COLUMBUS — Top-ranking officials for the National Corn Growers Association and American Soybean Association both urged Ohio farmers to speak out about the U.S. Environmental Protection Agency’s proposal to reduce the Renewable Fuel Standard in 2014.
Speaking Dec. 17 at the Ohio Grain Farmers Symposium in Columbus, NCGA CEO Rick Tolman, and ASA First Vice President Ray Gasser said the Renewable Fuel Standard, or RFS, is critical to agriculture.
The RFS is a federal policy that mandates a minimum amount of renewable fuel be blended each year, including from ethanol. The most recent proposal would require about 3 billion gallons less biofuel (15.21 billion) be blended into gasoline in 2014, compared to the 18.15 billion gallons that the law would have mandated.
Long-term effect
Although corn prices have been falling recently, the effect of a reduced RFS could take months, to a few years to be seen.
“It’s not what it’s doing to your prices right now, it’s what it will do in the future is because it’s taken all growth opportunity away,” said Tolman. “Unless we break that blend wall structure, we can’t compete on an economic basis.”
Tolman said the push-back is coming from the oil industry, which is upset at the current 10-15 percent market loss that ethanol blends cause.
“It (the Renewable Volume Obligation) was designed to pressure the oil industry so they would put the infrastructure in place so that you would have the opportunity to have E15 or higher blends,” Tolman said. “And they won’t stop there — the oil industry wants the entire RFS taken away.”
Something workable
Gasser said soybean and corn farmers need to work together to promote their industries, and “to make sure that that (RFS) is workable and that they (lawmakers) don’t abandon our renewable energy programs, whether it’s biodiesel or ethanol.”
Computers were set up at a table in the back of the auditorium, so that farmers could write to their lawmakers and the EPA during the meeting, which is an annual gathering for Ohio’s grain farmers.
“It’s not considered rude for you to be back there making comments to the U.S. EPA while (we’re) speaking,” said Tadd Nicholson, executive director of the Ohio Corn Growers Association.
Nicholson said the profitability of grain farming the past few years has provided the “ability for a second generation to come back and help farm,” and kept family operations in business.
All sides
But the RFS is not without its critics. In its proposal, the EPA says the nation is using less gasoline than was expected when the RFS was written. The EPA says it needed to reduce the amount of renewable fuel required, since it can not all be blended into the gas supply.
The decision also follows a controversial story written by the Associated Press, which looked at the unintended consequences of ethanol.
The AP report estimates 6.5 million acres of conservation land was lost as farmers rushed to plant more corn. Some 19 million additional acres of corn were planted, while the price of corn per bushel rose from $3.39 a bushel in 2007, to $6.67 a bushel and higher in 2012.
NCGA and other corn organizations argue the story contained many errors and drew an unfair picture of the grain industry, but the story renewed federal interest in the RFS debate.
Livestock concern
In addition to the oil industry, the RFS is being criticized by livestock producers, who say it has caused their feed and operating costs to go up — as well as consumer goods — without a market foundation.
Steve Foglesong, past president of the National Cattlemen’s Association, testified before the EPA in December that he grows corn on his Illinois farm and is not opposed to ethanol, but he wants the market to decide how much should be produced, not a government mandate.
“I am a corn farmer, I just choose to feed it to cattle, it’s value added,” said Foglesong. “It’s not that different from the ethanol industry who takes corn to feed it into their plants and produce ethanol, dried distillers grains, and carbon dioxide instead of beef. The process is identical, all but the RFS mandate, which gives the ethanol industry an advantage in purchasing corn.
“We’re not opposed to corn ethanol, but it’s time to look at reforming the RFS and let the market pick winners and losers instead of the government,” he continued.
The National Milk Producers Federation and the National Turkey Federation are among other livestock groups that have criticized the RFS.
Elimination act
Most recently, the National Turkey Federation and National Chicken Council have announced their support for legislation that would do away with the corn ethanol mandate altogether, known as the “Corn Ethanol Mandate Elimination Act.”
The Act was introduced Dec. 12 by Sen. Dianne Feinstein, D-Calif, and Sen. Tom Coburn, R-Okla., along with eight cosponsors.
“The time to end the corn ethanol mandate has arrived,” Coburn said in a released statement.”
He said the mandate has actually increased fuel prices and the price for food — facts that corn growers dispute.
“This misguided policy has cost taxpayers billions of dollars, increased fuel prices and made our food more expensive,” he said. “Eliminating this mandate will let market forces, rather than political and parochial forces, determine how to diversify fuel supplies in an ever-changing marketplace.”
NCGA opposes the legislation, saying it “rehashes arguments which have long been proven false and continues a relentless attack upon domestic, renewable ethanol.”
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