Interview: Government policy top concern for U.S. cattle leader

SAN ANTONIO Thu Jan 28, 2010 4:16pm EST

SAN ANTONIO (Reuters) - Combating government regulations that could raise costs for already struggling U.S. cattle producers will be the top priority of the next president of the nation's largest cattle group.

Cattle producers have been losing money for nearly two years and some may go out of business, but Steve Foglesong, who is set to become the next president of National Cattlemen's Beef Association, said government policies on ethanol use and climate change could pose more serious problems for the industry.

"We have to make it governmental policy," Foglesong told Reuters, pegging down the NCBA's top priority. "If we are regulated out of business, the economy and demand will not make any difference."

The Environmental Protection Agency is considering allowing gasoline to contain 15 percent ethanol, up from the current blend of 10 percent.

Ethanol is mainly made from corn and such an increase could drive up corn prices and feed costs for livestock producers, he said.

"That extra 5 percent on the ethanol equals the same amount of corn that the entire U.S. cattle herd eats in a year," said Foglesong. "We need to have some common sense put in. Put some science behind it."

Foglesong spoke on the sidelines of the NCBA's annual convention under way in San Antonio, Texas. NCBA is the largest U.S. cattle group and for the past two years, members have lost money first due to high feed costs and later due to the recession, which slowed beef sales.

High feed costs in 2008, when corn topped $7 a bushel, were blamed in part on more of the grain going to make ethanol. Cattle producers worry corn prices could spike higher if the EPA's 15 percent proposal is implemented.

Foglesong is also concerned that an EPA threat to regulate carbon emissions if Congress fails to pass a new climate change law. Regulations could go forward as early as March, but opponents including the NCBA have already launched lawsuits.

Farm groups worry the EPA regulations would raise their costs. Climate change measures before Congress could also affect cropping patterns and feed grain production.

A U.S. Agriculture Department study says up to 8 percent of crop and pasture land, or 59 million acres (24 million hectares), would be converted to woodlands by 2050 because carbon-capturing trees would be more profitable than crops.

(Reporting by Bob Burgdorfer; Editing by Marguerita Choy)