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Cheap US Biofuels May Lead to Beer, Meat Shortages in UK
The closure of the Vivergo Fuels and Ensus ethanol plants in the UK is imminent due to a recent trade agreement that removed tariffs on American ethanol imports. This shift has led to fears of significant repercussions for the UK’s ethanol industry and broader economic impact across various sectors, particularly meat processing and beverage production. These American biofuels, supported by genetic advancements and government subsidies, overshadow UK production capabilities, which cannot compete on price. The imminent closures could eliminate up to 80% of the UK's carbon dioxide output generated from ethanol production, affecting industries reliant on this co-product.
Carbon dioxide is critical in meat processing for stunning animals and extending the shelf life of packaged meat, while beverage producers rely on it for carbonation. Current CO2 supplies are already strained in Europe, and the loss of these plants may exacerbate shortages, potentially leading to localized meat shortages and increased food waste. Additionally, farmers who depend on byproducts like dried distillers grains for cattle feed could face higher input costs, drastically impacting the agricultural sector.
Expert opinion suggests that this disruption highlights vulnerabilities in supply chains that depend on a limited number of sources for essential materials. It emphasizes the need for policymakers to consider strategic support not just for ethanol production, but also to ensure the resilience of interconnected industries by diversifying supply and production bases to mitigate risks in the future.
British grain farmers are increasingly concerned about the potential closure of ethanol plants, which play a crucial role in enhancing the value of basic commodities like wheat. These plants contribute significantly to the domestic market by increasing the price of wheat by an estimated 10 to 15 pounds per ton. If these facilities were to shut down, farmers would be forced to rely on global markets characterized by volatility and uncertainty, particularly after experiencing two consecutive challenging seasons regarding weather conditions.
James Mills, a farmer from York, emphasizes that without the demand from ethanol plants, wheat prices would need to fall for U.K. farmers to remain competitive internationally, putting them at risk of operating at a loss. Additionally, dairy farmers depend on byproducts of ethanol production, specifically dried distillers grains with solubles (DDGS), which serve as a high-protein feed for cattle. If ethanol production declines, alternative feed sources may lead to increased costs, estimated to add around 35 million pounds annually for livestock farmers who would then need to source DDGS from abroad.
The supply chain for carbon dioxide, another essential component used in both food and medical applications, is also fragile. A disruption in supply could exacerbate existing challenges in availability and pricing for both sectors. The interconnectedness of agricultural production, supply chain stability, and market pricing underscores the need for more resilient practices in transportation and distribution.
From a transportation perspective, the impact of energy transitions and product shifts, like those from ethanol plants, highlight the importance of having a robust logistics network. Ensuring reliability in transportation not only aids in product delivery but also helps mitigate costs associated with supply chain disruptions. Investing in more efficient transport solutions could enhance market stability for farmers and producers, thereby strengthening the overall agricultural sector.
Carbon dioxide is critical in meat processing for stunning animals and extending the shelf life of packaged meat, while beverage producers rely on it for carbonation. Current CO2 supplies are already strained in Europe, and the loss of these plants may exacerbate shortages, potentially leading to localized meat shortages and increased food waste. Additionally, farmers who depend on byproducts like dried distillers grains for cattle feed could face higher input costs, drastically impacting the agricultural sector.
Expert opinion suggests that this disruption highlights vulnerabilities in supply chains that depend on a limited number of sources for essential materials. It emphasizes the need for policymakers to consider strategic support not just for ethanol production, but also to ensure the resilience of interconnected industries by diversifying supply and production bases to mitigate risks in the future.
British grain farmers are increasingly concerned about the potential closure of ethanol plants, which play a crucial role in enhancing the value of basic commodities like wheat. These plants contribute significantly to the domestic market by increasing the price of wheat by an estimated 10 to 15 pounds per ton. If these facilities were to shut down, farmers would be forced to rely on global markets characterized by volatility and uncertainty, particularly after experiencing two consecutive challenging seasons regarding weather conditions.
James Mills, a farmer from York, emphasizes that without the demand from ethanol plants, wheat prices would need to fall for U.K. farmers to remain competitive internationally, putting them at risk of operating at a loss. Additionally, dairy farmers depend on byproducts of ethanol production, specifically dried distillers grains with solubles (DDGS), which serve as a high-protein feed for cattle. If ethanol production declines, alternative feed sources may lead to increased costs, estimated to add around 35 million pounds annually for livestock farmers who would then need to source DDGS from abroad.
The supply chain for carbon dioxide, another essential component used in both food and medical applications, is also fragile. A disruption in supply could exacerbate existing challenges in availability and pricing for both sectors. The interconnectedness of agricultural production, supply chain stability, and market pricing underscores the need for more resilient practices in transportation and distribution.
From a transportation perspective, the impact of energy transitions and product shifts, like those from ethanol plants, highlight the importance of having a robust logistics network. Ensuring reliability in transportation not only aids in product delivery but also helps mitigate costs associated with supply chain disruptions. Investing in more efficient transport solutions could enhance market stability for farmers and producers, thereby strengthening the overall agricultural sector.
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