Pork Producers are Disappointed by EPA Denial of Corn Ethanol Waiver

We’ve been waiting for this news…but this was not the outcome most pork producers were hoping to hear about the Renewable Fuels Standard (RFS). The National Pork Producers Council (NPPC) had been one of the organizations requesting a waiver of the RFS based on the outcome of this year’s severe drought and the resulting impact on feed availability and prices. In spite of the pleas from livestock producers, the United States Environmental Protection Agency (EPA) announced today that the agency has not found evidence to support a finding of severe “economic harm” that would warrant granting a waiver of the RFS.

 

We’ve been waiting for this news…but this was not the outcome most pork producers were hoping to hear about the Renewable Fuels Standard (RFS). The National Pork Producers Council (NPPC) had been one of the organizations requesting a waiver of the RFS based on the outcome of this year’s severe drought and the resulting impact on feed availability and prices. In spite of the pleas from livestock producers, the United States Environmental Protection Agency (EPA) announced today that the agency has not found evidence to support a finding of severe “economic harm” that would warrant granting a waiver of the RFS. In their press release, EPA says the decision is based on economic analyses and modeling done in conjunction with the U.S. Department of Agriculture (USDA) and the U.S. Department of Energy.

So what happens now? In response to the announcement, Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) commented, “The advanced ethanol industry commends the US EPA for denying the RFS waiver petition. Waiving the RFS would have done little if anything to reduce grain prices, but would have hurt consumers at the pump and undercut investment in advanced biofuels. Congress was right to protect the RFS from specious and politically-motivated waiver arguments, and to include in the program explicit flexibility provisions that allow the standard to adjust to changing market conditions. The RFS is well-designed and is the primary reason why the United States has emerged as the global leader in the development of advanced biofuels. There will be other stalking horses advanced by the oil industry to weaken the RFS, but it is a step in the right direction to put this one behind us.”

If you are looking at this issue from the “who’s-eating-our-lunch” perspective, you may be interested in a statement, issued today by the National Council of Chain Restaurants (NCCR). Rob Green, NCCR Executive Director, states, “We are very disappointed in the Environmental Protection Agency’s decision not to grant a waiver from the Renewable Fuel Standard ethanol mandate.This year’s catastrophic drought seriously reduced corn yields and has lead to a situation where the RFS’ unsustainable mandates force ethanol fuel to commandeer a shrunken pool of available corn for food and livestock feed. The RFS statute provides a safety valve – in the form of a waiver – for precisely this kind of situation, but the EPA has failed to let it work. We will now face higher prices as a result.”

Green continues, “The National Council of Chain Restaurants will continue to press the case to policymakers that the RFS is a flawed law which unfairly distorts the market at the expense of chain restaurants, our consumers and everyone else involved in the food supply chain.”

Clearly, there are many angles from which to view this ethanol issue. How does it look from where you are sitting? Share your thoughts by clicking the “Comment” icon, or email lora.berg@penton.com to let us know what you think? And hang on, I think this conversation is just getting started.

Discuss this Blog Entry 9

Anonymous (not verified)
on Nov 16, 2012

There's always a fine line between adequate profit and "enough" profit. Several university studies leading up to the decision said waiving the RFS would make little difference in grain prices. Yet livestock producers continue to maintain the RFS is destroying their industries. Seems like there's a disconnect here that isn't explained by the university studies or livestock producers claims of economic ruin.

on Feb 6, 2014
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