Livestock-state Democrats plan to request waiver of ethanol mandate

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, August 1, 2012

Several Senate Democrats from livestock-producing states are considering asking U.S. EPA to waive the federal ethanol mandate in light of soaring corn prices.

Sens. Chris Coons of Delaware, Kay Hagan of North Carolina, Ben Cardin of Maryland and Mark Pryor of Arkansas all said yesterday that they were discussing sending a letter to EPA Administrator Lisa Jackson with such a request. An industry source also said that Democratic Sens. Dianne Feinstein of California and Tom Carper of Delaware were considering asking for the waiver.

“We’re working every strategy we can to deal with disruption to the food chain as a result of the high price of corn,” Cardin said yesterday. “And obviously, the guaranteed market for ethanol puts additional pressure on the corn price, which is causing a serious problem in the poultry industry.”

While there have been calls from the House and livestock industries for a waiver from corn ethanol mandates to help producers during the drought, the Senate has been more muted so far in calling for action from EPA.

The four senators yesterday expressed urgency in finding a way to provide relief to beleaguered livestock industries. Corn priced at more than $8 a bushel has driven up the price of livestock feed, which livestock industries warn will soon force them to reduce the size of herds and flocks.

“If you look at the price of feedstock and the fact that you’ve got such a drought going on in the Midwest, and how that’s impacting the cost of feedstock for poultry, for all of the animals,” Hagan said, “and I think 40 percent of the corn crop is now going into ethanol, there’s a big issue there from a cost perspective.”

Hagan’s state is the second-largest producer of swine in the nation. Delaware, Maryland and Arkansas are heavy poultry states; Arkansas is also home to a large beef industry.

Ethanol groups have blamed the weather, oil prices and speculation for the current high corn prices and note that while 40 percent of the corn crop goes toward ethanol, much of that is recycled back into the feedstock system as distiller’s grain.

The federal renewable fuel standard mandates that the country produce 13.2 million gallons of corn ethanol this year. Earlier this week, a coalition of livestock groups formally petitioned EPA for an up to one-year waiver from the requirements (Greenwire, July 30).

Rep. Bob Goodlatte (R-Va.) has also called for a waiver and last week said he was working on a letter to EPA.

Coons, who is organizing one Senate letter to EPA, said yesterday that he is also working with Republicans on the measure but did not name any specific lawmakers. A spokesman for his office later said that the actual letter has not yet been drafted.

The senators said yesterday that they were looking at a variety of options, including the waiver, to help with livestock industries’ woes.

“Our livestock industry obviously is hurting. We have a lot of our farm ponds for cattle and chicken operations totally dry now,” Pryor said. “So we’re looking at things to see if we could figure out ways to help. But the letter is one thing that we’ve been discussing.”

Cardin said he believes that the renewable fuel standard needs a more permanent change than just a waiver. Last month, he filed a companion bill to legislation introduced last year by Reps. Goodlatte and Jim Costa (D-Calif.) that would lower the ethanol mandate when corn supplies dipped below a certain level.

“I think our policy towards corn ethanol needs to be changed,” Cardin said yesterday. “I’m for renewable fuel standards, but I think the ethanol standards on corn is causing huge problems.”