Corn growers hail EPA ruling

By GARY BROCK and Wire Reports

gbrock@recordherald.com

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.)

Posted by Tina Murdock on Dec 30 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.