Southern governors call for waiver of Renewable Fuels Standard

Citing high prices resulting from a historic drought and heat wave which threatens to decimate this year’s corn crop in the Midwest, North Carolina Governor Beverly Perdue has joined with Arkansas Governor Mike Beebe to call for a federal suspension of the ongoing Renewable Fuels Standard mandate for corn-based ethanol production.

Corn prices recently topped an all-time high at $8.28 per bushel and some agriculture economists contend prices may reach $10 a bushel and stay in that range for some time.

Much of the Midwest corn crop produced without irrigation is a total loss.

Though irrigated crops are likely to produce an average crop, there is mounting concern over the safety of feeding grain exposed to heat and drought to livestock.

The overall agreement is that corn for feed will be in short supply and perhaps simply not available to livestock producers at its current price.

In her Aug. 14 petition to the federal government, Governor Perdue contends, “The government mandate requiring a certain volume of ethanol production is causing "direct harm" to the livestock industry, increasing the cost of producing food and depleting already severely stressed grain supplies."

The EPA-enforced Renewable Fuel Standard requires about 15 billion gallons of ethanol, most of which is derived from corn, to be blended into gasoline this year. Prior to this year’s severe drought, the USDA estimated that as much as 40 percent of this year’s projected 92 million acre corn crop would go into ethanol production this year.

The efforts of the North Carolina and Arkansas Governors follow similar, though less publicized appeals Governor Martin O’Malley from Maryland and Governor Jack Markell of Delaware, sent to EPA officials. Both Maryland and Delaware are among the nation’s leaders in poultry production.

In their Aug. 9, letter to the EPA, the governors stated, “Given the likely impacts to the poultry industry, not to mention the increased cost of food for consumers, of this dramatic increase in price due to the under-supply of corn, it is hard to imagine any scenario when exercising your authority would be more appropriate.”

The ethanol industry was quick to counter the requests of Governors Perdue and Beebe. In a sharply worded plea to federal authorities, the RFA (Renewable Fuels Association) said, “The Environmental Protection Agency should reject Governor Perdue’s waiver request out of hand. While this drought has caused stress in many agricultural communities, it has not caused the kind of widespread economic harm that is the threshold for EPA to act.