Corn growers hail EPA ruling
By GARY BROCK and Wire Reports
WASHINGTON — A bushel of corn may bring $6, but it may actually be worth its weight in gold over the next year.
And that bushel of corn’s value rose even higher in late November when the U.S. Environmental Protection Agency Thanksgiving week declined to relax its requirement on the use of corn ethanol in gasoline, rejecting the request from several states and organizations related to a steep decline this year in America’s corn production.
And while that is good news for Ohio’s corn growers, it may not be such good news for the livestock industry, restaurants chains and probably consumers — anyone, in fact, that depend on corn for food.
But a member of the Ohio Corn and Wheat Growers Association believes that the news may not be so bad for Ohio’s livestock producers. Board member Jed Bowers of Fayette County thinks that the supply of corn in coming months will be greater than the pessimists are predicting.
This past summer’s drought that withered crops led not only to higher prices, but the prospects of less corn to go around to all those needing it. Estimates indicate that as much as half of the nation’s crop will be used to produce ethanol this year to meet the federal renewable energy standard for transportation fuel. The federal standard means there is a mandated quota on how much corn is needed for the ethanol production.
Congress set the ethanol year-by-year quota for biofuels in 2007, and that quota doesn’t change for the variation in year-to-year corn crop yield.
“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” Gina McCarthy, an E.P.A. assistant administrator, said in a statement. “But our extensive analysis makes clear that Congressional requirements for a waiver have not been met.”
To approve a change in the standard, the agency would have to conclude that the fuel rule would “severely harm” the economy, according to The New York Times report on the issue. The E.P.A. said it had analyzed 500 potential market variations and that most of them showed no impact from the use of corn for ethanol; those that did showed an average impact of 7 cents a bushel, less than 1 percent of the price, it said.
A coalition of livestock groups expressed frustration with the decision, as did the National Council of Chain Restaurants, which says its costs have also risen because of the use of corn in ethanol production.
Bowers says he understands the concerns of the livestock producers, but prices may not be as high as they fear.
“Corn growers planted 96 million acres of corn in 2012,” he said, and that is one of the highest ever. “Despite the drought, I think we had a better corn crop than people were expecting. Even with the drought, there will be a lot of bushels to go around.”
He said some of the talk of corn shortages is a “scare” and while livestock owners were paying $7 or $8 a bushel for feed, he feels that won’t be the case in the future.
“I think the livestock producers will be OK,” he said.
Bowers, who is also a member of the National Corn Growers Association Public Policy Action Team, applauded the EPA decision. He said its impact will be huge on communities such as those in southern Ohio where corn growers provide thousands of bushels of corn to ethanol plants every day.
The ethanol plant in Bloomingburg, for example, grinds about 100,000 bushels of corn per day or more at peak production. Bowers said the plant has operated lower recently, at 80–90,000 bushels when the price of corn was much higher.
He said the EPA decision is “wonderful for our community, for our market area.” He said the revenue from the corn production has allowed farmers to pay for updating their equipment and to hire additional workers. “All of that money goes right back into the local economy,” he pointed out.
The head of the Ohio corn growers group also applauded the EPA ruling.
“We support the decision the US Environmental Protection Agency has made to continue to uphold the Renewable Fuel Standard (RFS) promoting American-grown energy. Thanks in part to the contribution made by corn ethanol and biofuels, our dependence on foreign oil continues to decline, keeping billions of dollars in our economy. Energy independence is an important goal of our country and the RFS is a vital tool to accomplish that task. In spite of the drought, Ohio’s corn farmers have helped to produce the eighth-largest U.S. corn crop in recorded history, helping us to maintain our path towards American energy independence,” said Ohio Corn and Wheat Growers Association Executive Director Tadd Nicholson.
(Gary Brock is Editor of ACRES of Southwest Ohio.)