“It is part of the law,” said John Berkel, a Minnesota turkey producer and National Turkey Federation vice chairman. “I hope the administration acts now—if not now, when? How bad does it have to get?” He noted that he has already canceled some of his orders for turkeys in 2013 due to the rising costs.
While NCBA supports ethanol production, it does not support federal mandates selecting “winners and losers,” said J.D. Alexander, a Nebraska cattleman and NCBA president. “I am asking the federal government to let the market work.” Alexander noted that he has already cut his operation to 60 percent of capacity. “We just can’t make the numbers work. We’ve cut back and many of our neighbors have too.”
Meanwhile the drought continues to widen, damaging more acres and driving up corn prices. Corn futures were sharply higher on Monday at a record of $8.20 per bushel. “The prospect of ongoing drought conditions has caused farmers and market analysts to lower their expectations about the potential of the current corn and soybean crops,” according to the CME Daily Livestock Report.
Thomas Elam, president, FarmEcon, LLC, points out that in June, USDA projected corn yields of 166 bushels per acre this year; by mid-July trade expectations dropped that to 138 bushels; now with crop scouting underway, reports are closer to 120 bushels per acre. On Aug. 10, USDA will make its first crop report based on actual field observations.
The National Corn Growers Association (NCGA), staunch supporters of the RFS, were quick to react to the coalition request. “NCGA stands firm in its support of the Renewable Fuel Standard and will strongly oppose legislation to alter or repeal the RFS," said NCGA president Garry Niemeyer. "Likewise, we believe it is premature for a waiver of the RFS provisions at this point. With the crop still in the field, it is too early to determine this year’s final corn supply. In addition, the ethanol industry now has a significant surplus of ethanol and RFS credits that can greatly offset ethanol’s impact on the corn supply."
Niemeyer pointed out that the nation's corn farmers are on the front line of the drought. “Many of our farmer members are suffering immensely from the drought," he said. "Many are also in the same predicament as our customers because they have livestock or own ethanol plant shares. Now is the time for all of American agriculture to pull together and work together for solutions that benefit us all.”