Corn prices would not necessarily moderate if the U.S. Environmental Protection Agency temporarily suspends the corn ethanol mandate, according to a report by three Purdue University economists. The authors of the report, “Potential Impacts of a Partial Waiver of the Ethanol Blending Rules,” include Wallace Tyner, Farzad Taheripour and Chris Hurt.
The report does suggest that corn prices could fall under some scenarios should the EPA grant a partial waiver of its Renewable Fuels Standard, but that would occur only under certain market conditions.
The report outlines the impact of an RFS waiver that goes from zero to $1.30 per bushel for corn.
EPA’s RFS mandates that 13.2 billion gallons of ethanol be blended with gasoline in 2012; that number increases to 13.8 billion gallons in 2013.
Numerous state governors have joined to request that the RFS is waived at least temporarily, as have 156 U.S. congressmen and 34 senators. Various agricultural groups, particularly those representing sectors that are dependent on the drought-reduced corn supply such as the National Pork Producers Council, have been actively lobbying for a waiver. EPA is accepting public comments on the issue through Oct. 11.