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Herseth Sandlin Rejects Call to Suspend Ethanol Mandate for Drought Relief

If you're going to Mitchell for DakotaFest today to watch Matt Varilek crush Rep. Kristi Noem in their first face-to-face debate, here's a good question to submit to the candidates: "Do you support suspending the ethanol mandate of the Renewable Fuels Standard to increase corn supply and lower prices for food and livestock feed?"

If Stephanie Herseth Sandlin were participating in today's debate, her answer would be No:

Thanks to the RFS and related policies, the advanced and cellulosic biofuels industry has gone from a science experiment to a job-creating industry in the very communities now hit by the drought. Billions of dollars have been invested by the private sector, and steel is going in the ground in rural America right now. Undermining the RFS, or even creating uncertainty around its future, would put the future of those investments, jobs and communities in question.

Granting any waiver based solely on political expediency would be inappropriate. Indeed, that would pile disaster upon disaster for the very communities suffering from the drought, putting us on a path of undoing the RFS's work longer-term. If our priority is helping rural America and continuing to enhance our energy security, we must prioritize protecting the RFS [Stephanie Herseth Sandlin and Tom Ewing, "Leave the Renewable Fuels Standard Alone," Politico, August 21, 2012].

Matt Varilek and Kristi Noem have both expressed support for ethanol, though Noem didn't fight hard enough to continue funding for ethanol blender pumps in the stalled House Farm Bill, and she supported a compromise measure ending tax credits for ethanol producers. But in this case, they must balance ag against ag: ethanol helps corn growers, but it's putting drought-stricken ranchers (and eaters) in a bind. Asking Varilek and Noem (and you, dear readers!) to weigh the ethanol fuel mandate against food and livestock feed is a great way to test the candidates' ability to make hard policy choices. Citizen Herseth Sandlin has made her choice clear; how about you, Matt and Kristi?


  1. larry kurtz 2012.08.22

    As in the LawCo commission testimony it would be interesting to know if Rep. Noem could honestly share her mail from voters as representative of how she voted rather than as a member of the earth hater party.

  2. Frank James 2012.08.22

    Cory, This is a good issue and thank you for covering it. This should be a nonpartisan issue that builds upon our discussion and debate skills. There are legitimate concerns on both sides. Ranchers and cattle feeders struggling to buy feed for their herds and corn farmers who've help build an industry, who want to see the benefits.
    It's interesting that this morning I read a commentary by a grass fed beef producers discussing his decision to cut his numbers and stretch his stockpiled forage versus others who rely upon the release of CRP acres for hay and grazing. Full disclosure, this includes my family. But it does raise a broader question about the reliance of our food and feed systems upon the yearly corn crop. Perhaps we do need to diversify our production systems to encourage grass finishing of beef. This argues for continued and greater funding of the conservation programs in the farm bill.
    Farm Bill questions have been something Representative Noem has apparently been avoiding as well.

  3. Dougal 2012.08.22

    South Dakota used to have active membership in the U.S. House of Representatives.

  4. Troy Jones 2012.08.22

    Cory, I thought you were opposed to ethanol as a meaningful component in the energy independence fight. I specifically remember you calling it a subsidy undeserving of taxpayer support. Am I wrong?

  5. larry kurtz 2012.08.22

    argus leader online poll gives debate to varilek 66 to noem's 30

  6. Roger Elgersma 2012.08.22

    Brazil can produce ethanol cheaper from suger cane than we can from corn. We have limited imports to keep our farm economy up so we could import more ethanol for a short time till the corn supply rebounds. Then when there is more corn again we can brew our own again.

  7. Dan 2012.08.22

    Looks like you found it

  8. Troy Jones 2012.08.22


    Good points. I too haven't figured out whether I support the cessation of the mandate temporarily yet or not. Complex issue.

    Three comments:

    1) I am surprised the administration didn't do it. The net ag effect (livestock vs. corn growers) is probably close to wash economically and politically. But, there is a food price issue which will fan inflation @ least in the near-term and maybe a bit longer which has implications.

    2) The grass fed comment is good. I think this speaks to the importance of a sod buster protection in the Farm Bill. This said, we probably can't increase grass fed beef significantly in the US without taking crop land out of production.

    3) Whether one likes Noem or not on other issues, the non-factual attack with regard to her knowledge and engagement on the Farm Bill does not build the case for Varilek. Everyone who cares about the issue knows that seldom and only on minor issues has a member of our delegation (R or D) differed on the farm bill (effort, knowledge, or engagement). For the sake of productive political debate, in my opinion, Varilek supporters would be better served talking about differences where people will believe there are differences and the differences are real. Same with Noem supporters who try to paint Varilek as opposed to South Dakota farm interests.

  9. tonyamert 2012.08.22

    I would tend to think that a much better plan would be a long term reduction in ethanol subsidies/requirements. That would giver farmers/the markets time to adjust to such a change. Our system is pretty good at handling gradual change and pretty bad at handling shocks/divide by 0 events.

  10. larry kurtz 2012.08.22

    Awesome comment, Troy: nice to see you can write lucidly on occasion.

    Throughout the debate Noem vacillated between her save the farmer speech to her government is bad rant barely even batting those mascara-ed lashes. Her lack of confidence bled through each well-rehearsed paragraph even as she deviated from her script.

  11. grudznick 2012.08.22

    Argus Leader BAH.

    At least the fascination with that young fellow who Ms. Noem is going to spank is letting Mr. Gant catch his breath. Except for Mr. E, who is finding all the meaty nuts while you fellows are sidetracked by Mr. Sibby.

    Argus Leader har har har. I heard the legislature is going to cut how much they get paid.

  12. caheidelberger Post author | 2012.08.22

    Troy, I welcome a review of my past commentary on ethanol. I have at times pointed out the inconsistency in (as Noem and other Republicans do) playing to the Tea Party and Milton Friedman readers yet advocating such constant and drastic intervention in the ag and fuel marketplace. (Hey, what did Friedman think of ethanol?)

    I agree with Frank and Troy that ethanol is a complex issue. Producing our own fuel and getting off oil is a great goal. There are deep questions as to whether plowing and spraying ditch-to-ditch Monsanto corn is the most effective way to meet that goal. Frank makes a great point about how this question is connected to the broader issue of how we raise livestock. (and my pizza's here! break!)

  13. Garyd 2012.08.22

    Tony: First of all, the $.45 blenders credit expired this past January so that is no longer a valid issue.
    Second, oil companies have RINS which are certificates that give oil companies credits for when they blended more ethanol than needed at the time that can be "redeemed" now that we may have a shortage.
    Third, the market IS working as the price of corn has risen some of the ethanol plants have shut down or slowed down because the price of ethanol vs corn.
    Four, you must be a real genius to know for sure what the corn yeild will be when I as a farmer am having a hard time estimating what it is. Especially, when harvest has barely started.

  14. caheidelberger Post author | 2012.08.22

    (mmm, pizza...)

    This point from SHS stands out: she appears to be saying that we need to keep supporting the industry so it can move away from corn to cellulosic ethanol—you know, turning switchgrass into fuel. But a report the National Research Council produced for Congress last year showed that cellulosic ethanol is still far off, expensive, and a big water hog. Cane sugar uses the least water; switchgrass uses more water than corn to produce a given amount of energy.

    I want to believe we can produce our own energy without impoverishing ourselves environmentally or economically. But our best option to get off fossil fuels may not be some magic potion from Frank's fields; it may be just plain using less energy.

  15. caheidelberger Post author | 2012.08.22

    Gary, is that expiration the deal Noem supported? Has ending that blenders credit hurt the ethanol industry or weakened demand for corn?

  16. Justin 2012.08.22

    I'm not really sure who SHS is speaking in support of though. There are lots of different constitutencies involved here. Is she speaking as a land owner or daughter of a landowner? Is she speaking as an investor in ethanol plants?

    I know my own personal interest is in line with what she says, because my family are corn producers without livestock. Trying to put on my fair, altruistic hat, I see it the other way.

    Also as an aside, the USDA is projecting a short term reduction in beef prices due to slaughtering of stock, but overall a food inflation slightly above CPI growth in the shot term.

    My argument as one who is somewhat helped economically by the mandate is that beef producers know and knew what the ethanol mandate was. They shouldn't get bailed out because they made the wrong bet.

    My argument as somebody that thinks the mandate isn't really warranted is that a short term lifting of the mandate doesn't accomplish anything, come back and talk to me when you get rid of it completely.

  17. Garyd 2012.08.23

    Cory: I am sure Noem worked on a deal to ease the blow as far as the blenders credit but it was political reality that it was going away.

    The ethanol industry did adjust for the blenders credit going away but margins at times became much tighter for the ethanol plants.

    Has it weakened corn demand? Maybe some, but with the RFS the oil companies have figured out that they can use ethanol as an octane enhancer because that is the best product we have to do that at this time. If the oil companies could figure out a way to use an oil product that wasn't so toxic as an octane enhancer and the RFS went away, I know corn demand would drop drastically.

  18. Frank James 2012.08.23


    My statement about Noem wasn't meant to be factual, simply my opinion. After listening to parts of the debate yesterday, I believe my opinion is strengthened by her performance. I heard very little substance on her about farm policy or the ethanol industry.
    Still no trying to establish a fact, just a supported opinion.

  19. Charlie Hoffman 2012.08.23

    Cory if we look at ethanol in its primal form, that being a form of energy to power internal combustion engines displacing a percentage of fossil fuel it seems pretty cool. But when we look at the outer rim of the equation it becomes politically challenging. Displacing dollars going to imports from countries who want nothing but the total destruction of America is one point. Displacing crops which could immediately enter the human food chain; like wheat and soybeans another. Taking petro-dollar profits away from pertroleum companies and sending them to farmers in the heartland certainly. But for everyone involved in sustaining natural resources the biggest question must be if we are slowing down the consumption of natural resources or burning them up faster by pushing ethanol into the fuel marketplace. If we just paid every farmer the same amount of money every year just for the sake of staying in the farming complex (a bonus for every year farming of course though) and had the USDA tell him or her what to plant every year would we end up with better food or worse food? And would that process of allocating dollars be sustainable in light of the growing world population?

    Now switch farming with teaching and give me the same response.

  20. Charlie Hoffman 2012.08.23

    And yes that last sentence does have everything to do with profit and merit pay of farmers and teachers respectively.

  21. Jana 2012.08.23

    Charlie, could we add legislators and congresspersons to that list? Although I think the difference between the farming profession and the teaching profession is not a great comparison and begs for a simpleness of thought.

  22. Charlie Hoffman 2012.08.23

    Jana the difference is farmers are 100% in the free market system while teachers are mandated by The Department of Education on how, when, and what to teach; both from a Federal and State system. Simply stated a huge difference in allocation of assets interfering with the free market have been either placed onto or condoned into teaching while farming is still simply profit driven. Trying to put some free market back into the teaching profession is all HB 1234 is trying to do; but sadly the negative publicity may in fact kill it at the polls on November 6th. Simple yet so far away from many minds today.

  23. Justin 2012.08.23

    Farming is 100% in the free market system?

    I've heard politicians tell lies, but I'm not sure I've ever heard one that big.

  24. Charlie Hoffman 2012.08.23

    Justin you are correct in that I mistated the sentence. What should have been there is that what farmers grow is 100% in the free market system. The variables in price supports, insurance subsidies, and tax rebates certainly are not free market support systems.

  25. Jana 2012.08.23

    I thought HB 1234 was to enhance learning for our children...but it's good you are consistent with the direction that ALEC is preaching. After all, I think their goal is the privatization of public schools, right?

    Then of course there is the whole busting up teachers unions. The money being allocated for math and science teachers and teacher bonuses is simply the price of entry into eliminating continuing contracts (I think you call them tenure.)

    We know that smaller class sizes improves learning, but Pierre seems to respond to "there is no budget crisis" by eliminating teachers and programs and then pocketing the surplus revenue toward pet projects.

    Take a look at this Charlie and see if you don't think that would be good for South Dakota's kids.

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