Aug. 10 (Bloomberg) -- The Obama administration is reviewing the country’s ethanol policy amid calls from both political parties and the United Nations to suspend annual targets as the worst drought in 56 years spurs corn prices.
Twenty-five U.S. senators, both Republicans and Democrats, asked Lisa Jackson, administrator of the Environmental Protection Agency, to halt or lower mandates on how much ethanol the country must use this year and next. The senators’ Aug. 7 letter followed an Aug. 1 petition from a bipartisan coalition of 156 members of the House of Representatives.
“I would simply say that the EPA, in consultation with the Department of Agriculture, is looking at this,” Jay Carney, the White House press secretary, said today in Washington. “I don’t have a statement one way or the other predicting what the experts are going to say.”
Jose Graziano da Silva, director-general of the UN’s Food & Agriculture Organization, called for a suspension of U.S. government-mandated ethanol output to allow more of the corn crop to be used for food and livestock feed, the Financial Times reported today.
The Agriculture Department cut its forecast for the 2012 U.S. corn harvest by 13 percent from 2011 to 10.8 billion bushels, the lowest level in six years. Ethanol will consume about 4.5 billion bushels, or 42 percent of the crop.
Corn for December delivery slid 1.8 percent to settle at $8.0925 a bushel today on the Chicago Board of Trade. Prices yesterday settled at a record $8.2375.
Denatured ethanol for September delivery fell 1.7 cents, or 0.6 percent, to settle at $2.609 a gallon in Chicago. One bushel of corn makes at least 2.75 gallons of the fuel.