What is in this article?:
- Sounds like a good deal for grain growers and a bad one for livestock producers and consumers, but are such high prices really good for any of us?
- Allan Baucom says the last thing any reasonable grain farmer would want to do is to put a livestock producer out of business. “They are our customers, our neighbors, our friends, and historically our most reliable partners in agriculture.”
Basis for business decisions
As to taking of grain for use in ethanol production, the North Carolina grower says the political arena created a mandate for corn for fuel. An infrastructure was developed and grain growers made business decisions based on this mandate, Baucom says.
“Why in the world does the same political arena think they have the right to change the rules, based on one set of criteria,” he asks?
“Ultimately agriculture, as a whole industry, is in this current predicament together. The different segments of the industry have to learn to work together better, rather than make political moves that may provide a temporary benefit to one segment, but a long-term detriment to the whole industry, the North Carolina grower adds.
Political involvement in the food-fuel-feed controversy reached a milestone of sorts in August when Governors Beverly Perdue of North Carolina, Nathan Deal of Georgia, John McDonnell of Virginia, Rick Perry of Texas and Mike Beebe of Arkansas filed petitions with the EPA to suspend the ongoing Renewable Fuels Standard mandate for corn-based ethanol production.
Though most people on both sides of the issue may think the Governors Perdue and Beebe acted in unison, that may not be the case and there may be some collateral damage to soybean growers because of some of the language endemic to Governor Perdue’s petition request.
Charles Hall, executive director of the North Carolina Soybean Growers Associations says, “I noticed that Gov. Perdue specifically mentioned soybeans and biodiesel. I thought EPA was seeking comments on corn ethanol, so I was a little surprised to see soybeans included in the governor’s request to wave the RFS volume “in whole” and not just the ethanol portion.
“If the request is granted, that would obviously have implications for the biodiesel industry, and I’m not sure biodiesel is really under much scrutiny or that a waiver of the biodiesel portion is needed,” Hall says.
Also, Gov. Beebe from Arkansas only specifically mentioned corn ethanol in his letter and did not address soybeans and soy biodiesel. So there are some differences in the two governors’ requests, he adds.
“I hate to see biodiesel tarred with the same brush as ethanol. There are some fundamental differences on the feedstock supply side. Soy biodiesel doesn’t divert soybeans away from one intended use and allocate it to another. The biodiesel plants use soy oil, one component of the bean, as the feedstock. The soy meal, the other component, goes to livestock feeding as always,” Hall says.
Under the 2005 U.S. Renewable Fuels Standard, a certain volume of the nation’s transportation fuel must be blended with such non-fossil fuels as ethanol, which is distilled primarily from corn. This year’s ethanol requirement is 13.2 billion gallons, up from 12.6 billion gallons in 2011. That figure is set to grow to 13.8 billion gallons in 2013.
Overall, the law aims to increase total use of renewable fuels in the U.S. to 36 billion gallons in 2022 from 9 billion gallons in 2008, according to the Renewable Fuels Association.