EPA Considers Ethanol Waiver: Too Little, Too Late?

As the EPA’s thirty day comment period on a prospective Renewable Fuel Standards waiver draws to a close, its not just those in the agricultural community who will soon see this administration’s efforts for exactly what they are: too little, too late.

The comment period was announced on August 20 after the governors of both Arkansas and North Carolina submitted official requests that the agency waive the ethanol volume requirements set forth in the Clean Air Act.  Those requests came on the heels of heavy public pressure for the same, and amid the last few months of the most trying growing season the United States has seen in more than fifty years.  The EPA is expected to hand down its final decision within 90 days, but even a full waiver would provide little solace this late in the game.

Corn ethanol production has been in direct competition with livestock producers since the industry was boosted by the ethanol volume requirement now under review.  During normal crop years this competition causes notable, but manageable increases in feed prices.  But in a year like 2012, when harvest reports are coming in so low the USDA is spurred to declare more than half of the country’s farming counties disaster areas, it becomes a crippling draw on the nation’s corn supply.

Producers — especially in the cattle and swine industries — have been struggling under severe drought and eight dollar per bushel corn prices for months, and that hardship is soon to show up in a big way in grocery stores across the nation.  Beef, already proving too expensive for many families in even its cheapest forms, will be the hardest hit and longest to recover.  Coming into 2012 the national cattle herd was already at its lowest in decades, and this summer’s drought and poor crop expectations have only compounded that problem, leaving cattle numbers another three-percent lower by August of this year with greater cuts expected in the months to come.

Whatever the decision, one thing is for sure: a reminder of just how overdue this action was will remain well into the next administration’s term, both in America’s farming communities and its grocery stores.

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