(Posted Wed. Dec 11th, 2013)
Dec. 11: For 2014, the U.S. Environmental Protection Agency has proposed a 1.4 billion gallon reduction in how much corn ethanol will be required under the Renewable Fuel Standard, the federal law that helps get domestic, renewable, cleaner-burning corn ethanol blended in the nation’s fuel supply. This will reduce already-low corn prices and negatively affect planting decisions in 2014. Last week, dozens of corn growers and other supporters of ethanol raised their voices about the potential for grave economic impacts should the EPA implement this reduction during a Washington hearing that ran late into the night.
Off the Cob caught up with Virginia Grain Producers Association President Bryan Taliaferro to discuss his testimony during the event. Recounting his message, Taliaferro recounted the economic troubles many corn farmers faced before corn ethanol became widely used in automotive fuels.
To listen to the full interview, click here.
“I started farming in 1973 with my brother and my dad, and I recall back in the 1980s when we had some debts,” he began. “Interests rates went up to 22 percent, and it was just a disastrous time. Corn prices were well below two dollars a bushel, and we didn’t think that we were going to make it without some kind of changes.
“Later in the 1980s, as we struggled along, I remember first discussions about using this abundance of corn that we had for fuel. Back then I was on the NCGA Corn Board, and we remembered back then that corn ethanol was how NASCAR got started. We looked back at how moonshiners in the 1920s during prohibition were running their cars on ethanol to make them faster. It may have been illegal back then, but they were just trying to make a living. That’s where NASCAR got started, and we thought that it would be a good fit to use corn for fuel again.
“Later on, we came to realize the environmental benefits of blending corn ethanol into fuel. Ethanol burns cleaner, and you just don’t have the carbon monoxide coming out of the exhaust pipe. As people turned their attention to reducing the amount of carbon emissions, we saw how corn ethanol was an even better fit in our fuel supply. So, the Renewable Fuel Standard was passed, and our country began blending more corn ethanol into our fuel supply. It was just a perfect fit.
“I do not want to see farmers go back to the days before the RFS. I am sure that the EPA proposed this reduction under some pressure from other people, but it would send corn farmers back to the same situation we faced in the 1980s.”
Taliaferro explained the reduction’s potential impacts as he sees them, noting the drastic impact that a reduction of this size could have.
“This year, we came off of the worst drought that we had ever seen in 2012. The country’s corn farmers responded magnificently by increasing production. Even with the RFS unmolested, we have rebuilt that surplus of corn. What in the world are we going to do with an additional 500 million bushels of corn if the EPA reduces the corn ethanol volume by 1.4 billion gallons?
“Those 500 million bushels will sit there on end stocks acting like a weight that drags down corn prices to below the cost of production. What are we supposed to do then? Go back to the days when the government actually paid farmers not to produce? Let’s use corn and get it into the marketplace where it can benefit the country.”
Taliaferro called then upon other farmers and all of those who rely upon the economic activity ethanol production generates to join their voices with his in an outcry against the proposed reductions.
“If you look at what could happen, you see that farmers would have to grow less corn to keep prices above the cost of production to keep from losing money. If EPA were to reduce the volume of corn ethanol required under the RFS by 1.4 billion gallons and kill demand for 500 million bushels of corn, farmers would have to find another way to use all of those acres. Since we don’t want a government program paying us not to farm those acres, they would have to go into other crops.
“Are we going to add soybean acres and depress those prices? Are we going to add cotton acres and depress those prices? Are we going to add acres of wheat or other small grains and depress those prices too? What are we going to do?
“The best thing to do is to leave the RFS like it is.”
Taliaferro urged farmers both to educate themselves on the issue and take immediate action to make sure their representatives in government understand the potential impacts of this proposal. To do so, click here for NCGA’s RFS defense information and action center.