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Meat Groups Ask Govt To Ease Up On Ethanol

July 31, 2012, 10:02 PM by Brady Mallory

Meat Groups Ask Govt To Ease Up On Ethanol

Corn prices have gone up more than 60 percent since June and livestock producers say they stand to lose a lot if the prices continue to climb.

Calling it a potential crisis, two groups are now asking the Obama Administration to scale back ethanol production to save the corn for feed.

"I've heard of a lot of horror stories," Brian Schmidt of Schmidt Grain Co. said.  "You're hearing about herds being liquidated."

The National Cattlemen's Beef Association and National Pork Producers Council want the Environmental Protection Agency to decrease ethanol production. On Monday officials with the groups sent a formal request to waive "in whole or substantial part" ethanol output requirements under the Renewable Fuel Standard.  In short, this request is essentially so the ethanol industry and farmers are not competing against each other for corn.

"The livestock producer is my best friend. If he can't turn a profit because of high cost of hay, grain and feed it will have a negative impact," Schmidt said.

If it costs more for the meat producer, meat will likely cost you more at the grocery store; just one of the many scenarios coming from this drought.

"All we can do now is hope and pray for rain," Schmidt said.

Under the RFS, refiners have to make 13.2 gallons of ethanol this year. And ethanol officials says that does not depend only on the upcoming corn crop.

"That can be used, met by ethanol already in stock or met with credits for gallons that will be bought," Senior Vice President for the American Coalition for Ethanol Ron Lamberty. 

Because of this, Lamberty said that could reduce the total by creating about three billion gallons.

As the owner of Lambo's BP, Lamberty is concerned cutting ethanol production could raise gas prices by about $1.09 per gallon.  

"We understand the drought is going to hurt.  It's going to hurt everybody.  Plants are closing down.  To have one group decide to shift the burden of the drought; it's unacceptable," Lamberty said.

The government has yet to act on this request.  Lamberty said the request for a RFS waiver must come from a refiner or the state.

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