(Posted Fri. Aug 3rd, 2012)
Aug. 3: The Wall Street Journal today published a letter to the editor from National Corn Growers Association President Garry Niemeyer, sent to the newspaper on July 27 in response to an opinion article by the CEO of Smithfield Foods, titled “The Ethanol Mandate is Worse than the Drought.” Here is the complete version of the letter, as submitted.
“To the editor: C. Larry Pope’s July 27 opinion article on ethanol (“The Ethanol Mandate is Worse than the Drought”) makes numerous invalid assertions. In the first place, he ignores the great flexibility inherent in the current Renewable Fuel Standard for biofuels, a flexibility that has greatly eased the potential impact on the corn supply in this drought year, with a significant surplus of ethanol and credits that equate to about a billion bushels of corn. According to one new independent study, because of this flexibility of the RFS, it has less than a 5 percent impact on the current price of corn -- even in this time of drought.
“Let’s get one fact clear and a myth busted. Ethanol does not consume nearly as much corn as the livestock sector. In fact, ethanol itself provides a very valuable feed resource in distillers grains – the equivalent of more than 1 billion bushels of corn. And when you factor in the use of exported corn, the feed use of corn this current year is more than 7 billion bushels, compared to the equivalence of less than 4 billion used strictly for ethanol.
“But Mr. Pope’s intentions are most transparent in his blatant yearning for a return to cheap corn. Of course, Smithfield Foods needs to make a profit, and we don’t begrudge him his current annual compensation of more than $13 million. But their profits should not come on the backs of corn farmers, who must deal with rising costs with no ability to set the price for their corn. Smithfield has been able to purchase some Brazilian corn at a lower price right now because of Brazil’s surplus and certain logistics. Brazil’s surplus is a reflection of the way the global corn industry has grown overall over the past several years, precisely because of the rise of ethanol. Farmers worldwide see the promise of an expanding market and have responded by growing more corn.
“Our farmers and our customers are all suffering greatly in this historic drought. Now is the time for all of us to work together for solutions, not attack an industry that creates jobs and opportunities for rural Americans.”
NCGA also submitted a letter to the New York Times following a similar July 30 opinion article on corn and ethanol. It will be posted once we have clarification of whether it will be published in that newspaper.