The Obama administration is required to rule by next Tuesday on whether or not to suspend the regulation as it has been asked to do by a wide range of ethanol makers and politicians from both sides of the political aisle. In order suspend the regulation, the administration has to declare that the mandate is causing economic harm.
That won’t be easy to do. Objections from farmers to suspending the standard have long be a determining factor in the maintaining the ethanol standard. We’ve said many times here that the ethanol mandate is really a farm subsidy and not a serious attempt to deal with environmental issues, and now we’re going to see what the Obama administration thinks the mandate is.
Ethanol production is expected to consume about 42% of this year’s corn crop, and the current price of around $7.45 a bushel is sure to rise as the supply dwindles. According to Bloomberg, that means that losses could rise to $0.36 a gallon based on December contracts for corn and ethanol. Last year ethanol makers were making a profit of $0.24 a gallon on ethanol.
Large ethanol makers like Archer Daniels Midland Co. (NYSE: ADM) and Valero Energy Corp. (NYSE: VLO) are in the same boat as smaller suppliers. Valero has already temporarily closed 3 of its 10 ethanol plants and 3 more are operating at reduced capacity.
Our best guess is that the mandate won’t be suspended, at least not next week. Farm states and agriculture are too important to too many people, and there’s no reason to make them mad so soon after an election.
Paul Ausick
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
