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Iowa Governor blasts EPA on Ethanol Mandate

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I'll be honest, in saying that I agree with Terry Branstad politically on next to nothing - but he is doing a hell of a job advocating, and being vocal with his support for, ethanol.

 

DES MOINES, Iowa — EPA delays in setting the Renewable Fuel Standard are contributing to weaker corn prices for farmers and costing manufacturing jobs, Iowa Gov. Terry Branstad said Wednesday.

 

"Farmers aren't buying equipment and John Deere is laying people off. What EPA has done is not only damage farm income but cost us jobs in farm machinery and manufacturing," Branstad told reporters at the Farm Progress Show near Boone.

 

In November, the Environmental Protection Agency proposed reducing ethanol produced from corn in 2014 to 13.01 billion gallons from 14.4 billion gallons initially required by Congress. The 2007 Renewable Fuel Standard requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country's dependence on foreign energy.

 

"I feel like they're playing politics instead of doing what's right for America, and doing what's right for reducing our dependency on foreign oil, and improving farm income and creating jobs," he said.

 

 

USATODAY

Ethanol makers face obstacles to expanding

Branstad said the increase in food prices was one of the biggest arguments against the increase in the ethanol mandate.

 

"They put out this garbage, when the price of corn was $7-$8, that it drove up the price of food. Well, have you seen the price of food go down?" he said. "The price of corn is down to $3.50 a bushel, and the price of food hasn't gone down at all."

 

Bill Northey, Iowa's secretary of agriculture, said he's hopeful that the EPA won't cut quite as much in the Renewable Fuel Standard as it initially proposed last winter.

 

"I hear it will be better than what EPA initially announced, but it's not going to be as good under the original RFS," Northey told reporters at the show.

 

Iowa should be expanding its ethanol production, given low prices for corn, but instead companies are hesitant to invest, Northey said.

 

"It's taken away that optimism that was there," especially for expansion of the next generation of ethanol, such as cellulosic ethanol. It uses corn stover instead of corn to make the alternative fuel.

 

"Without a green light from EPA, I don't think we'll see that investment in technology and improved efficiencies," he said.

 

Link to the article here.

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Morning Guys..

 

The flip side to that is that the Ethanol Industry is seeing strong profits because of lower corn prices and consumers are seeing that benefit at the pump.. Mark my word as soon as the EPA announces that they wont be cutting the RFS as much as first thought and corn prices will surge and so will our E85..

 

We actually have some stability in the market right now (it's boring as all get outs but nice to see prices stable and low)..I'm not sure the EPA needs to make any decision soon..Corn ethanol is still allowed up-to 15 Billion Gallons a year ..it isn't like they are going to be allowed any more than than. 

 

agree the indecision leaves infrastructure money on the table ..

 

 

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I know that for my family that farms...  any purchase of equipment (tractors, trucks, cultivators, planters...) or facilities upgrade (bins, dryers, grain handlers...) are being put on hold.  If the price of grain on the market is going to stay in the basement, then that money is better kept for the "rainy days" that are sure to follow.  This is killing manufacturers, dealers, construction companies in the ag-sector.

 

My dad always pointed out that "input prices (such as seed, fertilizer, chemicals, fuel, equipment) have a ratchet effect, but market prices have a roller coaster effect"...  when the market prices soar, input prices ratchet up.  When those market prices crash, the "ratchet effect" means that input prices stay high.

 

 

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When those market prices crash, the "ratchet effect" means that input prices stay high.

Yeah, seed corn price isn't coming down any from what I've been told.

Edited by cessna

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Mark my word as soon as the EPA announces that they wont be cutting the RFS as much as first thought and corn prices will surge

If I was 110% sure of your prediction, I'd buy a million bushels on the CBOT-----don't want to be greedy. ;) I just had a little experience with how crazy things are. Had some Sept 14 soybeans sold too soon for $11.96. They hit over 13 but got down to 10.70 a couple of weeks ago. I took my dollar a bushel profit at 10.89 against the brokers advise. Few days later the hit 11.89 and a few days later they're back down to 10.70 closing today at 10.89. If I was better at guessing, could have made another dollar on the way up and a dollar on the way down the second time.

Edited by cessna

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My dad used to say...  (back in the day before every Indian tribe or pseudo Indian tribe had permission to build a casino)...  that gambling is only legal in 3 places in this country, Las Vegas, Atlantic City and Chicago (CBOT)

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