The livestock and poultry industry as well as the ethanol industry respond to today's decision by the EPA to keep the Renewable Fuels Standard levels as is despite concerns over high corn prices.
The EPA announced today that it has not found evidence to support a finding of severe “economic harm” that would warrant granting a waiver of the Renewable Fuels Standard (RFS). The decision is based on economic analyses and modeling done in conjunction with the USDA and the DOE.
“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, assistant administrator, EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that Congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact.”
Economic analyses of impacts in the agricultural sector showed that on average waiving the mandate would reduce corn prices by just about one percent, EPA reported. Economic analyses of impacts in the energy sector showed that waiving the mandate would not impact household energy costs, the agency added.
The EPAct required EPA to implement a renewable fuels standard to ensure that transportation fuel sold in the U.S. contains a minimum volume of renewable fuel. A waiver of the mandate requires EPA, working with USDA and DOE, to make a finding of “severe economic harm” from the RFS mandate itself.
This is the second time that EPA has considered an RFS waiver request. In both cases, analysis concluded that that the mandate did not impose severe harm. For more information, visit http://www.epa.gov/otaq/fuels/renewablefuels/notices.htm.
Livestock, poultry coalition speaks out
Livestock, poultry and dairy organizations voiced disappointment with EPA’s decision. “We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate,” the coalition said.
According to a release from the National Pork Producers Council (NPPC), 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.
"How many more jobs and family farms have to be lost before we change this misguided policy and create a level playing field on the free market for the end users of corn?" the coalition asked. “It is now abundantly clear that this law is broken, and we will explore remedies to fix it.”
“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.”
“The EPA made the right decision today,” said Bob Dinneen, president and CEO, Renewable Fuels Association. “The flexibility that is built into the RFS allows the marketplace to ration demand, not the government. Indeed, the ethanol industry has responded to the market by reducing output by approximately 12%. Other users of corn have responded to a lesser degree. Maintaining the RFS is in the best interest of both U.S. agriculture and American consumers. The RFS is resulting in greater energy independence and diversity, real job creation, lower gas prices, and a cleaner environment.”
Dinneen added, “Moving forward, we need a more constructive dialog with livestock and poultry groups about the real causes of high feed costs and the impacts on retail food prices.”