Tensions continued to mount at the national level Thursday between livestock producers and ethanol producers as they watched the 2012 corn supply shrink almost by the hour in a rapidly spreading and deepening drought.
During another day of intense heat in Nebraska, Republican Rep. Bob Goodlatte of Virginia said he would introduce legislation in the House to either diminish or set aside the federal mandate for renewable fuels.
Goodlatte also called on the Environmental Protection Agency to reduce the mandate “and do it now,” pending action in Congress.
Among those shaking his head over those developments was Nebraska farmer Steve Hanson of Elsie.
Hanson spoke up as a corn producer, a beef producer and as the current chairman of both the Nebraska Beef Council and the Nebraska Ethanol Board.
He made it clear that he does not favor action against the mandate, which calls for 13.2 billion gallons of ethanol in highway fuel this year, even though that threatens the corn supply for his feedlot calves.
“I personally feel that the EPA oversteps its bounds in certain areas anyway,” Hanson said. "The agency should stand back in this case and let the market handle the situation.
“If ethanol plants can’t make ethanol profitably,” he said, “we will see a decline in demand for corn from ethanol plants. And that’s the natural way for this to happen.”
It should be remembered that the distillers grain left over from ethanol production has become an important resource for feeding cattle, he said.
Hanson’s perspective is at odds with a broad array of livestock and livestock-related organizations endorsing a presentation Thursday by private-sector economist Thomas Elam in Washington.
Among the many on that list were the American Meat Institute, the National Cattlemen’s Beef Association, the National Pork Producers Council and the National Turkey Federation.
Earlier this week, the Nebraska Cattlemen, the state’s largest livestock organization, took a similar stance.
Elam, speaking on the same conference call with Goodlatte and the news media, said his research shows the ethanol mandate is “exacerbating this dire situation” with the corn supply.
And, according to Elam, the mandate will contribute to skyrocketing food costs in the months ahead.
Food prices are “up dramatically” since the Renewable Fuels Standard was created by Congress in 2005, he said.
“Now, food prices are almost double the rate of general inflation,” and “the closer we get to biofuels, the higher the rate of food inflation.”
Hanson wasn’t buying it.
This is not a food versus fuel situation, as he sees it. From the livestock side, “ethanol is a great help to our industry and to rural communities.”
Apart from that, there’s nothing to like about the 101-degree temperature in his area Thursday. “We’ve got our (irrigation) wells running as hard as we can keep them running.”
And there’s nothing to like about skyrocketing corn prices from a corn producer’s vantage point.
“This is the start of demand disruption in both the ethanol and the feeding industry,” he said.