Meat and Poultry Industry News

Associations call Renewable Fuels Standard “broken” after EPA rejects ethanol waiver

November 16, 2012
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A coalition of livestock, poultry and dairy organizations expressed extreme disappointment with the U.S. Environmental Protection Agency’s denial in the wake of the worst drought in more than half a century of requests that it waive a federal law that requires corn to be turned into ethanol for gasoline. 

The Renewable Fuels Standard (RFS) requires 13.8 billion gallons of corn-based ethanol to be blended into gasoline in 2013, an amount that will use about 4.5 billion bushels of the nation’s corn crop, according to the U.S. Department of Agriculture. 

“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 that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate,” the coalition said. 

In fact, dozens of poultry, pork, beef and dairy operations have filed for bankruptcy, been sold or simply gone out of business over the past several months because of rising feed grain prices.

“How many more jobs and family farms have to be lost before we change this misguided policy and create a level playing field on the free market for the end users of corn?” the coalition asked.  “It is now abundantly clear that this law is broken, and we will explore remedies to fix it.” 

USDA’s Nov. 9 crop report puts this year’s corn harvest at just 10.7 billion bushels, down 13 percent from last year and down 28 percent from USDA’s May projection.  The ethanol industry will use more than 40 percent of the corn supply next year. 

Further, the carry-over stocks for 2012-13 are now forecast at 647 million bushels, less than 5 percent of expected corn usage and the lowest amount ever.  This is a 35 percent decrease from last year’s carry-over amount.  This means there likely would be no corn reserves for next year should the country experience another poor crop. 

“We now have about one-third less of the corn that we need to adequately supply animal feed, ethanol, exports and sufficient carry-over levels,” the coalition noted.  “But the government continues to mandate that a significant amount of the corn supply be blended next year into gasoline.”

When Congress expanded the RFS in 2007, certain “safety valves” were added to the law.  One provision allows the EPA administrator to reduce the required volume of renewable fuel in any year based on severe harm to the economy or environment of a state, a region or the United States. 

In addition to the livestock, poultry and dairy organizations, a bipartisan group of 34 U.S. senators and 156 House members and nine governors petitioned EPA to grant a waiver of the federal requirement for the production of corn ethanol because the mandate, coupled with a drought that has reduced yields and pushed up prices of feed grains, has caused the severe economic harm for which Congress added “safety valves.”

“Unfortunately, EPA chose to ignore all of them by issuing a decision that is going to cost more American jobs, put family farmers and ranchers out of business, create an animal feed crisis and cause food costs to soar in the coming months,” the coalition concluded. 

Source: NTF

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