EPA Decision Raising Ethanol Blending Level Disappoints ProducersEPA Decision Raising Ethanol Blending Level Disappoints Producers
The National Pork Producers Council (NPPC) has expressed strong displeasure with the Obama administration’s decision to permit more vehicles to use gasoline blended with 15% ethanol
January 24, 2011
The National Pork Producers Council (NPPC) has expressed strong displeasure with the Obama administration’s decision to permit more vehicles to use gasoline blended with 15% ethanol.
The Environmental Protection Agency (EPA) said Friday it would permit the use of the higher blend rate, up from the current 10%, for model year 2001 and newer automobiles.
“It’s very disappointing that the administration made this decision given the rising price of corn and the lower estimate for this year’s corn harvest that was recently announced,” says Randy Spronk, hog and crop farmer from Edgerton, MN, member of the NPPC board of directors and chairman of the council’s Environment Committee.
Last week the U.S. Department of Agriculture revised down by 5% the U.S. corn harvest for 2010 and reported that corn carryover was the lowest on record. The national corn carryover now is expected to be less than three weeks.
NPPC strongly opposes the blend rate hike because it will place further upward pressure on corn supplies, increasing producers’ cost of production and subjecting them to regional corn shortages, but also reducing supplies. Smaller supplies also would elevate the potential catastrophic risk to producers from any seasonal weather event.
NPPC on Nov. 9 joined other livestock groups in filing a federal lawsuit against EPA over its decision to raise the blend rate to 15%, contending the agency exceeded its authority in granting a partial waiver of the Clean Air Act. Under this law, EPA may only grant a waiver for a new fuel additive if it will not cause or contribute to a failure of any emission control device or system. EPA has admitted that E15 can cause harm to some older vehicles.
“EPA’s decision means more corn will be used for ethanol production and that means the price on a shrinking supply will rise,” Spronk says. “We don’t want a repeat of a couple of years ago when, due mostly to high feedgrain prices, pork producers lost an average of almost $24 a hog over a 28-month period, and the industry lost nearly $6 billion. We saw a lot of family farms go out of business during that time.”
The American Meat Institute (AMI) also weighed in against EPA’s decision to allow a 50% increase in the amount of ethanol permitted in gasoline.
“Increased pressure on the corn supply has again pushed corn above $6.00 a bushel, levels not seen since 2008,” says AMI President and CEO J. Patrick Boyle. “This announcement only means that more corn will be diverted from an already thinning supply and increased pressure will be put on the meat and poultry sector which is already facing near record high feed costs. For consumers who are concerned about food prices, this decision will further increase prices at the grocery store. Burning our food and feed as fuel is not a sustainable approach to solving this country’s long-term energy needs.”
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