The food vs. fuel debate over ethanol continues, this time through the actions of a handful of U.S. states that are asking the U.S. Environmental Protection Agency to lift – temporarily, at least – the rules that require a "large share" (to use Reuters' words) of the corn crop in America to be used to make ethanol. Instead, says Georgia, the latest state to join the chorus, the corn should be used to feed chickens to counteract the effects of the drought affecting America this summer. New Mexico said something similar, but with cattle in the starring role.

Despite recent reassurances from the Renewable Fuels Association that the drought would not raise food prices, Georgia Governor Nathan Deal has written a letter to the federal government that says, in part, "the unprecedented drought experienced in major crop areas of the country, especially throughout extensive areas of the Midwest and South, has significantly decreased crop yields." Reuters writes that Deal calculates the extra cost to poultry farmers in Georgia at $1.4 million a day, thanks to the double-whammy of the drought and biofuel requirements. The EPA doesn't have to decide on the waiver request until November, so expect this fight to continue.


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  • 21 Comments
      Allch Chcar
      • 2 Years Ago
      The only way those requests for a waiver would hold any merit is if there was an attempt to prove that the potential increase in marginal costs for Gasoline/Ethanol were less than the increase marginal benefit to livestock and dairy companies. The Ethanol industry is already scaling back production so there is no reason to institute a waiver at this point in time, much better to wait until after the smoke has cleared to make a decision. Now I do believe it should become compulsory to sell Gasoline next to E10 just so the markets can adjust for situations like this. But this isn't about food vs fuel anymore, this is about politics .
      JP
      • 2 Years Ago
      Drive electric and eat less meat.
      Marcopolo
      • 2 Years Ago
      It ain't chicken feed ! The power of international trade ! Australian prices for chicken have increased due to the US drought. Local grain prices have risen with the export demand, and while wheat and grain farmers are delighted, meat farmers are not ! The issues around farming on an industrial scale get very emotional. But the cost differences can be as high as 20 x to the consumer. I suppose the difference in food quality, taste, etc between intensive and more 'natural' farming methods, depends on how far your budget can stretch. Sadly, many places in the world have no option, intensive farming is the only way to economically feed the population. The value of ethanol is increasingly dubious, although supporters defend the Ethanol industry with understandable ferocity. But most of the claims about it's potential benefits have not been realized, and in nearly every instance where either government subsidies or compulsory blending have been terminated, the industry collapses. The exceptions are nations like Brazil,Poland, Mauritius, endowed with massive over production of sugar crops. Bio-fuels will never be economically self-supporting, until more suitable feedstock can be developed. The concept that Ethanol makes for cheaper gasoline, without government mandate, is a bit far-fetched. If you truly want to save on both price and pollution, the easy answer is to power your vehicle with a natural gas derivative.( LPG, GNG.etc). However, if you really care about the environment, buy a vehicle with advanced EV technology !
      LiteNRG1
      • 2 Years Ago
      Now its a good time for the ethanol industry to move away from corn to other plants like switchgrass.
      winc06
      • 2 Years Ago
      A few years ago when corn was both subsidized and cheap and drove Mexican farmers out of business so that tortillas had to be made with imported corn American farmers sneered. Now new policies are hurting them. What goes around...
      PR
      • 2 Years Ago
      We can either pay higher prices for corn, or pay higher prices for gas. The existence of a drought has an economic cost that has to be paid one way or another. It is just a question of how it will be paid for. Here is how the money guys explain it: http://finance.yahoo.com/news/cheap-gas-cheap-corn-ethanols-193511149.html "using less ethanol would involve changing the octane levels of the gasoline refiners produce. Many now refine gas with an octane rating of 84, using ethanol to boost the level to 87 for regular gasoline ... Reducing the 10-percent ethanol blend, would raise the cost of finished gasoline" "If you were to look at the gasoline futures price it's around $3.00 a gallon, but ethanol prices throughout the Midwest are only $2.60 a gallon which makes economic sense to continue blending" "Do you want cheap corn or do you want cheap gasoline?"
      Rick
      • 2 Years Ago
      Sky rocketing food prices will help send US inflation high, help tip the US economy over the fiscal cliff maybe next year, into sub-prime nightmare 2 as all this printing of phoney Fiat money comes home to roost, lets hope it takes some totally useless investment banks down with it this time round.
      mazdamattyp5
      • 2 Years Ago
      Animals aren't supposed to be eating corn anyway. How about feeding them a natural diet so maybe we can quit getting E.Coli?
        paulwesterberg
        • 2 Years Ago
        @mazdamattyp5
        @Spec I didn't down vote you, but industrial farming(corn fattening) is usually done where animals are in industrial feedlots filled with ****. So corn isn't necessarily the problem, but feeding animals a more natural diet in a natural setting does help.
        Spec
        • 2 Years Ago
        @mazdamattyp5
        Well, it is not the corn causing E.Coli problems.
        Fgergergrergr
        • 2 Years Ago
        @mazdamattyp5
        Where E. coli really comes from; how to stop it http://www.thereader.com/index.php/site/comments/lets_talk_e._coli_again/
      Rob J
      • 2 Years Ago
      Want to have to some fun? Head over to; http://data.bls.gov/cgi-bin/surveymost?ap And look at the price changes in commodities (such as chicken) and then calculate the change including inflation. 1 pound of chicken in 1980 - was about 70 cents or $1.90 in 2012 USD 1 pound of chicken right now in 2012 - about $1.45 Yeah, those skyrocketing prices... Also, heaven forbid we eat less meat or start eating meat which feeds on plants it was designed by nature to eat (as in NOT corn).
        mazdamattyp5
        • 2 Years Ago
        @Rob J
        haha, I didn't see the last part of your comment before I made mine!
        Ele Truk
        • 2 Years Ago
        @Rob J
        Same with beef 1 pound of beef in 1980 - about $1.80 or $4.90 in 2012 USD 1 pound of beef right now in 2012 - about $3.45 Why else could we still be getting 99¢ hamburgers and chicken sandwiches even now?
        2 Wheeled Menace
        • 2 Years Ago
        @Rob J
        It's true. Especially if you adjust things for inflation, some items have gone waaay down in price. The real problem is that people's incomes are shrinking. Agriculture is always a see-saw of supply vs. demand, but consumers are more fragile towards price spikes during this recession. This is really just a call for subsidies..
      mapoftazifosho
      • 2 Years Ago
      I need some ethanol spin...Carney...where ya at?!
        Dave D
        • 2 Years Ago
        @mapoftazifosho
        Actually, where IS Carney? He usually leads these discussions.
      SNP
      • 2 Years Ago
      I hope prices stay high, the US has the most disposable income available per family in the world. Innovations and valuable productivity is spawned off this extra income. By lifting the prices on raw necessities like food & energy, it caps the potential of other nations. So long as we control the reserve currency, we just need to stay ahead of the pack and things will be fine for the country as a whole.
        SNP
        • 2 Years Ago
        @SNP
        It's also better that we control these prices than let the rest of the world control it. Remember how crude prices ballooned cause oil producing nations kept lifting prices just high enough that we dont complain? We're not china, we dont undersell ourselves. I think the price of american corn should be high because we produce more than we need to eat, if the rest of the world wants low prices then they should produce it themselves and sell it in the market at a dollar per bushel.
        Marcopolo
        • 2 Years Ago
        @SNP
        @ SNP "the US has the most disposable income available per family in the world" That might have been true in 2004, but not any more. The US is way behind many nations, including some industrialized nations.
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