Ag Policy Blog
Todd Neeley DTN Staff Reporter

Wednesday 10/30/13

Lawmakers, Food, oil Interests Call for RFS Change

A bipartisan group of more than 130 U.S. lawmakers led by Rep. Bob Goodlatte, R-Va., is asking U.S. Environmental Protection Agency Administrator Gina McCarthy to adjust down the Renewable Fuel Standard, in a letter sent to McCarthy Monday.

"Unfortunately, despite the best intentions of the RFS, its premise and structure were based on many assumptions that no longer reflect the current market conditions, and the imposition of the 2014 volumes now threatens to cause economic and environmental harm," the letter states.

In an email sent out to ask lawmakers to sign on, it lists a number of interest groups supporting a change to the RFS including the American Meat Institute, the American Petroleum Institute and a number of other poultry, dairy and taxpayer groups.

"As you are aware, the U.S. corn market has been increasingly volatile since the expansion of the RFS in 2007," the letter states.

"This reflects the reality that more than 40% of the corn crop now goes into ethanol production, a dramatic rise since the first ethanol mandates were put into place in 2005.

"While well intentioned, the rigid nature of the federal law has not allowed it to change as new realities emerge in the market place. Ethanol now consumes more corn than animal agriculture, a fact directly attributable to the federal mandate.

"Due to the dramatic expansion of corn ethanol, volatile corn prices have led to the conversion of millions of acres of sensitive wetlands and grasslands into production."

The RFS mandates the uses of 18.15 billion gallons of renewable fuels in 2014.

The letter said rising ethanol mandates and declining gasoline demand has "exacerbated the onset of the E10 blend wall -- the point at which the gasoline supply is saturated with the maximum amount of ethanol that current vehicles, engines, and infrastructure can safely accommodate."

Tom Buis, chief executive officer of Growth Energy, said supporters of scaling back the RFS have paid little attention to current market conditions.

"It appears that the ‘cheap corn caucus’ is back at it again, looking for ways to get below the cost of production corn at the expense of American farmers, American energy security, consumer choice and savings at the pump," Buis said in a statement.

"Despite false claims that biofuels are increasing the cost of corn, those who signed this letter failed to review the facts and recognize that just yesterday corn was trading at a 37-month low. Food conglomerates have enjoyed increased profit margins thanks to rising retail prices that are outpacing farm costs. During the 2012 drought, the farm value of chicken increased about 2 cents per pound compared to 2011.

"Wholesalers and retailers, such as fast food restaurants, increased their prices by about 13 cents per pound. Consumers paid an additional 8% -- leading to higher profit margins for the food industry.

"For instance, Tyson Foods, the largest U.S. meat processor, is predicted to report a 37% gain in profit to $797.6 million in 2013.

"While this is no surprise, it is clear that this letter is playing to the special interests of big oil and big food. With corn trading at a three year low, have food companies passed along any savings to consumers?"

Follow me on Twitter @toddneeleyDTN

Posted at 11:23AM CDT 10/30/13 by Todd Neeley
Comments (31)
Do your best to fight the ethanol idiocy by only buying diesel powered vehicles and machinery.
Posted by Wesley Kuster at 12:15PM CDT 10/30/13
Sorry WEs. Buying the dirtiest and most expensive fuel is not very smart.The cheap corn coalition has you saying just what they want you to say.Ethanol has made the midwest the strongest economicaly and helped clean the air you breath. If you think the entire c0rn and soybean acres should be farmed at a loss you must be a dreamer. Goodlate should not be pretending to be a US Rep .rather than a lobbyist for the oil and food companies.
Posted by melvin meister at 3:35PM CDT 10/30/13
Hey Wessley, buy an electrical vehicle and do away with oil insanity, my Leaf now has 17000 fossil free miles and no oil changes
Posted by Jay Mcginnis at 5:01PM CDT 10/30/13
I see my two favorite trolls are out. Jay, did you charge that car up with your own home grid solar panel system? And I would like to see you cruising around Montana in any average January here.
Posted by CRAIG MOORE at 8:39AM CDT 10/31/13
You overlooked" organic, loacally grown"solar panal system, Craig.
Posted by Bonnie Dukowitz at 2:08PM CDT 10/31/13
Ethanol may have made the Midwest economy strong, but with corn around 3.80 it could turn into a bust. High land and machinery prices have never worked with cheap grain prices. Ethanol has created nothing but instability.
Posted by GWL 61 at 4:09PM CDT 10/31/13
Why yes I did Craig, my solar is grid connected, I run my geothermal heat and air, my home, my shops and my grain system to still get a check from the electric company at the end of the year. Prices now are under $1 per watt for solar panels, what era are you living in???? More "tea" denial?
Posted by Jay Mcginnis at 7:10AM CDT 11/01/13
Jay, since this article is discussing tax subsidies, how about you disclose just how much in tax subsidies you received on your geothermal and solar power systems. And I also assume you received a tax credit on your electric car as well.
Posted by Dan Peters at 9:34AM CDT 11/01/13
Now that Bonnie is here, got my favorite 3. Jay, where you located at. I want to look you up on the net to check you honesty. City and state is good enough. And while you are at it, answer Dan's post.
Posted by CRAIG MOORE at 2:15PM CDT 11/01/13
Craig ;This is not about smart put downs .Todds reporting is trying to inform you without any political agenda.This issue is about market share for the oil companies. Big corporate livestock producers have always wanted inputs below the cost of production, mainly corn and other coarse grains. If you think I"m a troll ;sorry. I speak from 55 yrs. farming experiance and 12 as farm managment in retirement. You insult people without even knowing them . Thanks Todd ;Please keep us informed.
Posted by melvin meister at 8:06AM CDT 11/02/13
Since oil companies are offering a vastly superior product they deserve near total market share. Government has no business forcing us to buy inferior products. For those who choose to use inferior products let them be free to decide.
Posted by Alvin Obert at 6:32AM CST 11/03/13
Your superior product Alvin is destroying our planet with not only carbon, spills in the ocean, spills on farmland BUT also worthless wars in the Mideast, a need to maintain military presence in the oceans and lands of the mideast not to mention it will run out! Your superior product has far more government subsidy then renewables and hey all you Tea totters, my subsidies came from tax write offs, aren't you for wealthy people NOT paying taxes? With the money I save i can create a job for you, aren't you lucky???? But thanks Alvin for the fact i don't need to buy one more gallon of oil for my house or car and keep sending your money to the electric company so they can pay me for my electricity I generate!!! Keep loving your superior products!!!
Posted by Jay Mcginnis at 7:36AM CST 11/04/13
How primitive would our lives be without oil, and living under your ideology Jay?
Posted by GWL 61 at 12:06PM CST 11/04/13
Jay Still waiting for city and state or don't you have the guts for someone to find out what you really are. And apparently your are proud of the fact you are having all the other taxpayers in the US help pay for your equipment that you make money on, very tea party of you.
Posted by CRAIG MOORE at 4:00PM CST 11/04/13
Try some of that education Jay - see
Posted by Alvin Obert at 7:27PM CST 11/04/13
I assure you Craig, i don't get nearly what farmers get and my life is not primitive
Posted by Jay Mcginnis at 6:28AM CST 11/05/13
Now Jay, I recall you contributing information, stating you were a farmer, on a long time family farm in the Ohio area. Are you double dipping or do you lead a double life? I do not care what you drive, just do not dump the batteries in our local river when they expire.
Posted by Bonnie Dukowitz at 6:40AM CST 11/05/13
Bonnie, Not letting Jay dump his old battery in your local river violates the ideology of a hands off government and his redneck perceived god given freedom to destroy the environment. I trust you are not just another nature loving RINO!? :-) Alvin, I love the progress that oil has allowed us to achieve, but the overall cost to nature and human sacrifice is immeasurable. If each gallon truly reflected its cost of bloodshed and destruction to our Earth, I would guess you would be endorsing an entirely different form of energy.
Posted by Don Thompson at 8:42AM CST 11/05/13
I guess you have not heard Don that oil is renewable source of energy. See
Posted by Alvin Obert at 9:04AM CST 11/05/13
Jay See you don't have the guts to reveal yourself for what you really are. Anytime you want to look me up I am Craig A. Moore in Billings, Montana. I don't expect to here from you you gutless SOB.
Posted by CRAIG MOORE at 9:35AM CST 11/05/13
Just trying to point out, Don, an arrogant, narrow minded, attitude is sometimes a larger problem than what one is claiming to have solved.
Posted by Bonnie Dukowitz at 1:35PM CST 11/05/13
Dec and Jan. Ethanol futures at $1.58 and falling what are you bloggers fighting about. There is no better deal than this.Toxic oil is over priced. 10 and15% ethanol will not hurt your dear little engines.
Posted by melvin meister at 8:31AM CST 11/06/13
Arrogant, narrow minded? Who are you referring to, Bonnie? It seems Jay has taken the problem into his own hands and made a difference. I heard Einstein was arrogant, but them so was Rumsfeld and Cheney!? I see your point.
Posted by Don Thompson at 8:33AM CST 11/06/13
You seem to make my point, Don. Jay has made a difference. The question though, is it a positive or a negative after all factors? Getting sound, unadultered research rather than an agenda is what is getting difficult to obtain. Destroying mountains with diesel power all over the world to obtain rare earths for batteries, which are hazardous waste after normal use, does not make sense to me.
Posted by Bonnie Dukowitz at 8:09PM CST 11/06/13
Bonnie, Batteries are recyclable and the sun will have to be shining all the time for life as we know it to continue. Sunshine is still "free". What do you think about the missing mountain tops around the country for coal mining plus oil and gas exploration? We have yet to pay the full price for that. I enjoy the benefits of so called cheap fossil fuel but the entire cost has not been paid.
Posted by Don Thompson at 6:43AM CST 11/07/13
The entire cost of renewable energy can't be overlooked either. The continued ripping up of native grasslands and pastures and marginal farmland, just to try and raise corn on, will have an effect on the environment too. Greed has taken over common sense. Ethanol is leading the way to this craziness in trying to farm every acre of ground.
Posted by GWL 61 at 9:13AM CST 11/07/13
Where did Jay go?
Posted by CRAIG MOORE at 10:18AM CST 11/07/13
Craig, I will not participate in blogging with people that resort to name calling and personal attacks.
Posted by Jay Mcginnis at 4:56PM CST 11/07/13
While some of you resort toname calling Bob Goodlate becomes a lobbyist for the most profit minded corporate entities inthe world.He sits on the ag commitee while atacking the most sucsessful rural program that has brought the midwest into the 21st century economically. $4.oo corn is not funny and you should be calling your Sen. and at least call out the API lies. Nebr Sen. and Reps. are silent as the cowards they are 'maybe yours are better.Call them.
Posted by melvin meister at 11:11PM CST 11/07/13
Call Monsanto too, with corn around 3.50 now, there seems to be no retraction with the seed corn prices for next year. The profit taking doesn't stop with what's mentioned in the above blog.
Posted by GWL 61 at 7:53AM CST 11/08/13
Jay Not calling you names won't get me your info. Just showing you have no guts, integrity or ability to show you are what you pretend to be.
Posted by CRAIG MOORE at 12:26PM CST 11/11/13
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