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EPA Not Expected to Roll Back Mandate

Presenter at cattle convention says RFS waiver unlikely.

Speaking at the Cattle Industry Summer Conference in Denver on Thursday Dan Basse, president of AgResource Consulting Group said the feed-food-fuel conflict is the consequence of 30-40 years of the U.S. not having an energy policy.

However, he said ethanol production "is here to stay," and based on a conversation with officials at the Environmental Protection Agency Wednesday, EPA administrator Stephen Johnson is leaning toward not rolling back the ethanol mandate as requested by Texas Governor Rick Perry. "I don't think you're going to get that (rollback) on July 25," he said, noting that Johnson's position is that the fuel supply that's being produced with ethanol is worth the corn costs that have occurred.

Basse said this will put tremendous pressure on corn prices in the future because it's doubtful enough corn acres can be found and planted in the future and because corn yields are not moving up off trend line rapidly enough to meet demand for corn. "I'm reducing usage everywhere except ethanol," he said. "This will keep corn over $6 for years to come."

Basse says at $130 per barrel crude oil, corn prices will have to reach $8.25-8.50 before ethanol producers can't afford to refine the fuel.

Source: Feedstuffs

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