Midwest Floods, Record Corn Prices Spur Opposition to 'Food-to-Fuel' Mandates

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Midwest Floods, Record Corn Prices Spur Opposition to 'Food-to-Fuel' Mandates

Representatives of agricultural economics, the environment, and the food industry yesterday called on the U.S. Environmental Protection Agency to revisit its so-called "food-to-fuel" mandates in light of the recent Midwest floods and burgeoning global food costs driven by record commodity prices.

EPA is considering Texas governor Rick Perry's ethanol mandate waiver request to reduce this year's Renewable Fuel Standard (RFS) by half. The agency's public comment period on the request ends June 23.

On a call with reporters, environmentalists urged the adoption of the waiver, citing a new study, slated to be released to EPA on Monday, that finds that the RFS - which mandates 9 billion gallons of ethanol be blended into the nation's fuel supply this year - has only a small effect on gas prices, but a large one on food prices and security. The call participants also pointed out the adverse environmental impacts of ethanol, which they say will cause soil erosion and high pollution levels in the Gulf of Mexico.

Representatives of the cattle, poultry, and pork industries also recommended that the waiver be granted. Biofuel mandates, tariffs, and subsidies have been especially hard on these businesses, since the corn and soy used to feed animals accounts for much of their input costs.

"America's livestock sector has proven itself very adept at responding to trends in the market and curveballs from Mother Nature, but now we are facing an overwhelming threat thanks to ethanol mandates," said Rod Brenneman, president and c.e.o. of Seaboard Foods, a major pork producer and processor in Kansas. "We understand that current corn prices have been driven up by a number of factors, including increased export demands, floods here in the U.S., and rising transportation costs. But ethanol mandates are responsible for a massive and indefensible detour in our corn supply."

Additionally, Scott Faber, v.p. for federal affairs for the Grocery Manufacturers Association, said that without changes in the ethanol mandate, the steeply rising prices of basic foods pegged to corn, such as eggs and milk, would only continue.

EPA must issue a decision on Gov. Perry's waiver by July 24.