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01.08.2012 |

US Drought: Farmers Call for Suspension of Maize-based Ethanol Production

Drought-stressed corn in Western Tennessee (Photo: CraneStation/flickr)
Drought-stressed corn in Western Tennessee (Photo: CraneStation/flickr)

On Monday, US farmers and livestock groups called on the Environmental Protection Agency (EPA) to reduce or suspend the use of maize for ethanol production for an entire year. The ongoing drought in large parts of the US has led to soaring grain prices, causing concern about food supplies and high feed costs for cattle farmers. “We are having trouble buying corn”, said J.D. Alexander, president of the National Cattlemen's Beef Association. “It's time to wean the ethanol industry and let it stand on its own.” In the US, around 40% of maize production is used to produce ethanol which is added to fuel in order to fill American petrol tanks. The EPA has the mandate to reduce the quotas, but has not granted a waiver since the Renewable Fuels Standard came into force in 2007. EPA officials announced that a waiver is currently not being taken into account. The request does not come as a surprise: Livestock farmers have been severely hit by the 50% increase in maize and wheat prices over the last six weeks following the worst drought in the US since 1956. According to a Reuters poll of 13 analysts, maize production will drop to 11.3 billion bushels, and soybean production to 2.834 bushels – the lowest figures in six and nine years respectively. These figures largely coincide with estimates from the US Department of Agriculture released last week.

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