Washington, Oct 27 - U.S. Agriculture Secretary Ed Schafer will meet dairy, meat and poultry groups on Monday to try and persuade them there is no special bailout for struggling ethanol producers, the department said on Friday.
In a letter sent to Schafer earlier this week, eight groups opposed giving federally guaranteed loans to ethanol makers because they agreed to pay high prices for corn, the feedstock used by ethanol plants, before the recent market declines.
The letter was signed by the American Meat Institute, National Cattlemen's Beef Association, among six others.
USDA has said there is no bail-out for ethanol. Instead, it said any rural business, including ethanol plants, are eligible to receive up to $25 million in loan guarantees as long as they meet certain financial requirements.
The company that wants a loan under the program must find a local bank willing to make the loan, which is then guaranteed by the government.
USDA spokesman Keith Williams said the industry asked for clarification of the program and whether the loans were just targeted for ethanol.
"We are inviting them in so we can reacquaint them with this long-standing 35-year-old program," said Williams.
USDA will tell them "it is broad-based and it is not targeted to any one industry," he added.
A spokesman with one industry group welcomed a meeting with USDA.
"If USDA wants to talk about this matter further, we'll be very happy to do so," said Richard Lobb of the National Chicken Council.
In the letter, the industry groups also said despite being large users of grain and facing high feed costs, they have been told to expect no aid.
High corn and natural gas prices have made producing ethanol barely profitable despite a government mandate requiring more ethanol to be blended into gasoline in the coming years.
Besides a tax credit available for blending ethanol with gasoline, federal law calls for the production of 9 billion gallons (35 billion liters) of biofuels in 2008 and 10.5 billion gallons next year. The requirement rises to 36 billion gallons in 2022 - with ethanol supply from corn capped at 15 billion gallons.