Agriculture Secretary Tom Vilsack told lawmakers Thursday “the livestock and dairy industries could face financial pressures in 2011 and bear watching.”

Vilsack cited soaring price of feed and other input costs, according to the Des Moines Register. He did not offer those industries any relief although he said the department expects corn acreage to increase by 3 percent to 5 percent this year.

Groups representing livestock producers are pressing Congress to roll back incentives for using corn to make fuel ethanol, but Vilsack, a former Iowa governor, is a staunch advocate for the biofuel industry. Both at the Senate hearing and during an earlier appearance in the House, Vilsack warned against cutting off subsidies for ethanol. Economists say the ethanol producers are far less dependent on federal subsidies than biodiesel makers are.

Republican Sen. Mike Johanns, whose state of Nebraska is one of the largest producers of cattle and beef as well as ethanol, expressed concern about the adequacy of U.S. grain reserves, which are at their lowest levels  since 1995. There is “virtually no carryover, probably not  enough to keep the pipeline going,” he told Vilsack.

Johanns, who had Vilsack’s job during George W. Bush’s administration, asked Vilsack what would happen if there are significant weather-related crop failures.

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Source: Des Moines Register