Indiana Grain Company, LLC

Posted: 10/07/11

By: tomgrisafi

According to an interesting report from our friends at Ethanol Producer Magazine, more corn may soon be directed to ethanol production.

From the report:

A coalition of seven ethanol and agricultural organizations responded swiftly in opposition to a bill introduced in the U.S. House of Representatives, that seeks to alter the renewable fuel standard (RFS) by linking the corn supply to the requirements for corn-based ethanol. The Renewable Fuel Flexibility Act was introduced by Reps. Jim Costa, D-Calif., and Bob Goodlatte, R-Va. The goal, they said, was to give relief to livestock producers, dairymen and consumers. “The renewable fuel standard has been incredibly successful in replacing a portion of the oil we import with home-grown energy, and I continue to support RFS. But our continued reliance on corn-based ethanol has impacts,” said Rep. Jim Costa. “While ethanol is not the only factor I am convinced it is a factor in the high prices farmers pay for feed and consumers pay for food.”

Industry supporters came together immediately, sending a letter to the bill’s creators on Oct. 5, the same day it was introduced. It was signed by the American Coalition for Ethanol, the American Farm Bureau Federation, Growth Energy, National Corn Growers Association, National Farmers Union, National Sorghum Producers and the Renewable Fuels Association. “The U.S. ethanol industry is an integral part of job creation and economic opportunity throughout rural America,” NCGA President Garry Niemeyer said. “This legislation would put progress made by the ethanol industry in jeopardy and we are asking members of Congress to oppose its passage.”

The letter pointed to a July 2011 analysis completed for the International Centre for Trade and Sustainable Development, which found that corn prices would have been exactly the same in 2009-’10 and only 18 cents a bushel lower if both the RFS and Volumetric Ethanol Excise Tax Credit had not existed. In addition, most of the 18 cents was attributed to VEETC. “Thus, implementing an RFS waiver trigger based on the stocks-to-use ratio will not have the effects on corn prices desired by livestock and poultry interests,” the letter said.

Source: Ethanol Producer Magazine

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