Corn for Food, Not Fuel
IT is not often that a stroke of a pen can quickly undo the ravages of nature, but federal regulators now have an opportunity to do just that. Americans’ food budgets will be hit hard by the ongoing Midwestern drought, the worst since 1956. Food bills will rise and many farmers will go bust.
Livestock farmers hurt by soaring grain prices
Forty percent of the national corn harvest last year went to ethanol production under the federal government's renewable fuel standard, requiring petroleum companies to buy a minimum amount of ethanol to blend into gasoline supplies.
David Hardin, along with many of his neighbors, wants the government to waive the requirement during this drought so he can compete fairly for the supply he needs instead of paying sky high prices for what little is left.
The ethanol industry opposes any changes and says its consumption of corn is down nearly 14 percent in just the last six weeks. "This is the worst I have ever seen in my lifetime and I hope it stays the worst that I've ever experienced," Hardin said.
Experts on the ethanol market say a federal waiver is extremely unlikely this year. But if the drought continues, it could tee up a real battle next year between ethanol industry that helps to power our cars and the livestock farmers who produce the meat we eat.
Drought spurs ethanol push-back; World Bank watchful
The debate over using crops for fuel burst back onto the political stage on Monday as U.S. ranchers and poultry producers sought "a little help" from the government by waiving its ethanol mandate in the face of a dire drought.
As Chicago corn and soybean prices rallied back toward last week's record highs, the withering dry spell that has revived fears of a 2008-like spike in food prices showed no sign of relenting. According to midday weather forecasts, conditions will be even drier than expected, threatening to stunt soy plants as they enter their most crucial phase of growth.
On Monday, Oklahoma Governor Mary Fallin declared a state of emergency for all 77 Oklahoma counties due to extreme or exceptional drought conditions. The executive order allows state agencies to make emergency purchases related to disaster relief and preparedness, and is a first step toward asking for federal assistance...
The country's cattle, turkey and chicken producers have been among those hardest and most directly hit by a more than 50 percent surge in corn futures since mid-June, which has inflated costs and squeezed profits.
Their lobby groups banded together on Monday to seek a first-ever waiver from the U.S. Environmental Protection Agency for a one-year reduction or suspension in the U.S. ethanol mandate, which in essence requires that more than a third of the U.S. corn harvest be used for motor fuel.