Ten governors and a coalition of farm groups were upset on Friday to see the Environmental Protection Agency (EPA) deny requests that corn production requirements be waived. While corn farmers were likely glad to see the ruling, farmers in the poultry, hog and cattle industries were not. They're seeing big increases in corn-based feed costs in this drought-heavy year as corn is diverted for ethanol used in vehicle fuel. The EPA says that the Renewable Fuel Standard must be enforced and conditions are not present to qualify for the waiver.

Governor Mike Beebe (D-AK) had sent a letter to EPA in August calling for the waiver due to a "terrible toll" on animal agriculture in Arkansas and that consumers would be paying higher food prices because of it. Beebe was joined by governors from North Carolina, New Mexico, Georgia, Texas, Virginia, Maryland, Delaware, Utah and Wyoming.

The EPA said that the agency had studied the effects of waiving the requirement and determined it would have had little impact on corn prices. The EPA recognized this year's drought has created hardship in several sectors including livestock producers. However, extensive data analysis made clear to the agency that Congressional requirements for a waiver had not been met and that following the requirements of the Renewable Fuel Standard will have little, if any, impact on corn prices. Most of corn ethanol is blended into gasoline and makes up 10 percent of what comes out of the pump in the US, and this level will be increasing to E15, or 15 percent ethanol, in some areas.

It is tough to get a waiver. The EPA can grant one if it determines that the set ethanol production volume would "severely harm" the economy of a state, region or the entire country. The RFS requires that 13.2 billion gallons of ethanol be produced by this year, and 15 billion gallons by 2015.

A coalition of livestock, poultry and dairy organizations were upset with the ruling. "We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers," the coalition said in a statement. The farmers and governors had been joined by environmental groups in opposition to increased ethanol production. Environmentalists see increased production tearing up the land.


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  • 25 Comments
      Electron
      • 2 Years Ago
      I wonder what the food industry thinks it can achieve here. According to EPA studies waiving the mandate would reduce corn prices by all of 1 percent. Sounds like just another assault on the ethanol trenches in the eternal war on ethanol that seems more about greed and profit than environment and food prices. That's how the American Coalition for Ethanol seems to feel anyway, according to them: "Despite millions of dollars spent by Big Oil and Big Food to shamelessly attack American-made ethanol, it comes as no surprise EPA denied the requests to waive the RFS because the facts are on our side,"
      Dave D
      • 2 Years Ago
      I think this is a big mistake. It feels like they are siding with ethanol over consumers who will get hit hard over the price of food...especially meat products. Of course, if we had more healthy, free range meat in this country then it wouldn't be a problem.
        Spec
        • 2 Years Ago
        @Dave D
        Well . . . I've been meaning to eat less meat. ;-)
        Marcopolo
        • 2 Years Ago
        @Dave D
        @ Dave D "Of course, if we had more healthy, free range meat in this country then it wouldn't be a problem" Absolutely, but then the price of meat would be a very expensive luxury. I'm not sure that compulsory vegetarianism would be popular among the less affluent, and would only lead to the importation of cheaper and even more unhealthy meat.
          Ryan
          • 2 Years Ago
          @Marcopolo
          I've been to the factories they call farms now. I doubt a free range cow in Mexico would be any more unhealthy. And people should view meat as expensive, or eat veggie meat. Not the pink slime stuff made up of tendons and bones (or whatever they put in there and grind up). I would rather eat real food.
          raktmn
          • 2 Years Ago
          @Marcopolo
          The price for grass-fed, free range meats really isn't that much more expensive. You don't have to go to Whole Paycheck (Foods) Market and pay double. It is pretty common in Safeway and King Sooper/Kroger's are reasonable prices. We pay about 10-15% more on average and it is well worth it. If we had to cut our expenses, we could easily cut out 10-15% of our total meat consumption and still be very far from being vegetarians. Americans already eat so much meat that we could probably cut half of the meat out of our diet and still eat more meat per person than most of the rest of the world. Far from compulsory vegetarianism. Compulsory vegetarianism seems like a reactionary overstatement.
          Dave D
          • 2 Years Ago
          @Marcopolo
          I don't know Marco. I spend a lot of time in South America, and meat is relatively the same price down in Brazil and Argentina as it is here (compared to other food) and they get everything free range. Not sure how they make it work, but they do. And it taste better.
      fred schumacher
      • 2 Years Ago
      This is nothing new. Grain farmers and livestock producers have always been in conflict over feed grain prices. Farmers want high grain prices; livestock feeders want low prices. And high grain prices won't directly affect meat prices. Both are determined independently through openly traded commodities markets. Meat prices will rise, but that is because livestock producers are culling herds. For beef, it's a lack of hay that has been the driving factor, not corn prices.
      Marcopolo
      • 2 Years Ago
      It's just a thought, but I wonder if this decision was deferred until after the election......
        2 wheeled menace
        • 2 Years Ago
        @Marcopolo
        Heh, wait 2-3 months for the rest of the deferred decisions to come into play ;)
      Letstakeawalk
      • 2 Years Ago
      "The RFS requires that 13.2 billion gallons of ethanol be produced by this year, and 15 billion gallons by 2015." So, how much ethanol will actually be needed? "In 2011, the 133.93 billion gallons of gasoline (3.19 billion barrels) consumed in the United States contained about 12.87 billion gallons of ethanol, accounting for 9% of the volume of gasoline consumed." http://www.eia.gov/tools/faqs/faq.cfm?id=27&t=10 The way it was explained to me, the push for E15 and E20 is more about trying to use up all the ethanol that they're required to produce, not so much for any real economic or ecological benefit.
      raktmn
      • 2 Years Ago
      Distiller's grain.
      Levine Levine
      • 2 Years Ago
      You can bet the corn farmers are against cellulosic (sic) ethanol.
      Fgergergrergr
      • 2 Years Ago
      Or they could feed cattle grass..
      dellrio
      • 2 Years Ago
      " Governor Mike Beebe (D-AK) " Should be " Governor Mike Beebe (D-AR) " AK = Alaska, probably not producing a lot of ethanol up there...
      fred schumacher
      • 2 Years Ago
      It should be noted that a bushel of corn, at equilibrium moisture content, contains one gallon of water, leaving 48 pounds dry matter to start with. Ethanol is classic value added processing, occurring in rural areas rather than cities as is the norm. It’s a two-for, providing a higher value product, ethanol, while at the same time retaining part of its most common usage, livestock feed, in the form of distillers grains. Corn is a low-protein grain, but since protein is not a part of the ethanol process, protein is concentrated in the remnant distillers grains, allowing for a reduction in the need of high protein supplement, such as soybean meal. Cattle gain weight faster on distillers grains than straight unprocessed corn. Ethanol started out as a way to use damaged and unmarketable corn. Back when corn prices were low and railroad hopper cars were in short supply, huge piles of corn left exposed on the ground were a common sight. When pollution reducing oxygenators were mandated for fuel, ethanol got its major boost. Functionally, when accounting for distillers grains, ethanol uses up one-fourth of total corn production. Corn production has gone up because ethanol has provided a new market. If that market were suddenly to disappear, through government action, this country would, once again, be left with unmarketable surplus production to deal with, the same situation as triggered the initial ethanol industry. Grain farmers and livestock producers have mutually exclusive needs. Livestock feeders want low feed grain prices, while farmers want high. The states that have been asking for ethanol mandate relief are low-producing, high-using states. They account for less than 4% of U.S. corn production. In a drought year, high prices are essential for maintaining the economic viability of farms. If government takes action to reduce prices, the ability of farmers to produce a crop in the coming year will be severely reduced. Farming is a high cash-flow industry. Farmers have switched to a production methodology called Maximum Economic Yield (MEY). If cash flow is reduced, farmers will adjust their production to deliver maximum net return to themselves, not maximum yield for the market. The EPA is quite conscious of this process and has entered it into their decision making.
        Val
        • 2 Years Ago
        @fred schumacher
        If that market were suddenly to disappear, through government action, You make it sound as if the market for ethanol wasn't created by government policy in the firs place. And using corn that would have gone to waste otherwise is totally different from using 1/4 of all corn grown for ethanol production.
        marcopolo
        • 2 Years Ago
        @fred schumacher
        @ fred schumacher You have posted a reasonable and accurate portrayal of the history and rationale for the commencement of the ethanol industry. The problem is, it hasn't worked out as it was originally envisioned. While ethanol production has produced a boom for many small rural communities, it's also produced a vast, heavily subsidized industry, that only exists due to government mandates. The problem is fundamental. Energy, is an 'on demand' product. It needs to be available without interruption and with strict quality control. Ethanol, is subject to the vagaries on nature. This factor will all was mean that ethanol with always be unreliable, and subject to inefficient production. Farming is not like any other business. Farming is subject to a wide range of complex economic factors, but has even more problems created within the natural world which are beyond anyone's control. By all means embrace ethanol, but let it the industry stand on it's own legs, without subsidies,mandates, or any other government interference. .
      Charlie Peters
      • 2 Years Ago
      Can Mary Nichols & California Governor Brown apply to fed EPA for a BP GMO fuel ethanol waiver, make fuel ethanol voluntary? Classic car, motorcycle, lawn tool engine, boat, UN, World Bank, Bill Clinton, Al Gore, water agency, and much more support we stop the fuel ethanol mandate.
      Charlie Peters
      • 2 Years Ago
      BP GMO fuel in your water? Does your home water supply contain ethanol? Water, Fuel, & food concern must be conspiracy theory!!! http://www.dailycal.org/2012/11/05/gmos-have-long-history-at-uc-berkeley/
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