JEFFERSON CITY - Despite the high amount of livestock in Missouri, it is not one of the seven states to petition for a waiver to the federal ethanol mandate.
As a severe drought continues to affect Midwest farmers, the nation's corn crop yield could be as much as 60 percent below normal value this year. Every year, 35-40 percent of corn crop is diverted to ethanol production, according to the U.S. Department of Agriculture. The cost of corn has risen dramatically due to low production rates.
Except for certain circumstances, all gasoline offered in Missouri must contain 10 percent ethanol, according to the Missouri Renewable Fuel Standard Act passed in 2006. The exceptions include: premium gasoline, aviation fuel, E75-E85 fuel ethanol and when ethanol-blended gasoline is the same price or cheaper than unblended gasoline.
A federal mandate passed in 2005 established requirements on the amount of ethanol that has to be blended each year. This year 13.2 billion gallons of ethanol have to be blended into gasoline nationwide. On Aug. 30, the Environmental Protection Agency began a 30-day open-commentary period about the mandate. During the commentary period, the public can give feedback on the possibility of granting waivers to ease the requirements for states claiming they cannot meet the demands of the mandate because of the drought.Many livestock groups have been struggling from the mandate because the price of corn has risen so dramatically, according to the National Cattleman's Beef Association's website. Last month, Gov. Rick Perry announced Texas joined a coalition of more than 180 members of Congress and multiple states, including Arkansas, one of Missouri's neighbors, to request waivers, according to an article by the National Cattleman's Beef Association.
Missouri has a livestock inventory of 4.25 million cattle according to the Missouri Department of Agriculture. However, Missouri is not one of the states to join the coalition.
Missouri House Representative Casey Guernsey, (R-Belton), is a seventh generation family farmer and a leading cattleman in Missouri. He said although he is a huge supporter of alternative fuels, he feels that as the cost of corn increases uncontrollably, something needs to be done to alleviate costs. He said he would like to see a waiver to the ethanol mandate.
Calls to Gov. Jay Nixon's office about the coalition were not returned, however, in 2008 the governor said he fully supported the 10 percent ethanol mandate at a press conference at the Missouri State Fair .
The NCBA website said it supports a waiver, however the Missouri Cattleman's Association said it supports the mandate.
"We support the ethanol mandate because we support the federal government," said Sami Freeman, Director of Communications of the Missouri Cattleman's Association.
The EPA said the only way a waiver request will be useful is if it can fully prove the mandate itself is harmful to a state's economy.Gary Marshall, CEO of the Missouri Corn Growers Association, also said last week that his association offers guidance to corn growers and will be active in helping deal with the interactions of farmers with ethanol plants. Marshall said the price of corn will increase and carry over to farmers while crop insurance coverage is instrumental in pushing farmers through the tough season.
The price of gas prices is also on the rise because the price of ethanol has increased.Patrick Westhoff, director of the Food and Agricultural Policy Institute, said last week that ethanol production will decrease by 10 percent this year, while consumption demands will only decrease by 2 percent.
"Well we do expect to see a higher ethanol price this year than last year, that's already happened to some extent," Westhoff said. "So we are seeing higher ethanol prices than we were before the drought hit that means a little bit higher cost for all consumers of fuel."
Mark Merritt, the public relations manager at POET Biorefining, said this scale back in production has not had an effect on the demand of ethanol, so market forces are causing the rise in gas prices.
"Well ethanol is certainly an important component of the price of gasoline right now," Merritt said in an interview last week. "Across the nation it is 10 percent of the gasoline supply and we all know what happens when even a small percentage of the gas supply from any area gets affected."Merritt said creativity will be needed with farmer and ethanol industry relations to manage the new harvest arriving in the coming months. The EPA will decide if waivers to the ethanol mandate will be granted by Nov. 12.