The biofuels industry is planning a corn ethanol defense strategy for President Obama’s trip to Iowa next week following disappointing corn yield estimates released Friday.
Agriculture Department predictions for corn supplies came in lower than expected in its biannual review. The 123.4 bushels per acre yield projected Friday is the lowest since 1995, and the anticipated 10.78 billion bushel haul would be the lowest since 2006.
Monte Shaw, executive director with the Iowa Renewable Fuels Association (RFA), said his group will be out in front of the renewable fuel standard (RFS) issue when Obama comes to town.
“Our goal is to see where we can put in some factual information,” Shaw told E2-Wire on Friday. He said enough flexibility exists in the RFS to mitigate price concerns from low corn yields.
That Environmental Protection Agency (EPA) rule requires refiners to
blend 13.2 billion gallons of corn ethanol into conventional fuel this
year. Livestock groups have said the RFS has exacerbated the low corn yields caused by the drought, in turn driving up costs for feed that will translate into pricier beef and poultry.
The Obama campaign likely will harp on the wind production tax credit
(PTC) that GOP White House challenger Mitt Romney wants to end as
scheduled on Dec. 31. That credit, which pays 2.2 cents for every
kilowatt-hour of wind production, is a key economic incentive for the
Iowa wind industry.
But with Iowa being in the heart of corn country, Shaw said, the RFS
could surface during Obama’s visit. The Iowa RFA has conducted an
ongoing biofuels messaging campaign since the state’s January
Matt Hartwig, a spokesman with the national RFA, said livestock groups and environmentalists will use the Agriculture report to criticize the RFS.
“Enviros and ranchers have to stir the pot because they know many of the claims they are making don’t hold water,” Hartwig said in an email to E2-Wire on Friday. “The drought has been hard on all of agriculture. But it shouldn’t be exploited in search of temporary monetary gains that won’t materialize in the first place. Cooler heads will prevail in this debate.”
Representatives from the National Cattlemen’s Beef Association as well
as the Environmental Working Group said they had no plans to press the
RFS issue during Obama’s Iowa visit.
“I think we made our position very clear with the petition we sent to” EPA Administrator Lisa Jackson, National Cattlemen’s Beef Association Vice President of Governmental Affairs Colin Woodall told E2-Wire on Friday. He was referring to a request livestock groups sent Jackson last month urging her to consider waiving the RFS.
Hartwig noted Obama and Agriculture Secretary Tom Vilsack “have been
strong advocates of renewable fuels.” Vilsack reiterated administration
support for the RFS at a Friday conference held by the American
Coalition for Ethanol in Omaha, Neb.
Ethanol producers have already cut back in response to high corn
prices, which Shaw said means the RFS impact on corn supplies is
overstated. Biofuels industry groups also have maintained that ethanol stockpiles and credits from overproduction in previous years will reduce the amount of production needed to meet the RFS this year.
The corn estimates came in at about where commodities traders had anticipated, Shaw said.
“We are going to approach this on a fact basis, and the facts are good for us,” Shaw said.