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Meat groups: Waive the ethanol mandate
By STEVE BINDER
Illinois Correspondent

WASHINGTON, D.C. — The nation’s largest feed association last week joined a coalition of livestock producers in asking the U.S. Environmental Protection Agency (EPA) to lessen or waive the nation’s mandate on ethanol production for a year.

The request, filed with EPA Administra-tor Lisa Jackson on July 30, comes as more than half the United States has been declared disaster areas because of drought conditions, leading corn prices to record levels of more than $8 a bushel.

The American Feed Industry Assoc. (AFIA) signed onto the request, along with the National Cattlemen’s Beef Assoc. (NCBA), the National Chicken Council, the National Pork Producers Council, the National Turkey Federation and the American Meat Institute, along with other state groups. “We are having trouble buying corn,” said J.D. Alexander of Nebraska, president of the NCBA. “It’s really putting a burden on our operations and many others across the nation. It’s time to wean the ethanol industry and let it stand on its own.”

Ethanol producers and the biofuel’s largest trade group said no change is needed in the Renewable Fuels Standard (RFS) in large part because the market overall is adjusting to current conditions. Less ethanol is being produced these days, plus makers of the corn biofuel have enough supply on hand to meet the federal mandate for this year and into 2013.

“Given the flexibilities inherent to the RFS, and the fact that waiving the program would not result in any meaningful impacts on corn prices, we fully expect Administrator Jackson to deny any waiver request,” said Bob Dinneen, RFA president and CEO. “A dispassionate review of the facts can lead to only one conclusion: A waiver of the RFS would simply reward oil companies that have long sought to repeal this very important and successful program. The RFS has reduced our dependence on imported oil and saved consumers at the pump.”

The EPA has not waived the ethanol mandate since it was first adopted and later updated in 2007. Dinneen also noted the industry produces a valuable feed byproduct for livestock, dried distillers grains. DDGs are high in nutrients.

“Waiving the RFS won’t … result in significantly lower feed prices. Because ethanol plants also produce a high-protein feed, limiting ethanol production will only further complicate drought-related feed issues and costs,” he said.

About 35 percent of the U.S. corn supply now is used to make ethanol, with roughly the same amount used for livestock feed, according to the USDA.

USDA Secretary Tom Vilsack stated again last week that he is against any change in the RFS. The RFS mandates that 13.2 billion gallons of ethanol is produced this year, and 13.8 billion gallons next year.

In its request to Jackson to waive the RFS, the coalition wrote the mandate has “directly affected the supply and cost of feed in major agricultural sectors of this country, causing the type of economic harm that justifies issuance of an RFS waiver” and that it is “abundantly clear that sufficient harm is occurring now and that economic conditions affecting grain supplies and feed prices will worsen in the months ahead.”

8/8/2012