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Ethanol industry faces ‘Blend Wall’
Editor’s note: The National Corn Growers Assoc. (NCGA) mailed the following letter earlier this month to Stephen L. Johnson, administrator for the U.S. Environmental Protection Agency (EPA).
Dear Administrator Johnson,

I am writing you on behalf of the NCGA, representing the nation’s corn farmers.

As a farmer myself I have seen both good times and bad times in farming. I have never seen a year that has contained both in such measure in all my years in the business. Corn has traded as high as $7 per bushel in June and has fallen to the point where corn sold in my area of Nebraska this week for $3.20 per bushel.

There are many factors that affect corn prices and the volatility in the market this year has been mirrored in the other commodity and financial markets. NCGA is actively engaged in seeking ways to provide risk management tools to our industry and growers to mitigate these problems.

Ethanol production is an ever increasing use for corn. Developments in technology and agronomic practices have increased corn yields to the point where the U.S. corn industry is producing enough corn for its traditional customers and the ethanol industry is growing on production exceeding those needs. That is why we so enthusiastically supported the Energy Bill of 2007 and the expanded markets for ethanol in the Renewable Fuels Standard.
As you know, the ethanol industry is facing constraints due to the “Blend Wall,” the point at which ethanol production begins to equal 10 per cent of U.S. fuel use. This problem is of great concern to the ethanol industry and to corn growers. Without a solution, both industries will suffer greatly.

I am aware that the EPA has been considering numerous ways of increasing the allowable amount of ethanol in standard gasoline. I strongly encourage you to redouble your efforts and the efforts of your agency to move as quickly as possible and approve increased blends. I cannot emphasize enough the importance we place on this effort. Additionally, we are concerned that there may be additional testing requirements needed for blend rate approvals. We would appreciate hearing from you concerning the status of that testing and we offer any assistance we might provide to move that process forward.

We strongly support increased ethanol blends and we understand that the process by which these blends are approved must be based on sound data and science. We encourage the EPA to make every effort to complete any needed testing as soon as possible.
Our membership is wrapping up the harvest of another bumper crop. Growers from around the nation are committed to providing the food, feed and fuel needed by our country and the world. We are also committed to working with you to make sure that needed regulatory change provides additional opportunities for us to do so.

Bob Dickey
NCGA President
12/17/2008