Nebraska Senate Delegation defends ethanol

Source: By Art Hovey, Columbus Dispatch • Posted: Tuesday, July 31, 2012

LINCOLN — It’s hard to find any green grass on either side of the fence, and Mike Johanns is for doing whatever it takes to get drought relief to ranchers in Nebraska and other states

But the state’s Republican senator made it clear in a conference call last week that he’s not for pulling back on the federal ethanol mandate to conserve corn for livestock use.

“What I’ve been telling people is that I really believe we should not act now on the Renewable Fuels Standard,” Johanns said. “We need to sit tight and see what this crop ends up looking like.”

More of the attention to the drought drama is swinging toward Washington because of the feed/fuel debate and because emergency help for the livestock sector is included in the House version of a farm bill that might not be acted on ahead of a scheduled Aug. 4 recess.

The drought’s impact on 2013 food prices also is getting closer scrutiny.

Congressional inaction is not acceptable to Sandhills rancher Susan Luebbe, whose growing list of woes includes shriveling pastures, a poor hay harvest, tumbling prices for the fall calf crop, and a range fire still on the loose in Keya Paha, Cherry and Brown counties.

“We need help yesterday,” Luebbe said.

In acknowledging the lawmaking situation in the House, Johanns said it might be time to carve livestock help out of the farm bill and make it separate legislation.

“We have a problem here that needs to be solved,” he said. “There are livestock programs that would help with the drought that are not funded for this year.”

One prospect is an indemnity program for heat-related death losses in feedlots, and another is emergency money to buy forage for cattle that have run out of grass.

“We’ve had livestock losses already,” Johanns said, “and somehow we’ve got to figure out where that help comes from.”

Dan Steinkruger, whose Farm Service Agency staff probably would be involved in administering help to the livestock sector, said he’s not heard of large death losses in Nebraska feedlots so far, “but I’m sure they’re running higher than normal just due to the heat and stress.”

The Nebraska Farm Bureau Federation and the Nebraska Farmers Union, often at odds on matters of farm policy, both sided with Johanns later Thursday in the ethanol-livestock debate.

Farm Bureau President Steve Nelson of Axtell voiced sympathy for the livestock side of the farm economy.

“But the main point I’ve been making,” Nelson said, “is that the problem we have here is the result of Mother Nature and the result of the drought. I don’t believe it’s the result of one particular action or one particular sector.”

Tinkering with the ethanol mandate and its 2012 requirement of 13.2 billion gallons of renewable fuel could create more problems than it solves down the road, he said.

Any short-term action would have to come from the Environmental Protection Agency, which presides over the fuel standard.

Nelson noted that some ethanol plants already have curtailed operations “and the market has a way of effecting these changes.”

Farmers Union President John Hansen said any harm done to the state’s 24 ethanol plants won’t stop there.

“The additional productive capacity of agriculture — and, in particular, corn — has put us in a position where we either have to find a home for this product or it will flood the market and put us out of business,” Hansen said.

The outlook for corn to keep ethanol plants in operation and cattle in good condition through the winter wouldn’t look so dire if the federal government went back to maintaining a grain reserve, he said.

“Now that it’s stopped raining and we’re getting lots of days of 100-degree heat, we’re once again reacquainted with how vulnerable we are,” Hansen said.

Nelson said Farm Bureau members would prefer that the House pass a farm bill with livestock relief in it. But the sense of urgency is growing almost by the hour

“Really, every day that we don’t get a general rain, I think we see some pretty significant deterioration in crops. And anything that’s left on grazing land is just going to be pretty much gone.”

Citing “a crying need across the board to get a farm bill passed,” Hansen voiced his opposition to turning livestock relief into separate legislation.

“If they do carve it off, it doesn’t fix the overall problem.”

The Nebraska Cattlemen want the ethanol mandate removed to create what its members see as fairer competition for tight corn supplies.

But Johanns’ Democratic counterpart, Ben Nelson, also issued a statement Thursday afternoon calling EPA adjustment of the Renewable Fuels Standard “the wrong approach.”

Nelson cited Iowa State University research that showed only a modest impact on corn prices.

“Also,” Nelson said, “with the rise in grain prices, we are seeing the ethanol industry contract due to market conditions, just like our livestock producers.”