Obama urged to study ethanol blend impact

by Bryan Salvage
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WASHINGTON — The National Pork Producers Council is insisting the Obama administration study the economic impact of an expansion of corn-ethanol production and usage. N.P.P.C. relays that while the U.S. pork industry has not opposed the use of ethanol and the country’s goal of producing 15 billion gallons of corn ethanol by 2015, it has paid a price in the form of much higher feed costs.

And due mostly to those higher costs, since October 2007 pork producers have lost an average of $20 on each hog marketed; the industry has lost between $3 billion and $3.5 billion in equity over the past 18 months.

N.P.P.C. asked in a letter to Agriculture Secretary Tom Vilsack, Energy Secretary Steven Chu, Environmental Protection Agency Administrator Lisa Jackson and Carol Browner, who is assistant to the president for energy and climate change, that the administration lead an effort to examine the effects of such an expansion on corn availability, the price elasticity of corn, the users of corn and rural work forces and industries associated with corn.

There have recently been increasing calls from lawmakers and ethanol stakeholders for raising the cap on blending ethanol into gasoline to 15% from its current 10%. There also have been signals that the corn-ethanol industry is seeking to increase production in the face of reports that the cellulosic ethanol production mandate of 100 million gallons by 2010 likely will not be met.

Stakeholders should be brought together by the administration to consider all possible impacts of corn-ethanol expansion, including the extent to which increasing blend limits will further increase market speculation, affect grain and commodity markets and actually help the ethanol industry, N.P.P.C. said.  

"In this new era of openness and transparency and calls for scientific integrity in Washington, I can’t imagine anyone or any organization being opposed to a study on the effects of producing and using more corn ethanol," said Don Butler, N.P.P.C. president. "We hope the Obama administration and Congress provide answers to the questions surrounding ethanol expansion before rushing to change ethanol policy — that’s the American way."

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