MacKie: A.B.A. supports lower ethanol mandate

by Ron Sterk
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WASHINGTON — In testimony at a public hearing Dec. 5, Robb MacKie, president and chief executive officer of the American Bakers Association, said the baking industry supports the Environmental Protection Agency’s proposal to lower the corn-based ethanol mandate for 2014, but wants the E.P.A. to go further to reduce market volatility.

“The A.B.A. recognizes and supports the E.P.A.’s modest proposal to lower the corn-based ethanol mandate in the 2014 Standards for the Renewable Fuel Standard Program,” Mr. MacKie said at the hearing, which collected testimony from a scheduled 25 panels that included environmental, agricultural and economic policy groups, food producers, the livestock industry and members of Congress in addition to the A.B.A., which represents more than 700 baking facilities and their suppliers.

“However, we strongly encourage E.P.A. to move to further alleviate the volatility that corn-based ethanol creates in the grain markets,” Mr. MacKie continued. “The wheat market typically follows the corn market, so when the R.F.S. drives corn prices higher, wheat prices also rise. Some studies show that the R.F.S. drove corn prices up by 35% during the 2011-12 crop year. During the same time, wheat prices rose by 22%. These spikes impact market volatility and create market uncertainty for the baking industry. Ultimately, it is the American family that pays the price.”

“Corn-based ethanol is a factor that has led to decreased wheat acreage in the U.S.,” Mr. MacKie said. “In fact, in Kansas, the wheat basket of the country, more corn is grown than wheat.”

The E.P.A. on Nov. 18 proposed the 2014 ethanol mandate be lowered from 18.15 billion gallons to between 15 billion and 15.52 billion gallons. Of the total, corn-based ethanol would be lowered from 14.4 billion gallons to between 12.7 billion and 13.2 billion gallons. If approved, it would be the first time the mandate has been reduced. About 35% of the U.S. corn crop is used to produce ethanol.
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