Sen. Carper Concerned by Disappointing New USDA Corn Yield Report; Urges Administration to Aid Farmers and Growers Hurt by High Corn Prices

WASHINGTON – Today, Sen. Tom Carper (D-Del.) expressed concern about the disappointing findings of the new U.S. Department of Agriculture’s (USDA) report that this year’s corn yield is expected to be the lowest in 17 years. Production estimates for some major crops, including corn, were significantly reduced from earlier this year, in part because of damage due to America’s worst drought in 56 years. Recently, the USDA declared Kent and Sussex Counties in Delaware disaster areas due to damage caused by recent extreme weather conditions, making farmers, ranchers and agricultural producers in these counties eligible for Farm Service Agency emergency loans.

The seriousness of the drought and its harmful impact on corn and other crops’ prices underscores the need for the Obama Administration to explore all options available under current law to aid struggling farmers and growers. Earlier this week Sen. Carper joined a bipartisan group of 25 lawmakers led by Senators Kay Hagan (D-N.C.) and Saxby Chambliss (R-Ga.) in writing to Environmental Protection Agency Administration Lisa Jackson urging her to use the agency’s authority to adjust the corn-based ethanol mandate of the Renewable Fuel Standards (RFS). For 2012, the RFS program requires that 13.2 billion gallons of corn-based ethanol be blended into the U.S. gasoline supply. Under the current RFS program, the EPA Administrator has the authority to waive all or portions of the RFS program in instances of economic or environmental hardship. Sen. Carper is hopeful that the EPA will modify the corn-based ethanol requirements of the RFS program in light of the negative impact on America’s poultry and agriculture industries due to high corn prices brought about by this year’s extreme drought. An adjustment to the mandate would bring much needed relief to farmers and growers by helping to ease corn shortages and reduce high corn and gas prices.

“This year’s record drought has wreaked havoc on many of Delaware’s farmers and agricultural producers,” said Sen. Carper. “Last month, I visited a farm in Sussex County and saw firsthand the devastating damage this drought has caused for Delaware’s corn and soybean growers. The USDA’s report on expected yields for corn and other crops for this year is disappointing to say the least, and underscores the need for additional measures from the Administration to help provide relief to our farmers and growers. A few weeks ago, I spoke with USDA Secretary Vilsack to express my concern with the impact of the drought on Delaware farmers, and I urged him to work with his colleagues in the Administration to ensure that the federal government is doing all it can to help our farmers and growers through this historically challenging time. One of the tools available to the Administration is the ability of the Administrator of the U.S. Environmental Protection Agency to adjust the fuel requirements of the Renewable Fuel Standard program in cases of economic or environmental hardship. I am hopeful that the Administration will utilize this waiver authority to modify the corn-ethanol portion of the RFS program in light of the impact to American poultry and agricultural producers of high corn prices caused from this year’s historic drought.”

The letter was also signed by U.S. Senators Mark Pryor (D-Ark.), John Boozman (R-Ark.), Barbara Mikulski (D-Md.), Ben Cardin (D-Md.), Johnny Isakson (R-Ga.), Christopher Coons (D-Del.), Kay Bailey Hutchison (R-Texas), Dianne Feinstein (D-Calif.), Jeff Sessions (R-Ala.), Richard Burr (R-N.C.), Lisa Murkowski (R-Alaska), Jim Webb (D-Va.), Tom Coburn (R-Okla.), Lindsey Graham (R-S.C.), Tom Udall (D-N.M.), John McCain (R-Ariz.), Mary Landrieu (D-La.), James Risch (D-Idaho), Jean Shaheen (D-N.H.), Mike Crapo (R-Idaho), Joe Manchin (D-W.Va.) and Roger Wicker (R- Miss.).

The text of the letter is as follows:

August 7, 2012

Administrator Lisa P. Jackson
U.S. Environmental Protection Agency
Room 300, Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, D.C. 20460

Dear Administrator Jackson:

With record droughts across the continental United States causing corn supplies to shrink and prices to spike, we ask you to use your existing waiver authority to adjust the corn-ethanol mandate for the Renewable Fuels Standard.

As you know, the Renewable Fuels Standard (RFS) — approved as part of the Energy Independence and Security Act of 2007 (EISA) — increased the original RFS. It was designed to enable continued utilization of corn-based ethanol as next-generation biofuels developed and assumed an increasingly larger share of the total RFS. While we believe the RFS will stimulate advanced biofuels to commercialization, adjusting the corn grain-ethanol mandate of the RFS can offer some relief from tight corn supplies and high prices.

As part of EISA, the Congress included “safety valves” that enable the agency to adjust the RFS in the event of inadequate supplies or to prevent economic harm to the country, a region, or a state. Recent data from the United States Department of Agriculture (USDA) suggests the EPA should exercise its waiver authority for the conventional, corn grain-ethanol mandate.

Earlier this year, the USDA indicated that 72 percent of the U.S. corn crop was in good or excellent condition. However, because of persistent extreme heat and drought, the USDA recently rated only 23 percent of the crop as good to excellent and 50 percent as poor to very poor. USDA’s July World Agricultural Supply and Demand Estimates (WASDE) report projects that 2012/13 U.S. corn yields would be 146 bushels per acre, 20 bushels less than two months ago.

As stressful weather conditions continue to push corn yields lower and prices upward, the economic ramifications for consumers, livestock and poultry producers, food manufacturers, and foodservice providers will become more severe. In fact, USDA recently announced that the drought gripping half the country will help push food prices above-normal food price inflation to 3 percent to 4 percent next year. Therefore, we ask you to adjust the corn grain-ethanol mandate of the RFS to reflect this natural disaster and these new market conditions. Doing so will help to ease supply concerns and provide relief from high corn prices.