The Australian Lot Feeders’ Association (ALFA) and Federal MP Bob Katter have locked horns over ethanol mandates.

The Federal Member for the northern Queensland seat of Kennedy yesterday issued a press release claiming that a campaign by lot feeders in opposition to the imposition of an ethanol mandate in Australia was orchestrated by major oil companies.

ALFA has fired back today with its own statement labelling Mr Katter’s remarks as both “incorrect and inflammatory”.

Mr Katter yesterday accused the Australian Lot Feeders Association of being a mouthpiece for oil companies in its opposition to the ethanol mandate.

“Oil companies are pathologically opposed to ethanol and they have certain mouth pieces, one of those being the Lot Feeders Association” Mr Katter said.

“The Lot Feeders Association will say that the grain used for producing ethanol should be going to feed cattle, which is their first lie, in fact the vast bulk of our grain produced in Australia goes overseas.

“The real story is that they’re squealing because ethanol will hit the lot feeders in two ways.

“One, it will put the price of grain up, but for every lot feeding business where most of them are foreign corporates anyway, there will be 1,000 Australian grain farmers who will benefit.

“Second, it gives the cattle industry super cheap and infinitely more nutritious dry distiller’s grain (DDG), the by-product in ethanol production, which enables cattlemen to lot feed on the farm in times of drought as DDB is far more compressed than other feeds and very cheap to transport.

“So the very reasons that the lot feeders are squealing are the very reasons ethanol and its by-products are vital to our country.

“The grain industry needs a 13-16 percent price benefit to be viable.

“The cattle industry needs compressed nutrition and therefore cheap transportation from DDG for their survival.

“And if this comes at the expense of a few foreign owned lot feeders that stand to lose a few bucks, then I won’t be crying any tears.”

His comments have prompted an angry response from ALFA.

“It is clear through Mr Katter’s flawed and naive public comments that he is attempting to divert attention away from the core issues with ethanol mandates i.e. that they increase food and fuel prices, they support some agricultural sectors at the expense of others, they impose costs that outweigh any benefit, and that ethanol producers are uneconomic without such a policy,” ALFA president Don Mackay said.

“Any insinuation that the feedlot industry and other ‘Against ethanol mandate alliance’ members are somehow in bed with big oil companies is not only ludicrous but comical.”

“ALFA has never suggested that the feedlot sector consumes the majority of Australia’s grain production.  Our concern with ethanol mandates relates particularly to low grain production years when the inflexible demand imposed by mandates remove a considerable portion of the Qld grain crop leaving beef, chicken, pork, egg and dairy producers to pay an artificially higher grain price.”

“With 57% of Queensland’s current ethanol production derived from grain, a repeat of the 2002/03 drought under a 10% ethanol mandate (as Katter proposes) for example, will lead to a Government imposed 50% increase in demand and 22% increase in the price of sorghum.”

“Importantly, intensive livestock industries are happy to compete with the ethanol sector for grain.  However, such competition should be on a level playing field.  Accordingly, we are staunchly opposed to Government intervention via mandates as this imposes artificial inflationary pressure on grain prices.”

“Katter is also wrong regarding the level of foreign ownership in the Australian feedlot sector.  98% of feedlots and 78% of feedlot capacity in the country is owned by Australian farming families.  Similar figures apply for other intensive livestock industries which are all backed up by numerous Government reports.”

“What Katter fails to understand is that while an ethanol mandate may assist grain producers, it will do so at the expense of other agricultural producers, many of which reside in Katter United Party electorates.  As grain is the highest cost in a kilogram of beef, pork, dairy and chicken, higher grain prices will negatively affect these sectors.”

“Feedlots purchase millions of grass fed cattle each year.  Any Government intervention which distorts markets and leads to higher costs of production will only reduce feedlot cattle numbers at the expense of such cattle producers and the whole beef supply chain.  With 80% of Qld in drought and El Nino set to exacerbate such impacts, the last thing the beef industry needs is negative unintended consequences from ethanol mandates.”

“Katter has also got his facts wrong regarding the by-product of ethanol production, distiller’s grain.   The Dalby biorefinery actually produces wet not dry distillers grain, a product which is 65% water and less energy than grain.  Given its moisture content, it has a short shelf life and is more difficult and expensive to transport, handle and mix.”

“Whilst we all would love higher prices, no industry should have a Government imposed demand for its product, particularly given the array of issues associated with such a policy.”