Livestock producers petition EPA to waive corn-ethanol mandate

A group of livestock producers filed a petition Monday with the Environmental Protection Agency (EPA) requesting a one-year waiver from a corn-ethanol rule they say is raising food prices.

At issue is the EPA’s renewable fuel standard (RFS), which requires 15 billion gallons of domestic corn ethanol to be blended into the nation’s motor fuel supply by 2022, with a 2012 target of 13.2 billion gallons.

{mosads}The group says the law coupled with a nationwide drought will make it harder for them to procure enough corn to feed all their livestock. In a call with reporters on Monday, representatives of the livestock industry warned that the increased demand for corn will drive up beef, poultry and pork prices.

EPA has authority to waive the requirement in part or entirely if they determine it causes severe environmental or economic harm.

The industry’s petition comes as the House is stalled on its farm bill reauthorization effort, which could provide farmers with some relief from the severe drought. 

House Republicans have been split on whether to try to pass the five-year reform bill, which is opposed by fiscal conservatives and liberals, back a one-year extension of current spending or pass a stripped-down bill to provide more immediate drought relief.

The House is expected to vote on the one-year extension, but House Agriculture Committee ranking member Collin Peterson (D-Minn.) said Friday he is against an extension if there is no clear path to a long-term farm bill.

Livestock producers, though, are focusing on the effects of the drought in their petition and attempting to sidestep the farm bill fight.

The livestock groups are pursuing an RFS waiver that claims the drought has caused the severe economic harm the industry is experiencing, Michael Formica, chief environmental counsel with the National Pork Producers Council, said Monday. His group declined to discuss the farm bill.

J.D. Alexander, president of the National Cattlemen’s Beef Association, said Monday that the drought has pushed corn prices to record highs that have strained ranchers’ budgets.

“Seventy percent of cattle country is under drought conditions,” Alexander said. “I am not asking for a handout. I am just asking for the federal government to let the market work.”

A total waiver of the RFS would reduce corn prices by less than 5 percent, according to a recent study by Iowa State University economics Professor Bruce Babcock.

That would save the livestock industry $1 billion, Thomas Elam, a farm economist who was on the media call, said Monday.

But the economic harm distinction required for the RFS waiver has proven elusive. EPA rejected a waiver petition from Texas Gov. Rick Perry (R) in 2008, arguing that the RFS caused economic harm. EPA said the rule contributed to, but did not cause, those economic conditions.

The meat groups, though, are insistent the EPA and Congress permit some sort of relief from the rule as drought decimates corn stocks.

The organizations have also thrown support behind efforts in both the House
and the Senate that would let EPA reduce the corn-ethanol target by as
much as 50 percent when corn supplies run low.

About 40 percent of the nation’s corn crops are dedicated to ethanol
production, though some of that gets recycled as feed additives.

The National Corn Growers Association (NCGA) said in a statement Monday that it opposed the waiver request, though it respect those groups’ right to take that step. It encouraged the groups to find a way to reform the process rather than engage in legislative efforts to outright change or remove the RFS.

“NCGA stands firm in its support of the Renewable Fuel Standard and will
strongly oppose legislation to alter or repeal the RFS. Likewise, we
believe it is premature for a waiver of the RFS provisions at this
point,” NCGA President Garry Niemeyer said. “With the crop still in the field, it is too early to determine
this year’s final corn supply. In addition, the ethanol industry now has
a significant surplus of ethanol and RFS  credits that can greatly
offset ethanol’s impact on the corn supply.”

The National Cattlemen’s Beef Association, National Chicken Council, National Pork Producers Council and National Turkey Federation participated in the call.