Earlier this month, the Wall Street Journal published Letter to the Editor of mine, which was in response to "Ethanol vs the World." On the same day, the Journal published yet another sarcastic screed, “How Ethanol Causes Joblessness” that ridiculed what it claims was the methodology behind a study by academic economists that showed the increased use of domestic ethanol fuel lowered gas prices by a national average of $1.09 in 2011. Responding to this attack, I submitted another editorial, which was rejected by the Editorial Features Staff. Please read said editorial in this post.
This summer, several governors have submitted letter to the EPA requesting a waiver of the RFS for 2012 and 2013. Analysis from the RFA shows that waiving the RFS requirements for 2013 would actually result in a net increase in annual household spending of approximately $24-$85 due to increased spending on gasoline. Thus, waiving the RFS in 2013 would do more harm to American consumers than if EPA allows the program to continue to function as designed.
U.S. exports of ethanol (denatured and undenatured, non-beverage) totaled 59 million gallons (mg) in June. Year-to-date exports stood at 426.4 mg, implying an annualized total of 852.9 mg; however, anecdotal information suggests ethanol exports dropped off precipitously in July.
As expected, this morning's supply-demand estimates from USDA showed a big reduction in the size of the 2012 corn crop and average yield. Today's report estimates average yield at 123.4 bushels per acre (bpa), down nearly 23 bpa from USDA's July estimate and the lowest yield since 1995.
Tomorrow morning’s USDA World Agriculture Supply-Demand Estimates (WASDE) report may very well be the most highly anticipated report in the agency’s long and storied history. It will offer USDA’s first survey-based estimates of the 2012 corn crop and average corn yields; and the universal expectation is that the persisting hot, dry weather in the Corn Belt this summer has substantially reduced the size of the crop.
A July 30th op-ed, "Corn for Food, Not Fuel" in the New York Times deserves an Olympic gold medal for misinformation claiming ethanol is more expensive than gasoline and that waiving the RFS will significantly lower corn prices. Ethanol is continuing to help consumers and the pump.