Our View: Beware the Free Corn Coalition
Posted: 3/25/2014 |
Recently, ethanol opponents in the livestock and poultry sector signed a letter supporting the EPA’s proposed cuts in the Renewable Fuel Standard. In the letter, they complain about how high corn prices have affected the viability of the industry.
It is one thing to complain about the price of corn when it is $8 per bushel, as it came close to doing in the late summer of 2012, when the drought reduced the corn supply by four billion bushels. Now, with corn nearly half that price, livestock and poultry producers are still complaining and singling out ethanol. The fact is, there are a lot of people who want corn to be priced around its historic, if unsustainable, two bucks a bushel. We’re sure they’d even prefer it to be free, and so we call them the Free Corn Coalition.
In order to bolster their point, these critics also greatly exaggerate how much corn is converted to ethanol. In their letter, they claim that “Today, roughly 42 percent of the corn crop goes into ethanol production to meet the RFS mandate.” Forty-two is a fairly exact number, and they don’t say how they get it. The quick and accurate math tells another story. USDA estimates about five billion bushels will be used this year for ethanol and other products. Subtracting the amount of corn these other products represent makes the amount of corn going directly into ethanol equal about 3.9 billion bushels – from a total corn supply of 14.8 billion. That’s only 26 percent. The other 1.1 billion bushel of ethanol co-products becomes more feed for livestock and poultry.
Source: National Corn Growers Association