Branstad backs ethanol industry in debate over corn

DES MOINES - Iowa's ethanol producers found an ally in Gov. Terry Branstad as they square off against the state's livestock industry over a key federal subsidy.

National livestock groups took aim at the Environmental Protection Agency's Renewable Fuel Standard this week, hoping the EPA would allow a one-year waiver from the ethanol requirements.

The move raised the ire of biofuel interests who get a guaranteed market for 13.2 billion gallons of corn-based ethanol this year and 13.8 billion gallons in 2013. The requirements increase through 2022 when the requirement calls for 36 billion gallons.

But livestock groups are worried that the price of feed corn - already at record highs above $8 a bushel because of the drought - will continue to skyrocket as corn is taken off the market to turn it into fuel.

Branstad said Tuesday he was skeptical that a waiver - even a temporary one - would do any good.

“Once you start doing that, we can lose the momentum we have gained by having the renewable fuels provisions,” Branstad said. “Just because we have a short-term problem here, we should not lose sight of the long-term goal we have of continuing to reduce our dependency on foreign oil and producing more of it domestically.”

The price of a bushel of corn for December delivery closed at $8.05 Tuesday, down about 9 cents from its daily high.

“We're not asking for a permanent waiver of the mandate, just a temporary one so producers can feed their animals,” said Ronald Birkenholz, spokesman for the Iowa Pork Producers Association. “It's a tough situation for everyone out there.”

In a statement released Monday, Iowa Renewable Fuels Association Executive Director Monte Shaw said it was “very disappointing” that the national groups made the request to waive the mandate.

Dave Miller, director of research for the Iowa Farm Bureau, said the waiver request seems to be premature. He said his organization's position on the waiver would mirror the American Farm Bureau's position, which has so far fallen on the side of keeping the mandate.

“There are certain conditions written into the renewable fuel law that say when a waiver is appropriate. We encourage them to do a thorough review of those,” he said. “Our analysis is we haven't reached that level, certainly not for 2012. The real question is if there is a need for 2013.”