As feed prices rise, ranchers press EPA to waive Ethanol Mandate

National Cattlemen’s Beef Association

In an attempt to bring relief to rural America, which is suffering from the worst drought in more than 50 years, the National Cattlemen’s Beef Association (NCBA) today filed official comments urging Environmental Protection Agency (EPA) Administrator Lisa Jackson to waive the Renewable Fuel Standard (RFS) mandate for the production of corn ethanol.

“NCBA’s membership supports the American ethanol industry and we are committed to energy independence. However, this energy commitment has created challenges for America’s cattlemen and women now more than ever due to the current drought plaguing 70 percent of cattle country,” said NCBA President J.D.
Alexander, a Nebraska cattleman and corn grower. “The production of ethanol from our main feedstock – corn – is significant to the cattle industry because of its impact on its availability and on corn prices. Our membership strongly opposes mandates on production and is simply asking for a level playing field when competing for a bushel of corn.”According to the comments submitted by NCBA, the October 2012 U.S. Department of Agriculture (USDA) crop report estimates that corn production is forecast at 10.7 billion bushels, down slightly from the September forecast and down 13 percent from 2011. According to the report, if the projections are realized upon harvest, this corn yield will be the lowest since 1995.

“The single most challenge for all of agriculture is Mother Nature. Coupled with an inflexible mandate the federal government adds another level of uncertainty into a market place that is not market-driven,” said Alexander. “This further shows the need for Administrator Jackson to use the authority granted by Congress and waive the mandate for corn ethanol production.”In the comments, NCBA stated that the cattle industry, along with other livestock groups, has suffered a significant economic impact due to the RFS mandate and the drought. From December 2007 to August 2012, the cattle feeding sector of the beef industry lost a record $4 billion in equity due to high feed costs and economic factors that have negatively affected beef demand. According to USDA reports, corn prices have increased about 60 percent since June 15, 2012, and the near futures price is hovering around $8 per bushel. In a report by USDA’s Economic Research Service (ERS), 2011 feed costs for livestock, poultry and dairy reached a record high of $54.6 billion – an increase of more than $9 billion over 2010 costs. The cost increase, according to Alexander, is not able to be passed along to the consumer and is absorbed by cattle producers.

“This trend is not sustainable for the beef industry and our government policies need to be evaluated in a manner that considers economic impacts on all users of corn, not just the ethanol industry,” he said. “We are looking at the smallest cow herd since 1952, and if input costs continue to increase, we do not expect this trend to turn around in the next several years.”


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