Floods put renewed pressure on renewable fuels standard
Devastating floods and bad weather in the Midwest are raising the tide of opposition against the renewable fuels standard.
Groups that have been pressing lawmakers to reconsider federal supports for ethanol are now pointing to flooded fields in the nation's cornbelt as further evidence the United States may struggle to meet the standard.
The record floods have soaked more than 1 million acres of cropland in the Midwest and swallowed nearly 10 percent of the corn crop in Iowa.
The Agriculture Department estimated yesterday that 12 percent of the U.S. corn crop -- or about 3 million acres -- is in poor to very poor condition, up from 9 percent last week.
Commodities markets responded with climbing prices for corn, settling yesterday at $7.45 a bushel for July delivery on the Chicago Board of Trade. The high prices are not only hard on livestock farmers, but also ethanol plants. The ethanol industry is seeing more narrow profit margins because of the price increases.
Groups that have consistently criticized the renewable fuels mandate and subsides for ethanol are tying their message to this event too. They say the floods and expected poor crop yields could cause further strain on food and feed supplies.
The Environmental Working Group released a report this week describing what they call a "perfect storm" for the "ill-conceived" corn ethanol mandate. The report cites agriculture economists and state climatologists who have said problems with the crop in Illinois or Iowa could cause skyrocketing prices.
"Our ethanol policy requires perfect weather, and not surprisingly, we aren't getting it," said EWG analyst Michelle Perez. Since Congress cannot control the weather or global food and fuel demand, Perez called on lawmakers to scale back the biofuels mandate.
Groups that have been pressing lawmakers to reconsider federal supports for ethanol are now pointing to flooded fields in the nation's cornbelt as further evidence the United States may struggle to meet the standard.
The record floods have soaked more than 1 million acres of cropland in the Midwest and swallowed nearly 10 percent of the corn crop in Iowa.
The Agriculture Department estimated yesterday that 12 percent of the U.S. corn crop -- or about 3 million acres -- is in poor to very poor condition, up from 9 percent last week.
Commodities markets responded with climbing prices for corn, settling yesterday at $7.45 a bushel for July delivery on the Chicago Board of Trade. The high prices are not only hard on livestock farmers, but also ethanol plants. The ethanol industry is seeing more narrow profit margins because of the price increases.
Groups that have consistently criticized the renewable fuels mandate and subsides for ethanol are tying their message to this event too. They say the floods and expected poor crop yields could cause further strain on food and feed supplies.
The Environmental Working Group released a report this week describing what they call a "perfect storm" for the "ill-conceived" corn ethanol mandate. The report cites agriculture economists and state climatologists who have said problems with the crop in Illinois or Iowa could cause skyrocketing prices.
"Our ethanol policy requires perfect weather, and not surprisingly, we aren't getting it," said EWG analyst Michelle Perez. Since Congress cannot control the weather or global food and fuel demand, Perez called on lawmakers to scale back the biofuels mandate.