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Corn growers might support reducing RFS?

By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — Reports last week indicated that the National Corn Growers Assoc. (NCGA) might support a waiver of the nation’s renewable fuels standard (RFS) if there is a significant supply shortage of corn due to Midwest flooding.

If “severe economic impact” is realized from corn shortages this year, farmers from NCGA President Ron Litterer’s hometown in Greene, Iowa, would support a temporary waiver to the RFS, Litterer indicated, according to published reports from June 16. He said his primary interest is retaining his customers, and that it was far too early to recommend shuttling the RFS.

“There’s potential to still salvage a crop. It certainly won’t be a bin-buster, but we can still have a good crop,” said Litterer. “The long-term policy is for the RFS to have 15 billion gallons of corn ethanol by 2015. We’re going to have ups and downs along the way, as we’re having this year.

“Corn growers understand we want our end users around for a long time, and it may require some adjustments.”

On June 19, the NCGA Corn Board issued an official statement on NCGA’s website which apparently contradicts Litterer’s stance on the possibility of NCGA’s support for temporarily waiving the RFS.
“NCGA affirms its strong commitment to NCGA policy supporting the 2007 Energy Independence and Security Act, especially the provisions dealing with ethanol and other biofuels. NCGA strongly opposes current requests for an RFS waiver, and has provided a formal comment indicating such to the administrator of the U.S. (Environmental Protection Agency),” the statement reads in full.
‘Knee-jerk’ reaction?

With talk of rescinding the nation’s RFS traveling down the Mississippi River nearly as fast as the floodwater, Renewable Fuels Assoc. (RFA) president Bob Dinneen urged restraint and patience.
“The floods in the Midwest are adding yet another layer of worry for millions of Americans already trying to cope with record high oil and gasoline prices. While it is far too early to fully assess the impact of the flooding, it is clear that this unprecedented event will likely cause already high grain prices to remain elevated, further putting strain on industries that rely on corn and other crops,” Dinneen stated in a press release issued last week.

He added that last year’s record corn crop and anticipated increases in worldwide grain production should offset losses from Midwest flooding of cropland.

“Knee-jerk reactions to this unprecedented weather event would do even more harm to the nation against the backdrop of the current oil and economic crises it faces,” Dinneen continued. “Abandoning our commitment to ethanol and biofuels, as some would suggest we do, would do nothing to provide meaningful relief from high grain prices today or in the future. It would absolutely force the price of gas through the roof and require the import of more record-high foreign oil.”

Dinneen provides support for maintaining the nation’s RFS commitment on the RFA’s website at www.ethanol rfa.org online, including observations on the ethanol and corn and grain markets as they pertain to recent weather events and a historical oversight of cropland and harvest recovery following the Great Flood of 1993.

6/25/2008