Vilsack: Ethanol Would Suffer Under Waived U.S. Mandate
America's agriculture secretary says investment in U.S. ethanol production, which along with a drought-plagued crop is being blamed for near-record corn costs, may decline should federal use requirements for the biofuel be reduced. That's what Tom Vilsack said in Iowa State Fair this week after learning that 25 U.S. senators and 156 House members have signed letters asking the Environmental Protection Agency to suspend or lower mandates on how much ethanol the country must use this year and next.
"My concern is that we send a signal to investors of perhaps, less confidence in the industry," Vilsack. "We need to see whether the market is responding with lower demand in the face of higher prices, before making a decision to relax use requirements."
According to Bloomberg News, Jose Graziano da Silva, director-general of the United Nations' Food and Agriculture Organization, last week called for a suspension of U.S. ethanol-use rules to let more corn be used for food and livestock feed. The worst drought in 56 years has pushed corn futures up 60 percent since June 15.
Prices reached a record $8.49 a bushel on Aug. 10 when the government forecast the corn harvest would be 13 percent smaller than 2011. Today, futures closed at $8.075, up 0.4 percent on the Chicago Board of Trade.
White House Press Secretary Jay Carney told reporters that the U.S. Department of Agriculture and the EPA will be evaluating data to determine what should be done about the waiver requests and that he didn't know if anyone has directly discussed the topic with the president.