Rick Jordahl, Associate Editor, Pork Network  |   November 14, 2012 resize text

The U.S. Environmental Protection Agency (EPA) said on Tuesday that it will soon have a decision on whether to waive the ethanol mandate. According to a Reuters report, "EPA is completing its review and analysis of the Renewable Fuels Standard (RFS) waiver requests and the agency plans to reach a decision shortly," an agency spokeswoman said.

In comments to the EPA last month, the National Pork Producers Council (NPPC) said EPA should grant a waiver of the federal requirement for the production of corn ethanol because the mandate, coupled with a summer drought that has reduced yields and pushed up prices of feed grains, is causing severe economic harm to pork producers. Click here to read NPPC’s comments.

The RFS requires 13.2 billion gallons of ethanol to be made from corn this year and 13.9 billion gallons in 2013. The amounts will use about 4.7 billion and 4.9 billion bushels, respectively, of the nation’s corn crop.

The USDA estimates that just 10.7 billion bushels of corn will be harvested this year, down 1.6 billion bushels from 2011.

With the RFS, NPPC pointed out in its comments, a weather-driven supply shock no longer simply results in higher prices for feed grains but causes “explosively higher prices, crippling credit and liquidity shortfalls and the frightening prospect that some producers cannot assure stable access to corn to feed their animals.”

Last summer, seven governors asked the EPA to temporarily waive the mandate on ethanol because the drought has driven corn prices higher and hurt livestock producers who depend on the grain for feed. Forty percent of the U.S. corn crop is used to make ethanol.

In 2008, EPA denied a request from Texas to relax the mandate during a period of surging corn prices. Ethanol trade groups say they expect the same ruling this time.

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Comments (5) Leave a comment 

510-537-1796  |  November, 14, 2012 at 04:29 AM

GMO ethanol in your home water supply? Check it out.

kansas  |  November, 14, 2012 at 10:29 AM

So why aren't we (States & Producer Groups) suing the EPA right now? That seems to be the favored method of Enviro Groups that wish to force EPA's hand. Especially when the suit is pushing action that EPA officials privately approve of, but wish to appear to be resistant too.

I do believe Producers and States have lawyers available - yes? This would also serve to Increase The Public Profile of the unintended consquences of the Alternative Fuels policies of the Left - that have put Big Government in the position of picking "green" winners by handing out Tax Dollars.

Iowa  |  November, 14, 2012 at 10:43 AM

I don't think that Ethanol is benefiting from a tax dollars anymore. The per gallon tax benefit is gone and ethanol is running without tax benefits. We shouldn't be too hasty in relaxing the mandate as it has many benefits; such as cleaner air and less foreign dependency on oil. It has made farming profitable for the grain producers. They have their own oil well in their fields and the fact that the oil companies don't like ethanol doesn't bother me. I'm very sympathetic to hog and cattle producers; but we need a strong farm community to support this country. For the first time in a while farmers aren't dependent on the government to make a living. I would suggest a safety net put in place for livestock producers to cushion the blow until the US once again has a good crop.

kansas  |  November, 15, 2012 at 08:59 AM

Randy - Of course ethanol is still benefiting from tax dollars, just not in the same way. The 55 BILLION Dollars ethanol has already received from the Federal Government alone has, as most who can add and subtract know, lasting effects. On the local level, hundreds of millions in Bonds and Tax Abatements are still in effect and being absorbed by State and Local Taxpayers. This governmental "largesse" has rewarded Cargill, ADM, Bunge and of course the large oil companies who blend motor fuels as much or more than grain farmers in the profit category. And don't forget that using Ethanol, as a gasoline additive to replace the "lead" carcinogen that preceded it, is still mandatory.
I'm very troubled by your suggestion that a "sympathetic" solution for livestock farmers problems - created by Subsidies - is to seek More Subsidies, redistributing Tax Dollars (whose tax dollars you don't say) to provide yet another "Safety Net", to transfer the dependency of grain producers over onto livestock producers. This cycle of government program dependencies must end somewhere, don't you think? Market Manipulation, whether via government programs or others, is anti-business, anti-capitalist and anti-individualist.

kansas  |  November, 15, 2012 at 08:59 AM

Randy - Of course ethanol is still benefiting from tax dollars, just not in the same way. The 55 BILLION Dollars ethanol has already received from the Federal Government alone has, as most who can add and subtract know, lasting effects. On the local level, hundreds of millions in Bonds and Tax Abatements are still in effect and being absorbed by State and Local Taxpayers. This governmental "largesse" has rewarded Cargill, ADM, Bunge and of course the large oil companies who blend motor fuels as much or more than grain farmers in the profit category. And don't forget that using Ethanol, as a gasoline additive to replace the "lead" carcinogen that preceded it, is still mandatory.
I'm very troubled by your suggestion that a "sympathetic" solution for livestock farmers problems - created by Subsidies - is to seek More Subsidies, redistributing Tax Dollars (whose tax dollars you don't say) to provide yet another "Safety Net", to transfer the dependency of grain producers over onto livestock producers. This cycle of government program dependencies must end somewhere, don't you think? Market Manipulation, whether via government programs or others, is anti-business, anti-capitalist and anti-individualist.