The silver lining in the current drought may be some reconsideration of ethanol mandates. Currently, gasoline refiners have to purchase a certain amount of ethanol, made largely from corn in the US, to meet EPA renewable fuel quotas. While ostensibly an oxygenator, the ethanol is really a payoff to grain farm interests because it creates a huge market for corn and increases prices. With corn prices high already as a result of the drought, beef, pork and chicken suppliers are being squeezed as feed costs soar. They are asking EPA for a waiver of the renewable fuel standard, so that less corn goes into ethanol and more can go to livestock. Perhaps at some point there will be a reconsideration of whether the government should be requiring use of ethanol in the first place.
Bloomberg has a report here.
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