More Governors request ethanol waiver

Rick Jordahl, Associate Editor, Pork Network   |   Updated: August 15, 2012

In separate letters sent Tuesday, Governor Beverly Perdue, D-NC,  and Governor Mike Beebe, D-Ark., officially petitioned the U.S. Environmental Protection Agency (EPA) to grant a waiver from the ethanol quotas mandated by the federal Renewable Fuels Standard (RFS). Their requests follow similar pleasfrom Maryland Governor Martin O’Malley and Delaware Governor Jack Markell made last week.  

Governors Perdue and Beebe join a growing list of recent requests to waive the RFS, including calls from 156 U.S. House members, 26 U.S Senators, the United Nations.

Top officials of the National Pork Producers Council (NPPC), National Cattlemen’s Beef Association (NCBA), National Turkey Federation (NTF), and the National Chicken Council (NCC) issued a petition last month also urging the EPA to waive its policy on mandated ethanol production as the severe and widespread drought has decimated the U.S. corn crop driving feed prices to all-time highs.

Due to the drought, USDA forecasts record high corn prices of $7.50 to $8.90 per bushel at the farm level, which could be more than 40 percent higher than the 2011-12 crop year.  Further, USDA reduced its feed usage forecast from its report last month by over 15 percent; much of this short corn crop’s burden will fall heavily on livestock and poultry producers.

“It is now beyond dispute that our nation is undergoing a severe, prolonged drought that is of historic proportions and is causing widespread damage to many of the most productive agricultural regions in the country,” Governor Perdue noted in her petition.   The direct harm, she added, was “caused by the RFS requirement to utilize ever-increasing amounts of corn and soybeans for transportation fuel.  Whatever the final damage done by the severe lack of rainfall, it is clear that this harm is reflected in accelerated prices for corn and soybeans, which have a severe economic impact on the state of North Carolina, various regions within the state, and important economic sectors within the state.”

“While the drought may have triggered the price spike in corn, an underlying cause is the federal policy mandating ever-increasing amounts of corn for fuel,” Governor Beebe said in his petition.  “The higher feed costs following the passage of RFS1 in 2005 and RFS2 in 2007 have resulted in a long-term shortage of grain in our nation, especially corn, and are clearly taking a terrible toll on Arkansas’ poultry and animal agriculture, potentially forcing reduced production and job losses and increasing food prices for consumers worldwide… I urge you to begin a formal process for considering a waiver of the renewable fuel mandate,” Beebe concluded.