2014 LOGAN COUNTY FARM OUTLOOK MAGAZINE LINCOLN DAILY NEWS.com MARCH 27, 2014 17
Proposed ethanol reduction: a triple threat
E
very year the federal government enacts a new
series of laws and regulations that affect the
population of the country. For 2014, farmers of the
nation, Illinois and Logan County in particular, may be
strongly affected by proposed new regulations on the
manufacture of biodiesel and other similar fuels.
The U.S. Environmental Protection Agency
has proposed legislation that would weaken the
Renewable Fuel Standard. For Illinois farmers, the
diminution would come in the form of a reduction
in the amount of corn-based ethanol to be produced
in 2014. This potential legislation has proven to be
extremely controversial so far.
The EPA’s renewable volume obligations set annual
targets for the creation of biodiesel and other such
renewable fuels. The proposed rule would limit corn-
based ethanol at 13 billion gallons. These proposed
volume obligations are a drastic reduction from
current limits, which are presently set at 1.4 billion
gallons higher, or 14.4 billion gallons.
Organizations such as the National Corn Growers
Association have expressed great concerns with the
passage of such legislation, arguing that it would
weaken the economy for everyone, farmers or
otherwise.
Martin Barbre, NCGA president, refers to the
proposed change as “ill-advised” and says it “should
be condemned by all consumers because it is
damaging to our tenuous economy and shortsighted
regarding the nation’s energy future.”
Barbre also said that agriculture has remained a
positive note in an otherwise failing national economy.
Despite the relative good health of the agricultural
industries, corn prices are currently falling below the
costs of production. This legislation would damage
things further.
Barbre also noted that the EPA proposal could “send
the wrong signals to automakers who want more
direction on where they should be spending millions
of targeted investments on research and development.”
According to data from the U.S. Energy Information
Administration, U.S. oil imports have decreased by
15 percent. Organizations such as the NCGA attribute
part of this decrease to the use of biofuels.
Going by the latest USDA projections, American
farmers harvested a corn crop last year of a record 14
billion bushels. As a result of the massive supply, corn
prices are falling, currently standing close to where
they were when the Renewable Fuel Standard was
enacted in 2007.
While the prices of buying corn have dropped, the
cost of growing it has only increased over the past
few years. In 2012, it cost $655 per acre to plant corn.
According to the NCGA, should corn prices fall too
far (using $3.50 a bushel as an example), farmers and
the rural economy could lose more than $10 billion.
Such a loss is expected by the NCGA should the new
legislation pass.
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