Livestock farmers still seeking pause in ethanol production



"If not now, when?" Randy Spronk, a Minnesota pork farmer, said of the EPA's authority to defer the ethanol production requirement when it threatens to severely harm the economy of a state or region. "Everyone should feel the pain of rationing."






With half the nation's corn crop now in poor condition, "relief from the Renewable Fuel Standard is extremely urgent because another short corn crop would be devastating to the animal agriculture industry, food manufacturers, food service providers, as well as consumers," 156 House members wrote EPA Administrator Lisa Jackson in urging her to issue a waiver. Twenty-five senators, about evenly divided between the two parties, wrote a similar letter to Jackson this week.


It's more complicated for people like Kevin Ross, who raises corn and soybeans in southwest Iowa and heads the Iowa Corn Growers Association. Losing the ethanol market, he said, would definitely hurt his business. Having another major market for corn, he said, "has had an effect on the rural economy that's not been seen in decades. … I really hope we don't make any rash decisions about it."


In an interview with The Associated Press, Babcock cautioned that at this point no one knows what the final corn yield will be. But if it drops dramatically from current projections, his estimate for the impact of suspending the mandate would go up. "The worse the corn crop, the bigger will be the effect on corn prices."

The ethanol industry, backed by the Obama administration, says it's unfair to blame it for turmoil in the corn market. Tom Buis, CEO of Growth Energy, which represents producers and supporters of ethanol, said at a recent news conference that he'd "never heard a bigger whopper" than the argument that fuel demands were hurting food supplies.

The ethanol industry argues that the Agriculture Department's estimate that ethanol consumes a 40-percent share of the corn market is misleading because about a third of the ethanol corn is refined into a high-value animal feed called dried distiller grain. Buis said ethanol's actual share of the corn crop as a fuel is closer to 16 percent.


Agriculture Secretary Tom Vilsack echoed that at a White House briefing last month, saying: "There's no need to go to the EPA at this point in time. Based on the quantity of ethanol that's currently in storage, there's no problem in that area at this point in time."



C. Larry Pope, president and CEO of Smithfield Foods Inc., the world's largest pork producer, said in a July 26 Wall Street Journal opinion piece that Congress should pass a House proposal that would tie the Renewable Fuel Standard percentage to free-market supply and demand. He said that with the ethanol mandate and the high price of corn, "Smithfield was forced to take the unfortunate but absolutely necessary step of buying corn from Brazil."

That brought a quick retort from Sen. Charles Grassley, R-Iowa, who went to the Senate floor to compare Pope to Henny Penny, the character from the children's story "Chicken Little" who warned everyone that the sky was falling.

"Why did farmers plant 96 million acres of corn this year? Why have seed producers spent millions to develop better yielding and drought-resistant traits?" Grassley asked. "The answer is simple: ethanol."

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