Mineral Wells Index, Mineral Wells, TX

Online Only

August 5, 2012

Amid a drought, does it still make sense to use corn for fuel?

The biggest U.S. drought in half a century is devastating farms across the Midwest. Crops are wilting. Food prices are on the rise. Under the circumstances, then, does it still make sense for the government to divert a hefty portion of the nation's corn output into making fuel?

Some groups are starting to ask exactly that question. This week, a coalition of U.S. meat and poultry producers called on the Environmental Protection Agency to relax its corn-ethanol program for one year. The producers argued that the heavy use of corn for fuel is driving crop prices even higher at the worst possible moment. (The EPA denied a similar request from Texas Gov. Rick Perry in 2008.)

"America's pork producers are extremely worried, given the drought affecting much of the corn-growing regions, about having feed for their animals," said Randy Spronk, president of the National Pork Producers' Council, in a statement.

It's not hard to see why they're worried: Under the EPA's Renewable Fuel Standard, U.S. refineries are required to blend their gasoline with a certain percentage of biofuel each year. The rule has helped the United States reduce its dependence on oil. But it also requires a lot of corn. In 2012, the standard will require 13.2 billion gallons of ethanol, which could consume as much as 40 percent of this year's already shrunken corn crop.

Meat and poultry producers get hit especially hard when the price of corn and animal feed rises. Many livestock producers have to respond by culling their herds to stem losses. In the short term, that leads to a drop in meat prices, which squeezes the industry further.

Yet corn growers and ethanol producers say it's too soon to panic. "With the crop still in the field, it is too early to determine this year's final corn supply," said Garry Niemeyer, president of the National Corn Grower's Association, replying to the petition. What's more, Niemeyer noted, the ethanol industry has a surplus of fuel right now, which can help offset the impact of the drought. Under the EPA's program, ethanol producers can carry over credits from year to year, giving them some flexibility to deal with shortages.

By and large, corn farmers benefit from the ethanol mandate during droughts, says Michael Roberts, an agricultural economist at North Carolina State University. Because the demand for corn stays so inelastic, the price tends to rise high enough that it offsets the losses farmers suffer from reduced crop yields. "It's ironic but corn farmers are actually going to benefit from the drought," Roberts says.

The real pain, by contrast, could be borne by the rest of the world. The United States is one of the world's biggest suppliers of corn, accounting for some 60 percent of global exports. A recent modeling study by the New England Complex Systems Institute (NECSI) found that the ethanol mandate, coupled with the drought, could soon push global food prices up to levels last seen in 2008, when food riots erupted in countries from Egypt to Haiti. "Reducing the amount of corn that is being converted to ethanol may address the immediate crisis," concluded NECSI.

Other experts, however, aren't convinced that the effects of relaxing the mandate would be quite so dramatic. A recent study by Bruce Babcock of Iowa State University found that completely waiving the renewable fuel standard for one year would reduce corn prices just 4.6 percent. That could provide a small boon to the U.S. livestock industry_providing a benefit of about $1 billion, by one estimate_but it's unclear whether it would be enough stem a possible food crisis overseas.

Regardless of the numbers, biofuels mandates are coming under increasing scrutiny. Last year, the World Trade Organization called on governments to pare back their ethanol laws, saying that they had increased food volatility around the world. Some scientists have argued that corn-based ethanol can actually be worse for the environment than gasoline if they indirectly drive deforestation. (Advanced biofuels made from non-foodstuffs, such as algae, are still not yet viable, though they're the focus of a great deal of research.)

And some members of Congress have criticized government support for ethanol as an outdated form of corporate welfare. Last year, for the first time in three decades, Congress allowed a tax credit for ethanol production to expire. The credit was worth $6 billion in 2011. At the time, the ethanol industry didn't put up much of a fight to preserve the credit_after all, the renewable fuel standard would ensure a continued market for their products.

But now even that standard is starting to come under attack. Earlier this week in the House, Reps. Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.) introduced a bill, supported by the livestock industry, that would relax the ethanol mandate by up to 50 percent when supplies are low.

 

1
Text Only
Online Only
  • VIDEO: Moose charges snowmobile, flees after warning shot

    While snowmobiling in New England, Bob and Janis Powell of Maine were charged by a moose and caught the entire attack on camera.

    April 21, 2014

  • Do your genes make you procrastinate?

    Procrastinators, in my experience, like nothing better than explaining away their procrastination: General busyness, fear of failure, and simple laziness are just a handful of the excuses and theories often tossed around. Now researchers from the University of Colorado Boulder have added another option to the list: genetics.

    April 21, 2014

  • Why do wolves howl?

    Of all the myths that dog the wolf, none is more widely accepted than the idea that wolves howl at the moon. Images of wolves with their heads upturned, singing at the night sky, are as unquestioned as a goldfish's three-second memory or a dog's color-blindness (both also myths).

    April 18, 2014

  • Smartphone kill switches are coming

    Smartphones need kill switches. It's a relatively easy solution to the pricey (and irritating) problem of smartphone theft. But who would have thought that the big carriers would team up with Apple, Google, Microsoft, Nokia, Samsung and lots of other manufacturers to voluntarily begin adding the technology by July 2015? The cooperative spirit! It makes so much sense!

    April 18, 2014

  • Biggest student loan profits come from grad students

    This week, the Congressional Budget Office projected that the federal government would earn roughly $127 billion from student lending during the next 10 years.

    April 18, 2014

  • Screen shot 2014-04-18 at 4.44.15 PM.png Paint, doodle and sketch: 3 apps for art lovers

    In the absence of a palette of watercolors and a sketchpad, these three apps can fill in as your art supplies of choice.

    April 18, 2014 1 Photo

  • touch.jpg Divorce is on the rise, and it's the baby boomers' fault

    A new paper from demographers at the University of Minnesota found that the age-standardized divorce rate has actually risen by an astonishing 40 percent since 1980.

    March 29, 2014 1 Photo

  • barbour021614.jpg No shows escaped death by Craigslist killer

    The young woman who says she was driven by satanic spirts to commit a cross-country murder spree over the last six years says authorities are not taking her claims seriously and that she tried to lured other central Pennslyvania men into her death snare with online companionship ads but they didn't show up.

    March 29, 2014 1 Photo 2 Stories

  • firefighters.jpg VIDEO: Firefighters sing song from 'Frozen' to calm girl stuck in elevator

    Firefighters in Reading, Mass., sing the Disney power ballad known by children everywhere -- "Let It Go" -- to calm a 4-year-old stuck in an elevator.

    March 29, 2014 1 Photo

  • dog-sunglasses.jpg Do animals have a sense of humor?

    Right now, in a high-security research lab at Northwestern University's Falk Center for Molecular Therapeutics, scientists are tickling rats. Their goal? To develop a pharmaceutical-grade happiness pill. But their efforts might also produce some of the best evidence yet that humor isn't something experienced exclusively by human beings.

    March 29, 2014 1 Photo

Featured Ads
Mineral Wells Index


Click on a photo to visit our SmugMug page

Front page
Seasonal Content
AP Video
Raw: Deadly Bombing in Egypt Raw: What's Inside a Commercial Jet Wheel Well Raw: Obama Arrives in Japan for State Visit Raw: Anti-Obama Activists Fight Manila Police Motels Near Disney Fighting Homeless Problem Michigan Man Sees Thanks to 'bionic Eye' Obama to Oso: We'll Be Here As Long As It Takes Bon Jovi Helps Open Low-income Housing in Philly Pipeline Opponents Protest on National Mall Hagel Gets Preview of New High-tech Projects S.C. Man Apologizes for Naked Walk in Wal-Mart New Country Music Hall of Fame Inductees Named 'Piles' of Bodies in South Sudan Slaughter SCOTUS Hears Tv-over-Internet Case Chief Mate: Crew Told to Escape After Passengers Iowa College Finds Beauty in Bulldogs
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Stocks
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Must Read