The U.S. is experiencing a drought that is impacting 56 percent of the nation and has become the worst in 50 years. With corn yields projected to significantly drop this year, a coalition of meat and poultry organizations has filed a petition to the U.S. Environmental Protection Agency (EPA) to waive the federal mandate for the production of corn ethanol for one year.
The petition would waive all of, or a substantial amount of, renewable fuel that must be produced under the Renewable Fuel Standard (RFS) through 2012 and continuing through 2013; one year from the time the waiver becomes effective.
Currently, RFS requires 13.2 billion gallons of corn-based ethanol to be produced in 2012 and 13.8 billion gallons in 2013, which requires 4.7 billion and 4.9 billion bushels of the nation’s corn. With an estimated 10.77 billion bushels to be harvested this year, corn-ethanol production will take a significant amount of the corn crop, leaving less corn and elevated prices for livestock feed.
Members of the coalition that signed the petition include the American Feed Industry Association, American Meat Institute, American Sheep Industries Association, California Dairy Campaign, Dairy Producers of New Mexico, Dairy Producers of Utah, Idaho Dairymen’s Association, Milk Producers Council, National Cattlemen’s Beef Association, National Chicken Council, National Pork Producers Council, National Turkey Federation, Nevada State Dairy Commission, North American Meat Association, Northwest Dairy Association, Oregon Dairy Farmers Association, Southeast Milk Inc., United Dairymen of Arizona and the Washington State Dairy Federation.
Because analysts are predicting ongoing extreme weather conditions, high corn prices and a serious corn shortage in 2012, a webinar was held to discuss the petition and address producer concerns about the drought. The webinar featured panelists including: Randy Spronk, Minnesota pork producer and National Pork Producers Council president-elect; J.D. Alexander, Nebraska cattleman and National Cattlemen’s Beef Association (NCBA) president; John Burkel, Minnesota turkey grower and National Turkey Federation vice chairman; and Michael Welch, President and CEO of Harrison Poultry in Bethlehem, GA and past National Chicken Council chairman.
“USDA’s recent crop report found that only 31 percent of the corn crop is rated good or excellent, while 38 percent is rated poor or very poor. Food prices will raise by 4 percent. The Obama Administration has only a few options available, one of which is the federal RFS. We need a waiver now,” stressed Spronk.
“I live in the great state of Nebraska and have the honor of serving as the leader of the largest organization representing cattlemen and women, NCBA,” added Alexander. “It’s no secret that I live in a part of the country that is responsible for raising corn for renewable fuel. I also appreciate that cattlemen have access to by-products of ethanol that are available to feed cattle. I just want to say up front how I support the ethanol industry. However, we don’t stand for manipulation of corn prices and a federal government sitting by patiently to artificially inflate the price of corn. This is the worst drought I’ve seen in my lifetime. Seventy percent of cattle country is in a drought. This isn’t isolated. This isn’t rocket science; let the market work. I’m not looking for a handout.”
Burkel buys a lot of corn as a turkey producer, and he believes corn prices will artificially escalate causing many farmers and ranchers to close up shop. “As a fourth generation turkey producer and member of a cooperative, I buy a lot of corn,” said Burkel. “The reality is that corn prices which have been distorted by the government can put even the most careful producers out of business. I think I speak for all independent producers, the ethanol waiver needs to be implemented. One of the detrimental effects of the serious drought conditions is the fact that some analysts are predicting that the corn crop this fall will be one-third less than the USDA originally predicted. This will increase the price of corn by 60 percent.”
Filed on behalf of livestock producers, this waiver would be extended a full year.
“There is no other way to get out of this situation than to implement the RFS Waiver,” added Alexander. “We are dealing with something that we haven’t seen for the past 50 years. We need to react accordingly and responsibly, and that is what I think we are doing with this petition.”