Washington, Jun. 19 - As extensive flooding in the U.S. Midwest threatens this year's big U.S. corn crop, food industry leaders Thursday renewed their call for an end to the federal ethanol mandate.
Citing tight grain supplies and record high prices for corn and soy, representatives of the cattle and poultry industries urged the Environmental Protection Agency to grant Texas Governor Rick Perry's request to cut this year's Renewable Fuel Standard by half.
The nationwide corn-based ethanol mandate requires blending 9 billion gallons of ethanol into the nation's fuel supply this year.
"It is clear that while America's ethanol mandate has done little to hold down the steadily climbing gasoline prices, its negative effects on the security of our food supply and the cost to feed our families are huge," said Dr. Thomas Elam of FarmEcon LLC.
The floods in the Midwest have ravaged several million acres of corn and soybeans fields over the past two weeks, pushing corn to record highs above $8.00 per bushel early this week.
"Until the recent flooding in the Midwest began, it might have been acceptable to have a lengthy debate over ethanol mandates," James Herring, president and chief executive officer of the cattle feeding company Friona Industries, said in a statement.
"But to be frank, floodwaters and high corn prices have wreaked havoc on the cattle industry and it is time to stop talking and take action," he said.
Livestock producers rely on crops to feed their animals. Surging crop prices have cost the broiler chicken industry some $5 billion since October 2006, said Mark Hickman, president and chief executive officer of Peco Foods.
Despite the flooding, the American Farm Bureau Federation said Thursday that Texas should not receive an exemption from the ethanol mandate. The group disputes the notion that ethanol is responsible for the woes of the livestock industry and said ethanol has helped the U.S. economy and created jobs.
"If EPA sends a signal that the government is not fully committed to implementing the RFS -- by wavering at the first hint of an increase in price regardless of whether the RFS is the cause or the severe harm standard has been satisfied -- the investment markets could react and thus jeopardize the ability to meet the goals of the legislation," the group said.