In its latest estimates on global supply and demand, the Agriculture Department, this week, cut U.S. corn ending stocks from 902 to 827 million bushels, down from nearly two 2 billion bushels the previous year. That puts the domestic stocks to use ratio at 6%, its lowest in 15 years.
More than one-third of the corn is expected to be used as feedstock for ethanol production, and the bull market in commodities has also ignited the familiar "food vs. fuel" debate.
Targeting ethanol as public enemy number one a broad coalition of advocacy groups filed suit this week against the EPA over its decision to authorize increased blends of ethanol.
A diverse coalition of farm and food trade associations, along with the American Petroleum Institute, or API, filed suit this week against the Environmental Protection Agency. The plaintiffs hope to overturn EPA's recent decision to allow gasoline containing 15 percent ethanol to be used in cars produced since 2007.
API, which represents more than 400 oil and gas companies, says the EPA "lacks statutory authority" to approve an increase in the ethanol content of gasoline.
Farm and food petitioners in the suit include the Grocery Manufacturers Association, the American Meat Institute, the National Turkey Federation, the National Chicken Council, and the National Pork Producers Council.
The Coalition claims, "In approving E15, which is compatible only with certain, later-model automobile and other types of engines, the EPA has clearly exceeded its authority under the Clean Air Act. The EPA has unlawfully interpreted the statute to achieve a particular outcome. The agency has a legal obligation to adhere to the letter and spirit of the Clean Air Act and, in this case, has failed to do so. We are confident that the Court will agree and require the EPA to reverse course."
A spokesperson for EPA argued the decision was "grounded firmly in science" …and said "the decision is sound, and the agency is confident that it will withstand legal challenge."
Last month, EPA announced a new standard of E15, a blend of 15 percent ethanol and 85 percent gasoline, is safe for vehicles built in model year 2007 or newer. However, EPA stopped short of approving E15 for vehicles made prior to 2007, claiming further testing is needed. Ethanol industry officials say an EPA decision authorizing higher blends in models produced since 2001 could open up more than 50 percent of the U.S. vehicle fleet to E15.
Growth Energy, a biofuels advocacy group, originally petitioned EPA to raise the blend rates. But the decision has faced numerous delays as federal officials have cited the need for additional testing between EPA and the Energy Department.
EPA expects to announce its final ruling on increased blends for older vehicles later this month.