EPA Denies Texas Governor's Ethanol Waiver Request

While fundamentals don't matter now that the charts are broken, one favorite reason for shorts to claim the GLOBAL demand for fertilizer will break is US ethanol demand. While that demand is about probably worth about 5% of the "cause" of fertilizer demand, it would be a huge sentiment change once the Jim Cramers of the world jump on the bandwagon and claim "death to the story". Again, this story does not matter but the EPA is doing what all good political... err independent bodies do and is denying the request to cut ethanol production in half. Far far far too many farmers in states that rely on corn, to ever allow such a measure ahead of a major election. C'mon now Governor Perry - you know how politics works. [Apr 28: States, CEOs Beginning to Snap Back at Ethanol - the "Administration" Holds Firm]

• The Environmental Protection Agency on Thursday denied a request from Texas Gov. Rick Perry to cut the federal ethanol mandate in half for a year.
• An energy bill passed in December required 9 billion gallons of ethanol to be blended into gasoline this year and about 11 billion gallons next year. Perry asked the EPA in April to drop the Renewable Fuels Standard requirement to 4.5 billion gallons because demand for ethanol is raising corn prices for livestock producers and driving up food prices.
• "I am greatly disappointed with the EPA's inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households," Perry said. "For the EPA to assert that this federal mandate is not affecting food prices not only goes against common sense, but every American's grocery bill." (sadly I agree with Perry - I've called this one of the greatest boondoggles the US has ever done, but the reality on the ground is votes have to be bought - damn the sense of it all. This bill quite beautifully summarizes all that is ill in our "decision making" process at the top of the country - doling of favors ahead of common sense)
• Between January and June, cattle feeders nationwide lost $1.5 billion, officials said. James Hunt, spokesman for the Amarillo-based Texas Cattle Feeders Association, said EPA's decision will mean cutbacks by cattle producers and higher priced beef in meat cases in about a year. (We've predicted this but have not yet been able to make money from it)
• On Capitol Hill, the decision drew mixed reaction.
• U.S. Sen. Chuck Grassley of Iowa, also a Republican, called the decision a "victory," saying it will allow farmers to "continue to plan for and meet the fuel and food needs of the future." (no comment)
• Corn growers agreed. David Gibson, executive director of the Texas Corn Producers Board, said consumers win as ethanol lowers gas prices and reduces America's dependence on foreign oil. (no comment) "Every independent study has confirmed that using corn to make this cheap, clean, American-made fuel has no significant impact on food prices," he said. (aye carumba)
• Perry came under fire early in July after it was reported that he filed his waiver request shortly after a prominent poultry producer donated $100,000 to the Republican Governors Association, which he chaired. (oh the plot thickens)
  

Oh politics!

Long iPath DJ Livestock ETN in fund; no personal position