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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.

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.

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.

dinopello wrote:The US might also decide whether it wants to do some water infrastructure projects to help mitigate the effects of drought in our bread basket. Like store water when/where it rains and transport it to where it is needed. I wonder if Oklahomans would accept such a big government project being as how they are the independent, wild west types. Maybe the private sector will do it ?

Dams tend to exterminate wildlife by destroying their habitat (but no photogenic piles of dead oiled ducks like the Tar Sands). You'll need lots of EPA waivers to keep you in SUVs, beer & Cheetos.

As the US Corn Crop Withers, Ethanol Markets Soar, and Then Slip

These are the times that ethanol opponents warned about.

dinopello wrote:Anyway, who said anything about dams?

dinopello wrote:

Dams tend to exterminate wildlife by destroying their habitat (but no photogenic piles of dead oiled ducks like the Tar Sands). You'll need lots of EPA waivers to keep you in SUVs, beer & Cheetos.

Beer will be with us until the end times. The others I can do without. You really have a problem with beavers I see.

Keith_McClary wrote:

dinopello wrote:Anyway, who said anything about dams?

"Like store water when/where it rains" - Were you thinking plastic bottles?.

dinopello wrote:How long does corn meant for ethanol keep in a silo ?

(Reuters) - Rain and cooler temperatures in the drought-stricken U.S. Midwest crop belt will provide relief for late-season soybeans, but the change in the weather is arriving too late to help the already severely damaged corn crop, an agricultural meteorologist said on Wednesday.

"It's definitely better than what we've had but I'd be hesitant to call it a drought-buster. Longer-term outlooks still look like a return to warm and dry," said Jason Nicholls, meteorologist for AccuWeather.

Commodity Weather Group (CWG) on Wednesday said about one-third of the Midwest soybean crop could remain under significant stress from lack of moisture.

CWG also said the popular weather models on which forecasts are based were in some disagreement on Wednesday about the amount of moisture the Midwest is likely to receive over the next couple of days. The dueling forecasts led to some skepticism that significant rains would fall.

Relentless heat and drought have slashed prospects for the U.S. corn crop to a five-year low. The supply of corn next year is expected to fall to its lowest level in nearly 20 years.

The U.S. Department of Agriculture (USDA) on Friday will release its August crop report; traders were bracing for the worst.

U.S. soybean inventories could fall to their lowest level in 32 years as the drought continues to trim U.S. soybean production prospects.

http://www.reuters.com/article/2012/08/ ... I320120808