Three more governors from Texas, Iowa, and New Mexico have joined the debate surrounding a potential waiver of the Renewable Fuels Standard, which mandates production of 13.2 billion gallons of corn ethanol this year, and another 13.8 billion gallons in 2013.
Livestock groups say the drought has caused several problems, one of them being limited corn supply, and they worry that mandated ethanol production will create excessive competition in the markets. Easing the mandate, some say, would lower corn prices.
Governor Terry Branstad of Iowa doesn't agree. He submitted a letter this week to the EPA urging continuation of the RFS. He said other agriculture industry sectors could be negatively impacted by a waiver.
"It is not sound policy to address uncertainty in one component of the agricultural economy by increasing uncertainty in another component. Especially, as in this case, when the benefit to livestock producers is uncertain and the nation's renewable fuel industry will be negatively impacted," Branstad wrote.
Branstad highlighted USDA data that suggests 20% of cattle feed re-enters the market as animal feed.
"Distillers grains decrease demand for corn and soy meal for livestock feed. Federal policy should support value-added opportunities and diversification of agricultural products," he wrote.
While Branstad does not support a waiver of the RFS, Texas Gov. Rick Perry and New Mexico Gov. Susana Martinez do support the waiver.
In letters sent this week, Gov. Martinez said the waiver would ease the burden of increased feed costs and food products supply, and Gov. Perry said his state was suffering also from higher grocery prices and strains on business.
"The RFS may have been a well-intentioned effort to move our country toward energy independence, but it has, predictably, done more harm than good," he wrote. "Good intentions and laudable goals are small compensation to the families, farmers and ranchers who are being hurt by the federal government's efforts to trade food for fuel. Any government mandate that benefits one industry to the detriment of millions of consumers is bad policy."
Bob McCan, National Cattlemen's Beef Association vice president said Texas was the largest beef producing state in the country, and Gov. Perry's announcement solidifies the negative effects of the drought. McCan and NCBA support an RFS waiver.
"The [RFS] mandate creates an uneven playing field for farmers and ranchers, and has directly affected the cost of feed in agricultural parts of the country, which could lead to an increase in food prices for consumers," McCan said.