DPI Helps Lead Efforts to Change Corn to Ethanol Federal Mandate

The head of one of Delmarva's chicken companies described the situation as a "disaster."

Part of the increase in feed prices is due to the federal mandate that a certain amount of ethanol be made from corn. As a result of the mandate, about 40% of America's corn supply is used for fuel and it has helped create higher corn prices.

DPI has been involved in several efforts this summer to alleviate these unsustainable higher corn prices by changing the federal government's policy on the use of corn to produce fuel.

First, we worked with the National Chicken Council and other national groups in support of their effort to convince the U.S. Environmental Protection Agency to grant a waiver of the corn-to-ethanol mandate for the rest of this year and into next year. The federal government's Renewable Fuel Standard requires 13.2 billion gallons of corn-based ethanol to be produced this year and 13.8 billion gallons in 2013. This translates to nearly five billion bushels of corn going to fuel. With the forecast of a very small corn crop, this requirement has directly affected the supply and cost of feed in major agricultural sectors this year, causing the type of economic harm that justifies the issuance of a Renewable Fuel Standard waiver.

Under the law that created the mandate, EPA has the authority to waive all or just a part of the standard. A coalition of national groups submitted a waiver request to EPA administrator Lisa Jackson on July 30. In the prior week, DPI spoke with EPA regional administrator Shawn Garvin and U.S. Department of Agriculture undersecretary Michael Scuse about this situation and urged them to do what they could to convince Administrator Jackson to grant a waiver. We said that if the ethanol industry wants to buy corn in the open market without a federal government mandate, that is fine, but to create an unlevel playing field by requiring purchases due to a mandate is not fair and could be destructive of the chicken industry.

We also urged our three members of Congress from Delmarva to sign a letter to Administrator Jackson asking her to grant the waiver. Among the 156 members of Congress who signed the letter were Congressmen John Carney of Delaware, Andy Harris who represents the Eastern Shore of Maryland, and Scott Rigell who represents the Eastern Shore of Virginia. Click here to read the letter.

A similar letter was sent by 33 U.S. Senators. All six who represent Delmarva (Tom Carper and Chris Coons of Delaware, Ben Cardin and Barbara Mikulski of Maryland, and Jim Webb and Mark Warner of Virginia) signed the letter. Click here to read the letter.

Additionally, DPI urged the three governors of Delmarva's states to send official waiver request letters to the EPA administrator. Delaware Governor Jack Markell and Maryland's Martin O'Malley submitted a jointly signed letter. Click here to read the letter. Virginia governor Bob McDonnell is considering sending a similar waiver request letter.

Legislatively, a bill (S.3428) has been introduced by Maryland Senators Cardin and Mikulski to lower the ethanol-to-corn mandate when corn supplies are low. In the weeks prior to introduction, DPI urged Senator Cardin to sponsor this bill. He did and we appreciate his common sense approach to tying the corn-to-ethanol mandate to corn supplies. We have urged Delaware Senators Carper and Coons and Virginia's Warner and Webb to become co-sponsors as well.

Senator Coons will not be supporting this legislation, at least now. We've not heard from the others.

Senator Cardin's bill is nearly identical to legislation (H.R. 3097) introduced last autumn by Virginia Congressman Bob Goodlatte and Maryland Congressman Andy Harris.

DPI will continue to work to ease the financial plight facing our chicken industry because of this federal corn-to-ethanol mandate.