News / Economy

Midwest Farmers Concerned With EPA Changes to Ethanol Standards

Midwest Farmers Concerned With EPA Changes to Ethanol Standardsi
X
December 13, 2013
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

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic 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.