November 19, 2012
No waiver for US law regarding corn for ethanol
A coalition of livestock, poultry and dairy organisations on Friday (Nov 16) was disappointed with the US Environmental Protection Agency's (EPA) denial of requests that it waive a federal law that requires corn to be turned into ethanol for gasoline.
The Renewable Fuels Standard (RFS) requires 13.8 billion gallons of corn-based ethanol to be blended into gasoline in 2013, an amount that will use about 4.5 billion bushels of the nation's corn crop, according to the USDA.
In fact, dozens of poultry, pork, beef and dairy operations have filed for bankruptcy, been sold or simply gone out of business over the past several months because of rising feed grain prices.
USDA's November 9 crop report puts this year's corn harvest at just 10.7 billion bushels, down 13% from last year and down 28% from USDA's May projection. The ethanol industry will use more than 40% of the corn supply next year.
Further, the carry-over stocks for 2012-13 are now forecast at 647 million bushels, less than 5% of expected corn usage and the lowest amount ever. This is a 35% decrease from last year's carry-over amount. This means there likely would be no corn reserves for next year should the country experience another poor crop.
"We now have about one-third less of the corn that we need to adequately supply animal feed, ethanol, exports and sufficient carry-over levels," the coalition noted. "But the government continues to mandate that a significant amount of the corn supply be blended next year into gasoline."
When Congress expanded the RFS in 2007, certain "safety valves" were added to the law. One provision allows the EPA administrator to reduce the required volume of renewable fuel in any year based on severe harm to the economy or environment of a state, a region or the US.
