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WASHINGTON, D.C. -- The ethanol boom is expected to result in retail price increases for red meat, poultry, and eggs that will exceed the general inflation rate in 2008-10 as the livestock sector struggles to adjust to higher feed costs, according to the most recent data released by the United States Department of Agriculture’s Economic Research Service.
The exact effects of higher corn prices will vary across livestock species, due to differences in feed conversion efficiencies and constraints on some animals’ ability to use distillers’ grains in rations, according to the ERS.
According to USDA projections, based on the different uses among the livestock species and a number of other important underlying assumptions, each bushel of corn used to produce ethanol results, on aggregate, in a reduction of about a fifth of a bushel of direct corn feeding, due to the use of distillers’ grains in rations.
However, the substitution of distillers’ grains in feed rations is expected to bring only a small reduction in soybean meal use. Beef cattle are assumed to be the largest users of distillers’ grains, and beef cattle rations typically use urea as the protein source rather than soybean meal.