News / Economy

Midwest Farmers Concerned With EPA Changes to Ethanol Standards

Midwest Farmers Concerned With EPA Changes to Ethanol Standardsi
X
December 13, 2013 12:37 AM
In November, the Environmental Protection Agency proposed lowering the mandated amount of ethanol mixture in the nation’s gasoline supply. Current law requires refiners to use 68 billion liters of ethanol by 2014. The proposed changes would cut that requirement to about 56 billion liters. As VOA’s Kane Farabaugh reports, farmers in the midwestern United States who produce corn used to make ethanol say the proposed changes could hurt them financially
TEXT SIZE - +
Kane Farabaugh
— In November, the Environmental Protection Agency proposed lowering the mandated amount of ethanol mixture in the nation’s gasoline supply.  Current law requires refiners to use 68 billion liters of ethanol by 2014.  The proposed changes would cut that requirement to about 56 billion liters.  Farmers in the midwestern United States who produce corn used to make ethanol say the proposed changes could hurt them financially.

It's a prosperous year in the cornfields of Polo, Illinois, for farmer Brian Duncan.

“This year we had record yields, and a huge crop," said Duncan.

It is a similar story across the country…farmers coming off one of the worst years on record because of last year’s drought now face some of the best yields in recent memory.

That, however, is where Duncan says the good news ends.

“As we look at the increased bushels, our inventories are gonna be worth $3 a bushel less than what they were valued at a year ago," he said.

As the sun sets each day on Duncan’s golden harvest, the price of corn continues to decline, from an all time high of more than $7 a bushel set during the peak of the drought last year.

"Four-dollar corn in this environment is tough enough, let alone $2.50 or $2.75 corn, which is what we could be looking at with another big crop, which is why we needed higher blend rates of ethanol," he said.

Demand for ethanol, a liquid fuel created from corn, grew in 2007 when the Renewable Fuel Standard, or RFS, was put in place.  The RFS mandated that fuel makers blend ethanol into their gasoline, with the amount increasing over time.  That was good news for corn producers like Duncan, who saw a steady increase in demand for their product... and its price.  Times, however, are changing, says GrainAnalyst.com contributing editor Craig Turner.

“We’ve hit the blend wall.  Since 2008, the United States consumes about 9 percent less gasoline than we used to.  We can only use 10 percent of ethanol in a gallon of gasoline [before it harms some engines], and we basically hit that wall.  So we can’t produce any more ethanol; we have to stay the same, and if fuel efficiency gets even better, then the ethanol mandate could come down even further," said Turner.

Turner says one ironic factor driving down demand for ethanol is the growing number of fuel-efficient vehicles on the road.

“Every year we take older cars off the road and replace them with more fuel-efficient cars, we’re going to be using less gasoline, so now that we’ve reached this peak in corn ethanol it’s actually hurting farmers," he said.

That's certainly not the scenario farmer Brian Duncan was banking on.

“We’re happy for the market, but we have ever increasing yields, and ever increasing production capabilities, for ethanol, and we were kind of planning on the EPA following through with their increase and inclusion of green fuels," he said.

The biggest uncertainty for farmers used to be the weather. But with changing ethanol standards, falling corn prices, and the lack of action in the U.S. Congress on a new farm bill, the weather seems to be the least uncertain obstacle Brian Duncan and other U.S. farmers face in the new year.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.