Opinion: Latest ethanol mandates draw relief, disappointment

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Photo by Darrell Hoemann/Midwest Center for Investigative Reporting

Grain stored outside after harvest at The Andersons facility near Champaign, Ill., on Nov. 6, 2015. According to the U.S. Department of Agriculture, 2013, 2014 and 2015 have all been among the top harvest years on record.

Dave Dickey

Dave Dickey

The U.S. farmer is drowning in a sea of  corn.

The U.S. Department of Agriculture reported in its November World Agriculture Supply and Demand report that closing corn stocks for 2015-16 will likely be a very burdensome 1.76 billion bushels with average cash prices well under $4 a bushel.

All bearish news to be sure.

Corn producers find themselves hoping something – anything – will change the balance sheet.

University of Illinois at Urbana-Champaign agricultural economist Darrel Good minced no words in his analysis: “Without a surprise in the final 2015 production estimate or December 1 stocks estimate to be released in January, low prices may persist into the spring when U.S. weather becomes an important factor again.”

Perhaps that is why corn advocates spoke in positive terms about the Nov. 30 announcement from the Environmental Protection Agency on new benchmarks for blending ethanol into motor fuel.

The EPA is calling on oil companies to blend a total of 18.1 billion gallons of biofuels into gasoline in 2016.

Ethanol – the majority of which is made from corn – would account for 14.5 billion gallons, half a billion gallons more than the EPA floated in a May estimate.

Given that the EPA in 2013 suggested lowering the Renewable Fuel Standard, the corn industry was in a word relieved as the mandates are higher.

But at the same time,  the corn trade is out of sorts because the EPA did not call for even higher production more in line with the Energy Independence and Security Act of 2007.

That legislation mandates ramping up ethanol of all kinds to 36 billion gallons by 2022.

From the National Corn Growers Association:

“While we are pleased to see the EPA take a step forward and revise its original proposal, the fact remains that any reduction in the statutory amount will have a negative impact on our economy, our energy security, and the environment. It is unfortunate that Big Oil’s campaign of misinformation continues to carry weight in the court of public opinion, and in this decision.”

And from the Renewable Fuel Association:

“The Department of Agriculture continues to fight for ethanol, working hard to secure necessary infrastructure, promoting exports, correcting food versus fuel myths, investing in new technologies and new feedstocks and advocating for ethanol’s positive climate change benefits. The Department of Energy, too, works hard to complete biofuel research on higher ethanol blends and infrastructure that is moving this industry forward. Why is EPA so out of step?”

Big oil companies have been notably missing in action regarding the Nov. 30 EPA announcement, but given their track record of filing lawsuits over the RFS in the past, perhaps another round of litigation is on the horizon.


About Dave Dickey

Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For the past 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for The Midwest Center for Investigative Reporting covers agriculture and related issues including politics, government, environment and labor. Email him at dave.dickey@investigatemidwest.org.

This column reflects the writer’s own opinions and not those of The Midwest Center for Investigative Reporting.

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