction and on the drawing board, former USDA Ag Economist Bill Tierney estimates that 

by 2010, it will use 10 billion bushels of corn. 

In addition to the corn availability issues, the current demand 

for corn already has resulted in higher corn prices. Right now, if 

you are going to buy corn, it is going to cost you $4 a bushel. A 

year ago now, it cost between $1.85 and $2 a bushel. That is almost 

double what we had to pay last year and it has doubled our cost 

of production, especially feed inputs from $35 a pig to $65 right 

now. The ethanol industry is growing because of the high price of 

crude oil, and with the blenders tax credit, it adds even more to 

the cost of that. The credit is equivalent to a $1.40 per bushel of 

corn and that also receives a 10 percent per gallon income tax credit, but when you add on other State and Federal incentives, it all 

adds up to about $2 a bushel. 

Now, certainly the pork industry will adjust to these changes in 

costs. We did it in the past and we will do it again. But according 

to Iowa State University Center for Ag and Rural Development, 

pork production will need to decline by 10 to 15 percent to allow 

the industry to recoup these higher prices. CARD also estimates 

that these higher production costs are going to result in a smaller 

livestock industry in the United States, higher retail prices and 

food price inflation. We must recognize that jobs in rural America 

may also be adversely affected. John Lawrence of Iowa State has 

calculated that a 100-million gallon ethanol plant creates about 80 

jobs. But if the bushels of corn required to produce that much ethanol are diverted from use in pork production, there will be 800 

jobs lost. 

It has been also suggested that corn availability problems are 

just irrelevant because of the distillers grains. As we told the Senate Ag Committee on January 10, distillers dried grains, or DDGs, 

are just not easily fed to pigs. And I am going to defer to Dr. 

Shurson to expound on that today. Most importantly, though, 

DDGs are so much more useful in beef and dairy rations than they 

are on our hog rations, that those industries will probably always 

be able to bid them away from us. 

Now as I said at the beginning of my testimony, U.S. pork producers do support alternative and renewable fuels, but we believe 


bajohnson on PROD1PC69 with HEARING
26 

our industry faces significant challenges because of the expansion 

of the corn ethanol industry. Given all of those challenges, last 

week at our annual meeting our producers set policy that we will 

use as we work to set policy with you on the energy issues. Our 

delegates supported allowing the sunsetting of the 51 cent ethanol 

blenders tax credit and of course the tariff. We also believe that if 

the tax credit has to be extended, that we should look at developing 

a countercyclical program, something that would make it work on 

a sliding scale with the oil price. They showed their support for renewable fuels by asking that we increase our use of biodiesel. And 

again, we are looking to the future and asking for incentives to figure out how we can use methane and digesting these things into 

fuel. One of the other things that they, and I believe it is a strong 

signal of our support for using renewable fuels, is that we use the 

CARD study that was mentioned earlier in our foundation. That 

gives some good data as to how this will affect us. 

As I sum up, I appreciate the fact that members of the committee 

have noticed that there is other issues in front of us, not just the 

renewable fuels issue. We look forward to working with you as we 

work to protect our domestic and global competitiveness. Mr. 

Chairman and members of the committee, we stand ready to work 

with you to craft a free market-based fuels policy that will protect 

the fuel, food and feed security of our country. I thank you again 

for the opportunity to be here today and I will answer any questions at the appropriate time. 

[The prepared statement of Ms. Philippi appears at the conclusion of the hearing.] 

Mr. BOSWELL. We thank you. And we do have a vote on, but I 

think that we can go to Mr. Seger and I don’t think I will have to 

interrupt you, but we would like to go ahead and take your testimony and then we will probably take a short recess. Mr. Seger. 

STATEMENT OF TED SEGER, FARBEST FOODS, INC. 

Mr. SEGER. Good morning, Chairman Boswell and Ranking Member Hayes. Thank you for the opportunity to testify today. My 

name is Ted Seger and I am president and part owner of Farbest 

Foods, Incorporated in Huntingburg, Indiana. Farbest soon will be 

the Nation’s fourth largest integrated turkey company, contracting 

with 150 producers and employment more than 700 people. We are 

involved in grain procurement, feed manufacturing, growing, processing and marketing of turkey meat around the world. I also serve 

as chairman of the National Turkey Federation, which represents 

all segments of the $8 billion U.S. turkey industry. 

Our industry has significant concerns about the growing impact 

of Federal renewable fuels policy on the demand for corn and soybeans. These two commodities account for nearly three fourths of 

a turkey’s daily feed ration. The price of corn has increased more 

than $2 per bushel in the last 12 months. Corn supplies are tightening and most new corn acres are expected to come at the expense 

of existing soybean acres. There have been many forecasts about 

the effects of ethanol production. In almost all cases, findings indicate the availability of feed grains will be limited tremendously 

over the next two to three years. USDA’s own forecast indicates 

that the corn stocks use ratio will fall below six percent in the 


bajohnson on PROD1PC69 with HEARING
27 

2007–2008 crop year. This is the lowest ratio since 1995–1996, 

when corn prices reached a record $5 per bushel. Turkey production fell by more than 10 percent and our industry consolidated significantly in that time. 

Our low ending stock is especially alarming, given three straight 

years of record corn production. More than one third of the cost of 

a tom turkey is generated by corn and soybean meal alone. Increasing corn and soybean meal and other feed ingredient prices from 

just one year ago has raised the feed cost per tom turkey by about 

eight cents per pound, a 35-percent increase. That equals $576 million more in feed costs on annual basis to the industry. Turkey 

companies will have to cover this increased cost through higher 

values for exports as well as domestic products. In the long run, 

this will mean higher food costs for consumers. Existing sales contract commitments have held prices down, shrinking turkey company profits to near zero and it is likely the industry will absorb 

losses in the short run. Eventually, though, high feed prices will result in a decrease in poultry and meat production. It also will result in food service and retail contracts that shift the cost burden 

to consumers. There are indications that this already is happening. 

The Consumer Price Index for food released in January showed an 

alarming 0.9 percent increase in one month alone, from December 

2006 to January 2007, for all food. 

The commodity grain market futures are trading today on the assumption that we will have the largest corn crop in history. Our 

industry’s concern is what happens if we produce 11 billion bushels 

instead of the 12.2 billion bushels projected? Keep in mind that 11 

billion bushels would still be the second largest crop ever, yet it 

would leave the balance sheet with negative carryover of more than 

200 million bushels. The current dilemma is that demand is far 

outstripping supply, and demand is continuing to grow rapidly. The 

Renewable Fuel Association reports today’s capacity at 5.6 billion 

gallons per year and almost certain to reach 11.8 billion gallons by 

2008. These plants will consume at least 3.9 to 4.2 billion bushels 

of corn for 2009. This is one billion bushels more than the 2008 

USDA projection of 3.2 billion bushels used for ethanol. Again, 

even with a best case scenario, two record crops in a row, we will 

still likely be in a deficit carryover situation. The reality for many 

turkey companies is that there is no economically feasible substitute for a grain-based diet. Feeding more wheat, barley, sorghum 

or soybean meal has no advantage because these products trade at 

energy equivalent values to corn. DDGs can only be used on a limited basis. Ten percent is about the maximum for turkeys. DDGs 

cannot replace corn on anything approaching a one-to-one basis. 

NTF’s first recommendation is to support the highest level of 

funding possible for all farms of cellulose-based research and full 

funding of already approved cellulose-based demonstration projects. 

As you write the farm bill and if the committee has input on the 

new energy bill, NTF has several other recommendations we believe will help speed energy independence and minimize the impact 

of a renewable fuels policy on poultry and meat producers. Our recommendations include providing maximum funding for research 

into ways corn yields can be increased; allowing farmers whose 

CRP contracts are close to expiring to opt out early with no penVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
28 

alty. This would be similar to the program implemented in 1996 

and 1997; eliminating the 51 cent per gallon blenders credit for 

ethanol, or at least indexing it to the price of oil; eliminating the 

54 cent per gallon duty on ethanol imported from the Caribbean, 

Central America and South America; promoting the production of 

a more consistent, higher quality DDG by ethanol plants. 

Thank you again for the opportunity to testify and I hope that 

I have been able to convey the impact on feed prices and food 

prices for you, and I will look forward to answering any questions. 

[The prepared statement of Mr. Seger appears at the conclusion 

of the hearing.] 

Mr. BOSWELL. Thank you very much. I am sorry that we have 

to interrupt now, but we do have two votes, so I will be back as 

quick as I can and ask for your indulgence and your patience and 

we will continue just as soon as we get back. So we will take a momentary recess. 

[Recess.] 

Mr. BOSWELL. Okay. Thank you very much for the interruption 

and we will continue on. Let us see. Mr. Seger, you had just finished, so we would like to go now to Mr. Herman. Thank you for 

being here. Five minutes, please. 

STATEMENT OF MATTHEW HERMAN, COMPLEX MANAGER, 

TYSON FOODS, BEHALF OF NATIONAL CHICKEN COUNCIL 

AND NORTH CAROLINA POULTRY FEDERATION 

Mr. HERMAN. Good afternoon, Chairman Boswell, Congressman 

Hayes and members of the subcommittee. On behalf of the National Chicken Council and the North Carolina Poultry Federation, 

I appreciate your invitation to provide the chicken industry’s comments on the impact of the new cost environment for feed grains 

and oilseeds. My name is Matthew Herman, Complex Manager for 

Tyson Foods in Monroe, North Carolina, which includes a slaughter 

plant, a hatchery and two other facilities. We contract with 190 

family farmers to grow our broilers, and 42 family farmers to 

produce our hatching eggs. Each week, my complex produces more 

than 1.3 million chickens or approximately eight million live 

pounds. 

In 2006, the industry nationwide produced almost 48.5 billion 

pounds live weight of chickens, using more than 53.5 million tons 

of feed. The industry purchased 1.3 billion bushels of corn to make 

this feed. Before the price of corn began to escalate rapidly in mid 

October, the average cost of feed was $139.20 per ton. Last month 

the same ton of feed cost 34 percent more, almost entirely because 

of the rising cost of corn. Last year the chicken industry’s total feed 

bill was $7.5 billion. This year the total feed cost to the chicken industry will very likely be over $10.5 billion, a 40-percent increase. 

Certain analysts have suggested that we have been here before. 

That is, animal agriculture has weathered high prices for feed 

grains and oilseeds in years past. In the past, however, this has 

been a short-term supply-driven problem. Today’s situation is demand-driven, with no end in sight. U.S. animal agriculture has not 

been here before. 

In response to an inquiry from the National Chicken Council this 

week, Dr. Bruce Babcock, Director of the Center for Agriculture 


bajohnson on PROD1PC69 with HEARING
29 

and Rural Development at Iowa State University, analyzed the impact of corn costs on the grower industry. He concluded that rising 

costs will result in a period of low or even no growth in poultry production, with rising prices at both the wholesale and retail levels. 

Dr. Babcock’s conclusion assumes a near-adequate supply of corn, 

but will there be a near-adequate supply of corn in the years 

ahead? 

Assuming average yields for the corn harvest in 2007 and 2008, 

21 million additional acres must be shifted to corn production over 

the next two years to meet the expected needs for food, fuel and 

export. Such a major shift is virtually impossible. We, as a Nation, 

need to decide the proper balance between grain for feed and food 

and grain for bioenergy. This is a discussion that is long overdue. 

Foremost in a national discussion on the issue is the need for a 

credible plan of action in the event of a significant shortfall in the 

corn crop. What happens if there are not enough acres shifted to 

corn and yields are measurably below the trend line? 

In addition, we need more focus on non-grain-based solutions and 

the contributions animal agriculture can make to energy independence. For example, animal fats are an excellent feed stock for 

emerging renewable diesel technologies. While animal agriculture 

is prepared to participate in the growth of renewable fuels in the 

United States, it is vital that these types of developing technologies 

be supported so that agriculture capabilities are more fully utilized. 

In addition to initiating a national discussion about the proper 

balance and pathway for the United States to move toward more 

energy independence, Congress can do several things to meet the 

needs for both food and fuel. Let me mention just two of them: permit non-environmentally sensitive cropland in USDA’s Conservation Reserve Program to be released without penalty and loss of 

program benefits; permit non-environmentally sensitive cropland in 

the Conservation Reserve Program to produce grain and oilseed 

crops if the harvest is designated for use to produce bioenergy. 

Achieving greater energy independence is a very worthy national 

goal that we all can support. Achieving that goal must be pursued 

in a reasonable, rational way. Moving forward at a measured pace 

that allows agriculture producers to adequately react to market signals and at a pace that minimizes disruptions to food production 

and consumption should be a priority. 

I would like to again thank the subcommittee for the opportunity 

to testify today. I would be happy to receive any questions. 

[The prepared statement of Mr. Herman appears at the conclusion of the hearing.] 

Mr. BOSWELL. Thank you very much. We appreciate your testimony and we will have questions. Mr. Truex, thank you for being 

here. We are looking forward to your testimony. 

STATEMENT OF RON TRUEX, PRESIDENT AND GENERAL MANAGER, CREIGHTON BROTHERS, LLC, ON BEHALF OF THE 

UNITED EGG PRODUCERS 

Mr. TRUEX. Good morning, Mr. Chairman and Mr. Hayes and 

members of the subcommittee. My name is Ron Truex and I am the 

President and General Manager of Creighton Brothers in Warsaw, 

Indiana. We are a midsized egg producing operation and employ 


bajohnson on PROD1PC69 with HEARING
30 

approximately 300 people in northern Indiana. I appreciate the opportunity to testify on behalf of the United Egg Producers. About 

90 percent of all the eggs in the United States are produced by 

UEP members. Thank you for holding this hearing. There is no 

doubt that ethanol is booming, but unfortunately, every boom has 

its downside. For people in the livestock and poultry sector, feed 

costs have risen dramatically and there are some very real consequences that Congress needs to consider. 

Ethanol and other biofuels will benefit the United States in 

many ways. By expanding our use of the renewable energy sources, 

we can reduce our dependence on imported oil and cut our overall 

use of fossil fuels. However, half of the U.S. farm economy is livestock, dairy and poultry, and anyone who must buy animal feed 

has been hurt by the dramatic increases in the cost of production. 

About 55 percent of the cost of producing a dozen eggs is feed. 

Sixty-three percent of a typical layer ration is corn. When corn 

prices are $4 a bushel, egg producers’ costs skyrocket. A typical 

Midwest egg operation saw feed increases per ton increase about 

58 percent from September of 2006 through the end of February 

2007. Feed went from $106 per ton for a layer ration in September 

to $168 per ton in February of this year. For my operation, the cost 

of feed in each dozen eggs increased from a range of approximately 

16 cents per dozen during most of 2006 to nearly 29 cents per 

dozen today, over a 10 cent per dozen increase. 

Of course, costs in other areas of the country are higher than in 

the Midwest. It is good to be from Indiana. Their grain transportation and other similar factors costs them more, so other regions 

of the United States have been hit even harder than producers in 

my area. USDA published long-term projections just two weeks ago 

that back up these numbers. The Department projects that not 

only was egg production unprofitable during 2006, which many of 

us can attest to, but according to the Department, egg producers 

will lose money in each of the next several years through 2009, 

largely because of higher feed costs. What will happen is producers 

sustain losses and are unable to continue their operations. In some 

cases, production will pass into stronger hands, meaning more consolidation. Midsized operations like mine will find it harder and 

harder to compete. In other cases, some production will may move 

outside the United States. In that case, the domestic demand base 

for U.S. feed grains and oilseeds will shrink. 

Mr. Chairman, I would like to conclude with several specific policy recommendations for your consideration. First, if Congress expands the Renewable Fuels Standard, the expansion should be limited to fuels that are made from non-corn feed stocks. Any increase 

in the RFS should focus on cellulosic feed stocks. And if this is not 

yet realistic, the RFS expansion should be delayed until it is. Second, Congress needs to ask whether the current 51 cent per gallon 

excise tax credit is really a necessary incentive when oil prices are 

high. Does ethanol really need the same level of support when oil 

is $60 per barrel as it did when oil was $30 per barrel? We suggest 

that Congress explore a countercyclical tax credit that is greater 

when oil prices are low, but less when oil prices are high. Third, 

Congress should encourage the Secretary of Agriculture to use his 

authorities to permit early release of some land in the ConservaVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
31 

tion Reserve Program. Internal USDA estimates suggest that several million acres could potentially be added to corn plantings in 

this way. Of course, the land needs to be selected in an environmentally responsible manner. Fourth, we encourage Congress to 

expand research in several areas: commercialization of technologies 

to make ethanol from cellulosic biomass; modification of DDGs to 

expand their potential use in non-ruminant rations; and the development of other renewable energy sources, such as power generation using manure and mortality. Fifth, we believe there should be 

greater parity of production incentives. Any tax credits or similar 

benefits available to ethanol or biodiesel should also be available 

for other sources of renewable fuels, including products of the livestock and poultry industries, like fats, tallow, waste and mortality. 

Mr. Chairman, I know the strong support of many members of 

this subcommittee are for renewable energy. I am also in favor of 

renewable energy, but I do not believe my industry should be sacrificed so we can mandate the next billion gallons of corn-based 

ethanol. Everyone says that the future of ethanol is in cellulose 

rather than starch. Our policies, including the Energy Title of the 

2007 Farm Bill, should reflect this commitment. We would like to 

work with you to make sure they do. Thank you very much. 

[The prepared statement of Mr. Truex appears at the conclusion 

of the hearing.] 

Mr. BOSWELL. Thank you very much. Dr. Shurson, we would like 

to hear from you at this time. Thank you for being here. 

STATEMENT OF GERALD SHURSON, PROFESSOR, DEPARTMENT OF ANIMAL SCIENCE, UNIVERSITY OF MINNESOTA 

Mr. SHURSON. Thank you very much. It is my pleasure. Chairman Boswell, ranking member, Mr. Hayes and other members of 

the subcommittee, I think the first point I would like to make, and 

I will be very brief and hopefully we will have some time for questions, is that we need to recognize that distillers byproducts are 

really an imperfect substitute for corn, no matter what livestock or 

poultry species we talk about. And so distillers byproducts can partially replace some of the corn, soybean meal, some of the inorganic 

phosphorus in our animal feeds, and as a researcher and educator, 

I guess our position has been, at the University of Minnesota, to 

really accept the fact that the ethanol industry is here to stay and 

we are going to have increasing amounts of these byproducts. And 

I guess, from our point of view, what we are trying to do is understand the benefits as well as the limitations so we know how to 

manage using these byproducts most effectively, where they have 

the greatest value in various animal species. 

I am really from a nutritional point of view, and a very simple 

way of thinking about things is that distillers byproducts are really 

nothing more than a package of nutrients, just like any other ingredient. But the economic value, the amount that we can feed the 

various animal species, as well as some of the benefits and limitations that are inherent with these byproducts, those vary depending on the type of animal that we are trying to feed. For example, 

and I think the reference has been made a couple of times here this 

morning, that these distillers byproducts, because of their proportions of nutrients and the form that these nutrients are in, are alVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
32 

ways going to be worth more in dairy cattle diets, followed by beef 

feedlot diets, then probably poultry diets, with swine diets probably 

having the most difficulty in being able to utilize the package of 

nutrients that DDGs or some of these byproducts provide. And so 

there are different abilities of different livestock commodity groups 

to pay more or less for some of these byproducts. 

And again, kind of focusing on what our research and educational program has been really about here over the last 10 years 

or so is really trying to understand some of the limitations and if 

we understand those, we can then begin to try to manage feeding 

programs around them. And again, I think, just to reiterate some 

points that other people have made this morning, variation in nutrient content and digestibility continues to be a big issue. Our 

ability to pellet diets, particularly for some of the swine integrators 

and some of the poultry integrators in the Southeast, is another 

limitation and one of the problems we run into is reductions in 

meal throughput, even fairly low inclusion rates in some of these 

monogastric diets. And clearly, some ethanol plants have issues 

with flowability, which has implications in terms of unloading it 

out trucks and railcars, and those are some issues that really need 

to be addressed to enhance utilization of these byproducts, especially the dried byproducts, more effectively here in the livestock 

industry. 

A couple of other specifics. One of the limitations is when we feed 

DDGs, or wet distillers grains, to lactating dairy cows, one of the 

problems that we could run into at inclusion rates greater than 20 

percent is a depression in milk fat. And maybe some of the newer 

fractionated byproducts coming on the market that are lower in fat 

will allow us to go to higher inclusion rates, which would be a good 

thing, but we need to learn more about some of these feeding applications as this growing number of new variations of distillers byproducts continue to evolve. 

We are also feeding quite a bit of it in dairy cow rations as well 

as beef feedlot rations, but one of the things we have to recognize 

from a broader perspective is that this ingredient is going in as primarily an energy source and by treating it strictly kind of as an 

energy source. We end up overfeeding protein or nitrogen as well 

as phosphorus, and certainly that has implications in terms of manure management plans and dealing with nitrogen and phosphorus 

excretion in manure, particularly as we move as an industry toward phosphorus-based manure standards. Amino acid balance. 

That is an issue for swine and poultry. Corn is not a very highquality protein source, relative to the amino acids that make up 

protein, and that is a limitation as well. 

On the pork side, which is an area that I am probably most familiar with, because that is what I specialize in, we are currently 

doing some research right now trying to understand how we can 

manage some of the potential negative impacts that feeding a high 

corn oil-based byproduct, like DDGs, might have on pork fat quality. And probably one of the hottest topics right now that I know 

FDA is addressing to some extent, and other feed industry groups, 

is this issue about the potential for antimicrobial residues, knowing 

that myosin, penicillin in particular, are a couple of those that are 

used fairly regularly in the ethanol industry to control bacterial inVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
33 

fections during fermentation. And at this point, there really aren’t 

any significant amounts that are causing issues that we know of, 

but certainly some more surveillance and research is needed to 

verify that some of these production issues are not a major concern 

for food animal production. 

And so again, kind of just to summarize here a little bit, we do 

need to continue working on understanding some of the different 

nutritional attributes of this ingredient. There are some very positive benefits that our research has identified, not only in swine 

feeding applications, but certainly other research groups around 

the country that have been working closely with this byproduct 

have also been able to identify, and by overcoming some of those 

limitations, clearly, we will be able to move more of this set of byproducts into greater usage rates in livestock feeds. 

I think one of the real key questions, though, that we are dealing 

with is, will the rate of increased distillers grains use in various 

sectors of the livestock and poultry industry keep up with the rate 

of increased production? And I think a lot of that really depends 

on how good a job some of us at land grant universities do in terms 

of conducting research on relevant topics, relevant issues and how 

well we do in terms of educating end users, as far as how to use 

these byproducts most effectively. One of the approaches that we 

have done at the University of Minnesota is to create a website exclusively devoted toward sharing relevant, practical scientific-based 

information on feeding applications of distillers byproducts to the 

feed industry, the livestock and poultry industry and I am proud 

to say that, in the last four years, that website has had over a million hits, which tells me that there is a lot of interest out there and 

hopefully the information we are providing is benefiting people. 

And clearly, more efforts are needed along those lines as well, because, quite frankly, for a lot of States, a lot of producers around 

the country in maybe non-traditional corn producing areas, this becomes a little bit of an issue. 

I am going to stop there and just thank you for the opportunity 

to be here today and I look forward to any questions you may have. 

[The prepared statement of Mr. Shurson appears at the conclusion of the hearing.] 

Mr. BOSWELL. Well, thank you very much. A few questions and 

I think we will have plenty of time, but I don’t want to drag this 

out too long because of the time of day. But back to you, Mr. Morales. I think you said in your statement that, in fact, wet distillers 

grain is actually a better feed than dry? 

Mr. MORALES. Yes, sir. 

Mr. BOSWELL. But your feedlot has to be within a close proximity 

of the availability of that? 

Mr. MORALES. That is correct. 

Mr. BOSWELL. And it is more of a statement and I am not here 

to quarrel with you about it, but in my district, I drive through 

Eddyville frequently and see what is going on there and I kind of 

stop and check on them once in a while, the big plant there and 

all of the stuff coming out of there, and I think they are up to like 

four railcars that will take the wet distillers grain all the way to 

Amarillo. And so I believe that they have got four cars in action 


bajohnson on PROD1PC69 with HEARING
34 

already. I don’t know if they are going to do more. Are you aware 

of that? 

Mr. MORALES. Are those specifically wet distillers grains from 

ethanol plants, or could that be—and maybe, doctor, you could help 

me with that. That could be a byproduct that we use, called corn 

gluten. It is? 

Mr. BOSWELL. Okay. 

Mr. MORALES. And corn gluten is used very limited in our Nation. We can only use up to 10 percent of corn gluten. But that is 

not the same thing as what we are talking about as wet distillers 

grain. 

Mr. BOSWELL. That is different. 

Mr. MORALES. Yes, sir, that is correct. 

Mr. BOSWELL. That is a good clarification on that. Okay. I appreciate that. Mr. Wonderlich, milk prices increased recently. What 

caused that? 

Mr. WONDERLICH. We have had several things that have helped 

to increase the price of milk that the farmers are receiving. Some 

of the things, we have an organization called National Milk Producers Federation and we have had a self-help program that we 

initiated, called Cooperatives Working Together, or CWT. For this 

program, it is self-funded by the dairy farmers and we have used 

monies collected from the dairy farmers at five cents a hundred 

weight, and now up to 10 cents a hundred weight, and used that 

money to help to export cheese. We have also had herd retirement 

programs, which we are having another herd retirement program 

coming up, where we will pay farmers, based on their previous 

year’s milk production, so much. They have to bid into the program 

at a hundred weight basis what they would take to exit the business. They could also, again, resume being a milk producer after 

those cows have been shipped to slaughter. 

Another thing that has helped significantly is the price of whey 

on the international market, and other dairy proteins. There has 

been a strong demand from the international community for U.S. 

diary products, especially the whey and protein ingredients. These 

have significantly impacted the price of milk over the last several 

months and helped to bring it up. Also, on the future market, speculators are looking at the corn prices and contemplating what that 

is going to do to the dairy sector over time, and in the futures market, they are responding on down the line with higher prices yet 

for dairy commodities, but we have to get to that point. We, in the 

dairy industry, have had the year of 2006 as a relatively low-priced 

year and now with the advent of the high feed costs, it is negatively impacting our operation. The Deputy Secretary for Agriculture stated that the USDA looks for the milk price to increase 

by 15 percent over this coming year of 2007, while at the same 

time our feed costs are increasing in the 40 to 50 percent range. 

Mr. BOSWELL. Thank you very much. I may have another question for you, but I am going to stay by own rules here. But I want 

to ask Ms. Philippi, sometime we are a victim of what we read and 

you can’t always believe everything you read. We all know that. 

But nevertheless, I am going to pose this question. The article on 

feed stuff recently, a writer by the name of Scott Tapper, with the 

Iowa pork producers, said that ‘‘good producers will still make 


bajohnson on PROD1PC69 with HEARING
35 

money, even with higher corn prices. We will have to cut back on 

the market weights of our hogs and start using more dried distillers grains.’’ Would you please respond to that statement? And 

would you say it is accurate, or whatever comments you might 

make. And I realize that you have got to have the corn. You already told me that a little while ago. 

Ms. PHILIPPI. Right, right. 

Mr. BOSWELL. But you got to be able to find it and I understand, 

out in your territory, there is none available. I understand that. 

But set that aside and respond, please. 

Ms. PHILIPPI. Okay. I think the issue that we see, and you bring 

up a good one, you know, if we can’t make any money at it, we are 

not going to stay in the business. The other thing is, if it isn’t fair, 

they are not going to stay in the business. And I spoke with one 

of the Iowa folks at their annual meeting, where we talked a lot 

of about, you know, how do we keep this thing in a balance out 

there, because they like ethanol and all of these things. Yet, they 

laid it out pretty clearly that if we can’t find corn, we can’t raise 

pigs. And if we can’t raise pigs, that is not good for ethanol, either. 

Mr. BOSWELL. Well, I understand that and I appreciate you taking that position, but getting back to this statement. Some of you 

didn’t have the drought conditions and corn was available at the 

price. Is he making an accurate statement or not, in your opinion? 

Ms. PHILIPPI. Yes. 

Mr. BOSWELL. You think it is accurate? You can still make a 

profit? 

Ms. PHILIPPI. Would you repeat? 

Mr. BOSWELL. Yes, sure. I am just referring to the article on feed 

stuffs by Scott Tapper, I believe it is. His statement was ‘‘ good producers will still make money, even with higher corn prices. We will 

have to cut back on the market weights of our hogs and start using 

more dried distillers grains.’’ And that was his statement. What is 

your response to that? 

Ms. PHILIPPI. Well, we can always adapt to different corn prices. 

The retailers got to be involved in helping us get more for that. But 

the next two years are going to be tough because we weren’t prepared for it. And you know, like, it took $15,000 more per 2,000 

head, just to produce the last pigs that we put out. So you know, 

you got to have those things. You got to work it into it. A year from 

now it will be easier than it was now. 

Mr. BOSWELL. Okay. Mr. Hayes. 

Mr. HAYES. Thank you, sir. And again, thanks to all of you for 

being here. And believe me, it makes a difference to have you all 

here getting this information out, particularly your personal experiences. Mr. Herman, North Carolina is a corn deficit State. You 

talked in today’s testimony about the 40 percent increase. What, if 

anything, is the poultry industry considering as an alternative, and 

are there viable alternatives at this point in time? 

Mr. HERMAN. Yes, there are. I guess, as a company, at Tyson, we 

have established a renewable energy program or division, currently 

exploring the use of animal fats for alternative fuels. Also, I guess 

DDGs are not used in chicken rations currently, due to their high 

fiber content. But if we had research to help single-stomach animals such as chickens, that would be very helpful for us. 


bajohnson on PROD1PC69 with HEARING
36 

Mr. HAYES. But no real alternatives for feed at the moment that 

would take the place of corn? 

Mr. HERMAN. No, sir. 

Mr. HAYES. People are concerned about corn prices adding to the 

cost of our exports. It makes us less competitive with Brazil. Has 

this trend begun or is it something that is coming? What is the status on pricing poultry? 

Mr. HERMAN. Congressman, I am not sure exactly. I will have to 

look——

Mr. HAYES. Okay. Mr. Seger. 

Mr. SEGER. If you will, I can take a shot at that one. 

Mr. HAYES. Sure. 

Mr. SEGER. Because we are into marketing all across the world. 

And I will speak for turkey right now and I think that chicken leg 

quarters are in a similar position today, exports right now for turkey and chicken. In 2006, export markets, we exported just a little 

bit less than we did in 2005, but the value of those exports were 

up just a little bit, so it offset some of the increased cost, but a 

small portion. Today, the situation is, in Turkey, for example, we 

export and our primary export is Mexico and our prices of turkey 

drumsticks and turkey thigh meat are relatively high. And I can 

tell you, though, that as we sit here and speak, there is a very 

large resistance from Mexico to continue to purchase turkey drumstick meat from us right now. I know leg quarters are 45 cents a 

pound, I believe, and that is obviously their largest export market, 

but I can’t tell you how that reaction is today. But I think, over 

time, as I said in my remarks, that we will lose export markets as 

an industry, if we continue to try to raise those, as I put it, our 

dark meat values too much. We can push it to a certain limit, but 

after that, then they will start switching to other alternatives, assuming that they have other alternatives. 

Mr. HAYES. Thank you, sir. Dr. Shurson, you talked about DDGs 

and if you were a poultry or hog producer right now, pork or poultry, would you use DDGs to feed your stock? 

Mr. SHURSON. The quick answer is yes and it is being used. 

Mr. HAYES. Good. How are we doing with the whole idea of using 

excess animal nutrients and methane for energy? What is happening there? Anything good to report today? Either or both of you. 

Mr. SHURSON. Well, I can just comment that there is a growing 

interest in using methane as an energy source, or collecting methane. Economics, some of the technologies still need further development. We are in the process at the University of Minnesota-St. 

Paul campus of looking at that issue, methane generation, very 

closely. In terms of excess nutrients generated by feeding distillers 

byproducts, one of the things you can argue is a benefit in swine 

and poultry diets is that, when we run corn through an ethanol 

plant, we take a fairly low-digestible level of phosphorus in corn 

and make it very highly digestible. That is good news, because now 

we can start taking some of the inorganic phosphate out of our 

diet, which is a fairly expensive nutrient that we have to supplement anyway, and we can actually minimize excretion of phosphorus by using distillers grains, particularly if we throw in the enzyme, phytase. So on the monogastric side, distillers grains has a 

benefit in terms of phosphorus excretion. We still have problems 


bajohnson on PROD1PC69 with HEARING
37 

with excess nitrogen coming out. Hopefully that kind of answers 

your question. 

Mr. HAYES. Very good. Thank you. 

Mr. BOSWELL. Mr. Smith, please. 

Mr. SMITH. Thank you, Mr. Chairman, and thank you for all of 

your testimony today. I think it highlights the fact that we have 

a very stable industry and I hope we can keep it that way. And 

I also appreciate, I think, a high level of feedback from you that 

is not a bunch of finger pointing and obviously you recognize the 

fact that there are some pretty excited corn growers around the 

country and they have paid a price over the years as well. If anyone would choose to briefly highlight perhaps the dialogue, the 

interactivity with the corn growers, perhaps, whether it is planning 

ahead, what can we expect from this point forward, maybe a brief 

history on the relationship, but certainly I appreciate the testimony 

to date. And perhaps if anyone would choose to elaborate? Ms. Philippi. 

Ms. PHILIPPI. I guess I will start out with that one. We have had 

ongoing dialogue with the corn growers, because the majority of our 

members are diversified and they have asked us to do that. We try 

to make sure they understand what we are doing and we want to 

know what they could do and how they can help us as well. We 

just recently, Monday, I spoke with their chairman and we talked 

about the policies we passed, the policies they passed, and then 

how we can work together on many other issues. 

Mr. SMITH. Okay. Thank you. And then, obviously, from your testimony, I think you pointed out that, livestock is still a much larger 

consumer of corn and we don’t want to jeopardize that. The next 

question that I have is, and I hear about the promise, perhaps, if 

that is the correct description, of biodiesel and the future that biodiesel has, might we find ourselves in a similar situation with a 

similar growth, perhaps, in the future of biodiesel? 

Mr. WONDERLICH. Maybe I will take a stab at that. I think you 

are correct in that assumption, but also the fact that the increase 

in the corn acres that we are going to see this year, that is already 

going to negatively impact, for livestock producers, the price of soybeans and soybean meal mixture. Another area of concern for cattle 

producers and dairy producers is there will be probably large numbers of acres of alfalfa and hay ground that will come out of that 

type of production and go into corn production. But I think it is 

going to have a revolving effect that we are going to see from this 

whole thing, this whole biofuel revolution. 

Mr. SMITH. Okay. Thank you. And I yield back the balance of my 

time. Thank you. 

Mr. BOSWELL. Thank you very much. I am wondering, Mr. Truex, 

do you know Mr. Van Zenten from out——

Mr. TRUEX. Yes, I do. 

Mr. BOSWELL. Well, give him my regards and since I have known 

him for a number of years and tell him I expect to hear from him. 

Mr. TRUEX. I will do that. 

Mr. BOSWELL. On this matter. 

Mr. TRUEX. Okay, I will tell him. 

Mr. BOSWELL. And I appreciate that very much. And I just have 

to talk about all of you, whether you are coming in forthrightness. 


bajohnson on PROD1PC69 with HEARING
38 

I think you presented us more problems than you have solutions, 

but this is the beginning and I appreciate that and it is going to 

be interesting to see, as the news reports, your suggestions to stop 

the subsidies and open up the foreign market. It will be interesting 

how that is responded to as we go out across the country. So we 

will let that play its way out. But I just feel like we have done a 

good thing here today, because I have learned and I think you 

have. I think you agree with me, the man from Nebraska. And Mr. 

Hayes said to be sure and tell you this, as he went to another committee. They are doing a markup, I believe, on armed forces, which 

of course we all heard about. But I want to thank you for your time 

and I know we have heard a lot of information. I believe that the 

committee gained some knowledge here today and that is what we 

are all about, and hopefully some possible avenues where we can 

go forward. We will continue to look for more and I want you to 

consider this is an open invitation to keep this communication 

channel open and let us keep going there. 

I think we have heard today discussions from our researcher, a 

professor and some of you, that there is a lot being done on trying 

to assist us in how to use the distillers grains better. I want to help 

myself and the rest of our producers to be able to meet these demands and I think we can and I have a lot of hope that we will. 

I would guess that those of you are direct producers sitting out 

there, and I know some of you are, if not all of you, that you must 

be an eternal optimist or you wouldn’t be doing what you are doing. 

So I feel the same way. So I am going to pledge to you today that 

we are going to keep the communication channel open and we want 

to hear from you and we will continue to work with you and hopefully, again, we will have solutions to these challenges before us. 

But it is truly a new era in agriculture and I am very excited about 

being part of it and I hope you are too. We have got challenges? 

Yes, we talked about that in the beginning. But together we can 

work our way through it and we are going to be okay. 

So I am going to call this meeting to a close, unless there is anybody on the panel who wants to make one last comment. I will give 

you this opportunity. I see that Bob has got something that he 

wants to say and I welcome him to say it. 

Mr. WONDERLICH. Well, I would just like to mention about much 

has been said about DDG, and in the dairy business, it is my experience that if I feed more than seven or eight percent of that in my 

diet to my dairy cows, that we have a decrease fat production. 

Mr. BOSWELL. Say again the percentage. 

Mr. WONDERLICH. If I feed more than seven to eight percent of 

DDG in my dairy rations, that it negatively impacts the fat production of my dairy cows. And also the fact that the price of DDG has 

gone up dramatically too. It is not a bargain to be feeding that. I 

purchased last year, FOB from the ethanol plant, DDG for $75 per 

ton. That price has since risen into the $140 to $150 range. So it 

has gone up, percentage-wise, basically like the corn price has. 

Mr. BOSWELL. Well, I appreciate that and thank you for sharing 

that information. I think everybody you are telling that is at your 

kitchen table, but I appreciate that very much and I think the rest 

of us need to understand that, that just to feed more doesn’t necVerDate Aug 31 2005 07:03 Oct 05, 2007 Jkt 036240 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 E:\HR\OC\A240.XXX A240

bajohnson on PROD1PC69 with HEARING
39 

essarily solve it, particularly in the area where it is an influence 

on the fat and so on. 

All right, under the rules of the committee, the record of today’s 

hearing will remain open for 10 days to receive additional material 

and supplementary written responses from witnesses to any question posed by a member of the panel. The hearing of the Subcommittee on Livestock, Dairy and Poultry is adjourned and I 

thank you very much. 

[Whereupon, at 12:44 p.m., the subcommittee was adjourned.] 


bajohnson on PROD1PC69 with HEARING
40 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 111 36240A.001
41 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 112 36240A.002
42 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 113 36240A.003
43 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 114 36240A.004
44 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 115 36240A.005
45 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 116 36240A.006
46 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 117 36240A.007
47 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 118 36240A.008
48 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 119 36240A.009
49 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 120 36240A.010
50 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 121 36240A.011
51 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 122 36240A.012
52 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 123 36240A.013
53 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 124 36240A.014
54 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 125 36240A.015
55 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 126 36240A.016
56 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 127 36240A.017
57 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 128 36240A.018
58 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 129 36240A.019
59 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 130 36240A.020
60 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 131 36240A.021
61 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 132 36240A.022
62 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 133 36240A.023
63 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 134 36240A.024
64 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 135 36240A.025
65 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 136 36240A.026
66 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 137 36240A.027
67 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 138 36240A.028
68 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 139 36240A.029
69 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 140 36240A.030
70 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 141 36240A.031
71 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 142 36240A.032
72 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 143 36240A.033
73 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 144 36240A.034
74 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 145 36240A.035
75 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 146 36240A.036
76 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 147 36240A.037
77 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 148 36240A.038
78 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 149 36240A.039
79 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 150 36240A.040
80 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 151 36240A.041
81 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 152 36240A.042
82 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 153 36240A.043
83 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 154 36240A.044
84 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 155 36240A.045
85 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 156 36240A.046
86 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 157 36240A.047
87 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 158 36240A.048
88 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 159 36240A.049
89 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 160 36240A.050
90 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 161 36240A.051
91 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 162 36240A.052
92 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 163 36240A.053
93 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 164 36240A.054
94 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 165 36240A.055
95 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 166 36240A.056
96 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 167 36240A.057
97 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 168 36240A.058
98 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 169 36240A.059
99 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 170 36240A.060
100 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 171 36240A.061
101 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 172 36240A.062
102 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 173 36240A.063
103 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 174 36240A.064
104 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 175 36240A.065
105 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 176 36240A.066
106 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 177 36240A.067
107 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 178 36240A.068
108 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 179 36240A.069
109 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 180 36240A.070
110 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 181 36240A.071
111 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 182 36240A.072
112 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 183 36240A.073
113 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 184 36240A.074
114 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 185 36240A.075
115 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 186 36240A.076
116 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 187 36240A.077
117 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 188 36240A.078
118 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 189 36240A.079
119 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 190 36240A.080
120 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 191 36240A.081
121 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 192 36240A.082
122 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 193 36240A.083
123 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 194 36240A.084
124 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 195 36240A.085
125 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 196 36240A.086
126 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 197 36240A.087
127 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 198 36240A.088
128 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 199 36240A.089
129 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 200 36240A.090
130 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 201 36240A.091
131 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 202 36240A.092
132 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 203 36240A.093
133 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 204 36240A.094
134 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 205 36240A.095
135 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 206 36240A.096
136 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 207 36240A.097
137 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 208 36240A.098
138 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 209 36240A.099
139 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 210 36240A.100
140 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 211 36240A.101
141 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 212 36240A.102
142 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 213 36240A.103
143 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 214 36240A.104
144 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 215 36240A.105
145 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 216 36240A.106
146 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 217 36240A.107
147 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 218 36240A.108
148 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 219 36240A.109
149 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 220 36240A.110
150 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 221 36240A.111
151 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 222 36240A.112
152 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 223 36240A.113
153 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 224 36240A.114
154 


bajohnson on PROD1PC69 with HEARINGInsert graphic folio 225 36240A.115