U.S. farm income is taking a hit due in part to EPA proposals to relax the federal mandate to mix ethanol into gasoline, said the National Farmers Union and the National Corn Growers Association. In a white paper, the groups said the long-delayed announcement by EPA has created uncertainty and reduced the market for corn, the most widely grown crop in the country. Nearly 40-percent of the crop – more than 5 billion bushels a year – is used in making the renewable fuel.
The EPA has proposed a mandate that is more than a billion gallons lower than set by Congress in 2007. A bushel of corn yields around 2.8 gallons of ethanol, so it would take nearly 360 million bushels to make a billion gallons.
The two farm groups said ethanol is a success story for rural America and reduces U.S. reliance on imported oil. NFU president Roger Johnson said that it is “imperative President Obama gets the [mandate] back on track,” said Agri-Pulse. NCGA president Chip Bowling said corn prices have fallen on the prospect of less demand for corn.