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News Link • Energy

Drought Sparks Battle Over Ethanol Quotas

•, By: John H. Cushman Jr
 Three big intertwined but rival agribusinesses — corn farmers, meat and poultry producers, and biofuel refineries — are in a political fight to protect their interests as a drought ravages corn producers and industrial consumers alike.

 At issue is whether to suspend a five-year-old federal mandate requiring more ethanol in gasoline each year, a policy that has diverted almost half of the domestic corn supply from animal feedlots to ethanol refineries, driven up corn prices and plantings and created a desperate competition for corn as drought grips the nation’s farm belt.

 Meat producers are demanding that the Obama administration waive the ethanol quota to ease rising feed prices. But ethanol producers worry that the loss of the quota will undermine the ethanol industry and do little for corn farmers but drive down the price of their stunted harvest.

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