Tom Buis, president of the National Farmers Union, says a new study by the Food and Agricultural Policy Research Institute indicates that moving from a 10% blend to a 15% ethanol blend in gasoline could be a positive development for farmers and the country.
The report shows "increasing the amount of ethanol blended into the gasoline supply to 15 percent will have minimal impact on ethanol, corn, and food prices, while helping to increase farm income and providing value to our economy," Buis says. "This study further reinforces that America's farmers can produce enough corn to meet food and fuel needs without using additional land or disrupting the global food supply."
Buis says the study actually shows there would be a "zero percent change in consumer food expenditures" as a result of increasing the blend. At the same time it would increase net farm income by $460 million.
"Previous studies have shown a higher ethanol blend will create and support more than 130,000 new green-collar jobs and inject $24.4 billion into the U.S. economy annually," Buis says.
There has been a great deal of controversy in the Carolina-Virginia farming region about the potential increase in the ethanol blend. Many crop farmers, expecting higher crop prices to be the result, say the idea is a good one. On the other hand, many livestock producers say it could greatly increase their feed costs. They point to escalating costs resulting from the government mandate for blending 10% ethanol into fuel and note the higher costs threatened the livelihood of many livestock producers.
Guy Davenport of Cresswell, N.C., a director on the National Corn Growers Association, recently told Carolina-Virginia Farmer that when corn prices ran up last year the reason was not a real shortage in corn cause by ethanol production but the result of futures speculation.
Download the complete FAPRI report, Impacts of Selected U.S. Ethanol Policy Options, at www.fapri.missouri.edu.