American Farm Bureau caught in crossfire over biofuels

Source: By Zack Colman, The Hill • Posted: Wednesday, October 24, 2012

Tensions among ranchers and farmers might lead the nation’s largest farm lobby to alter its position on the federal biofuel mandate.

The American Farm Bureau Federation has been a staunch supporter of the renewable fuel standard (RFS), a mandate for blending biofuels — currently, mostly corn-based ethanol — into traditional fuel. The rule has been a boon for the nation’s corn-growers, who have a guaranteed customer for 40 percent of their crop.

But ranchers say the biofuel mandate needs to be waived this year in the wake of a summer drought that has pushed corn prices to record highs. Several governors have asked the Environmental Protection Agency to waive the rule to ease the price crunch.

The Farm Bureau, which represents a broad range of agricultural interests, finds itself caught in the crossfire, and could alter its position on the fuel standard if state chapters vote to do so.

“I do think it will be a discussion,” said Andrew Walmsley, director of congressional relations at the Farm Bureau. “I could possibly see a tweak or two to our policy, or a clarification, but I don’t think we’ll have a wholesale change.”

The Farm Bureau notably declined to join the biofuels industry’s new coalition, Fuels America, out of sensitivity to the views of ranchers, Walmsley said. That upset backers of biofuels who want the organization to be a more vocal defender of the fuel standard.

“We definitely try to handle it delicately,” Walmsley said of the relationship between corn growers and meat producers. “It does make it somewhat difficult to work with our producers who produce biofuels.”

Michael Frohlich, a spokesman with the biofuels industry group Growth Energy, called the Farm Bureau’s comments “very curious eleventh-hour political posturing.”

“If they are trying right now at this point to open up, going on the record saying [that] we’re upset they’re not part of our coalition — I find that curious, why they feel the need to get out in front of this when they’ve been strong supporters,” Frohlich said.

Ranchers and poultry producers say the renewable fuel takes away corn supplies that would otherwise be available to them.

“We’re more than willing to compete. We just want to compete on a level playing field,” J.D. Alexander, president of the Nebraska Cattlemen’s Beef Association, told The Hill.

Biofuels proponents counter that the rule incorporates enough flexibility to respond to price shocks, and argue meat producers already purchase a sizable portion of biofuel byproducts to use in feed.

Walmsley said the Farm Bureau’s support for the renewable fuel standard is up to the group’s members. Each state chapter will send delegates to the bureau’s convention in January, where votes will be held to determine a policy platform.

The position of the state chapters on the biofuel mandate is likely to vary by region, according to Walmsley. Pressure to change the group’s position is likely to be stronger in the Southeast, where large poultry and livestock operations reside, than in the Midwest, which grows more corn.

“We are able to change, but I liken us to an old battleship. It takes awhile to turn a ship, but sometimes that’s good. There’s steadiness,” Walmsley said.

The Farm Bureau’s state chapter in Georgia is among those weighing whether to back the fuel standard.

Don McGough, the chapter’s director of commodities and marketing, said the chapter supported the fuel standard last time around, but that might change now that Georgia Gov. Nathan Deal (R) has requested a waiver from the mandate, citing high corn prices that have burdened the state’s cattle and poultry industries.

“Certainly it’s getting attention because of the increased cost of corn to feed livestock and poultry,” McGough said. “It is, like most issues, one that’s got two sides. And depending on where you sit, you may have a difference of opinion.”