Report: Suspension of Ethanol Mandates May Not Help
While some livestock organizations have called on the Environmental Protection Agency to suspend ethanol mandates that require the production of so much ethanol per year, a new report suggests that suspension may not have the desired effect of easing the price of corn for feed and other non-ethanol buyers.
Ag Economist Christ Hurt with Purdue Extension says the report indicates a waiver could have little to no impact on corn prices. Hurt says the even with the suspension, ethanol buyers and producers may determine that it would be more economical to stay with the mandated 13 billion gallons because ethanol is still currently cheaper than gas and is used as an octane booster. Hurt says they may not be able to afford the adjustment in their formulas to use less ethanol and more gasoline.
To meet the mandates, Hurt says it will take about 5 billion bushels of corn which will is a lot considering the expected loss from this year's crop.