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Corn growers pump up ethanol

After voting for shifts in farm policy and ethanol subsidies Saturday, members of the National Corn Growers Association went through an exercise that generated little controversy.

Delegates to the Corn Congress at the end of the Commodity Classic in Tampa, Florida, ranked the priorities the organization should work on in the coming year.

It shouldn’t be surprising that ethanol came out on top, ahead of six other choices, in the following order – farm policy, communications, environmental regulations, transportation, trade, and, last, research on new uses.

Even though ethanol has almost no effect on what consumers pay for corn flakes at the grocery store, corn farmers are well aware that their ethanol market is huge, just slightly smaller than livestock use. USDA projects 4.95 billion bushels of corn being distilled into fuel this year, out of a supply of just over 14 billion bushels from the 2010 harvest and ending stocks.

Earlier in the meeting, delegates voted in favor of shifting part of the current 45 cent a gallon ethanol tax credit to federal support for infrastructure that will help ethanol reach more consumers in the marketplace.

The new policy says: “NCGA supports reforming ethanol tax policy. Ideas to replace existing tax law, in the following priority order: a variable ethanol tax credit, an ethanol tax credit at a reduced rate. Non-tax policies should include: biofuels infrastructure, higher blends, corn starch ethanol as an advanced biofuel, favorable flexible fuel vehicle policy.”

That puts NCGA in line with ethanol lobbying groups—American Coalition for Ethanol, Growth Energy and the Renewable Fuels Association. They’re facing declining support in Congress for the tax credit, which was renewed at the last minute in December’s tax legislation and will expire again at the end of 2011.

Growth Energy has been the most aggressive in advocating shifting money that would be saved from ending the tax credit to helping to pay for blender pumps, ethanol pipelines and flexible fuel vehicles. But all of the groups recognize the threat facing the tax credit and support building up infrastructure.  

Past NCGA president, Darrin Ihnen, has worked to help bring the ethanol groups together on policy.

“What the Corn Congress passed today gave us the flexibility to work with the industry and to work with Congress to advance further development of renewable fuels,” the Hurley, South Dakota farmer told Saturday.

It won’t be easy.

The House has already passed amendments against part of the resolution NCGA supports – higher blends and biofuels infrastructure.

Last month when it cut $61 billion from this year’s federal spending, the House approved an amendment to stop EPA from putting 15% ethanol blends (E15) into effect this year and it okayed another amendment to stop USDA from helping to finance installation of blender pumps by gasoline retailers. The pumps allow consumers to choose from several levels of ethanol in their gasoline.

When House Agriculture Committee Chairman Frank Lucas (R-OK) visited the Commodity Classic on Friday, he talked to NCGA first vice president,  Garry Niemeyer, who farms near Auburn, Illinois.

“He made mention, ‘I guess you guys know I did not vote for E15 but I did vote for blender pumps,’ “ Niemeyer said, describing the meeting with Lucas to

Lucas told Corn Grower leaders that he supports the NCGA’s support for ethanol but that he’s also worried about the impact of higher corn prices on Oklahoma’s livestock farmers, Niemeyer said. “I said, Congressman Lucas, I would be happy to tell you the second we produce a 14.5 billion-bushel corn crop. My whole point is that we have the ability to do that because we have the technology.”

So far, in the congressional battle over the budget, the Senate hasn’t adopted the amendments that target ethanol.

And with rising gasoline prices, Corn Growers may be able to get consumer support for ethanol – if they can battle widely held misconceptions about the fuel. NCGA’s CEO blamed the misinformation on environmentalists and the editorial pages of the Wall Street Journal when he gave his report to the group Saturday.

NCGA is working with NASCAR to promote E15, by publicizing the stock cars’ use of E15 on the racing circuit. That’s another effort headed by Ihnen.

When asked if he thinks Congress will continue to support E15, Ihnen said, “Again, it boils down to: Does the consumer want to buy a domestic energy source or want to spend money on overseas oil?”

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