More E15 reaction: Farm Bureau & Conrad for; Cattlemen warn of feed cost impacts

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, Oct. 13 – Reacting strongly to Wednesday's E15 ethanol waiver, the National Cattlemen’s Beef Association (NCBA) called the EPA decision “yet another example of adding financial burdens to all users of corn.” NCBA points out that replacing the current E10 limit with E15, a 15% blend of ethanol with gasoline, is “a 50 percent increase from the currently permitted level.”

The American Farm Bureau Federation (AFBF), however, welcomed EPA's E15 ruling as “a step toward strengthening America’s commitment to home-grown energy.” AFBF President Bob Stallman commented that “Ethanol is a clean-burning, home-grown renewable fuel. Increasing the percentage of ethanol in the domestic gasoline supply moves our nation one step closer to greater energy independence. It also promotes job creation in rural America.”

In contrast, NCBA President Steve Foglesong reacted this way: “Corn ethanol production is significant to the cattle industry because of its impact on feed grain prices. NCBA’s members strongly oppose mandated production and increasing government intervention that artificially inflates the cost of feed ingredients. This waiver is a step closer to more government mandates.”

Warning of price impacts, Foglesong points out that “From December 2007 to February 2010, the cattle feeding sector of the beef industry lost a record $7 billion in equity due to high feed costs and economic factors that have negatively affected beef demand. Between 2005 and 2008, corn prices quadrupled, reaching a record high of more than $8 a bushel.”

Foglesong, an Illinois beef producer, warns that the EPA waiver “will likely result in higher feed costs for livestock producers and all users of corn. While the current economic situation has taken a severe toll on the beef industry, it remains our number one responsibility to provide the world’s consumers with the safest, most nutritious and affordable beef and beef products. U.S. renewable energy policies need to be evaluated carefully in order to determine the potential consequences the policies could have on all corn end-users from importers to livestock producers.”

Farm Bureau notes that “In March 2009, Growth Energy and 54 ethanol manufacturers filed a petition with EPA urging an increase in the cap on the ethanol blend rate from 10 percent to 15 percent. Farm Bureau and a diverse coalition of renewable energy supporters joined the group in pressing government officials to do everything in their power to expedite the approval process for E15.” Stallman says “EPA must now follow up on this first effort to reaffirm America’s commitment to biofuels.”

Without directly addressing livestock producers' concerns about sharply higher feed costs if there is a significant increase in ethanol production, Farm Bureau makes the point that currently “The primary source of ethanol is corn, but other grains or biomass sources may be used including sorghum, corn cobs, cornstalks and switchgrass.”

Sen. Kent Conrad (D-ND) lined up alongside Farm Bureau Wednesday, calling the E15 ruling “a step in the right direction to lessen America's dependence on foreign oil.” He echoed Farm Bureau in noting that impacts on corn should gradually diminish since ethanol “can also be made from other types of biomass such as wood, crop residues, or grasses.”

Conrad said “America is spending more than $700 million a day on imported oil. It is time we turned away from the oil fields of the Mid East and turned instead to the farm fields of the Mid West for our energy needs . . . It is vital to our nation's future that we lessen our dependence on foreign oil, while aggressively pursuing alternative sources of energy such as ethanol.”

For Stewart Doan's audio on EPA's E15 split decision, go to: www.agri-pulse.com/Audio-Thursday.asp