California Judge Finds State's Low Carbon Fuel Standard Unconstitutional
A judge in Federal District Court in Fresno, California, has sided with America's ethanol industry in ruling that the State of California's Low Carbon Fuel Standard (LCFS) is unconstitutional. Judge Lawrence J. O'Neill agreed with the arguments that the LCFS is in violation of the Commerce Clause of the U.S. Constitution.
"This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state's border," said National Corn Growers Association President Garry Niemeyer. "Corn farmers are good stewards and advocates for thoughtful, fair strategies that will improve our environment through the advancement of biofuels. We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions."
On December 24, 2009 the Renewable Fuels Association and Growth Energy filed suit asserting that the California LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states. NCGA contributed funding in support of the suit.
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Look Ahead: Environmental Lawsuits Could Have Major Impact in 2012
NCGA is currently involved in two major pieces of environmental litigation that will likely be decided in federal court in 2012. This could have major implications for future environmental regulations.
Earlier this year, NCGA joined with the American Farm Bureau Federation and other agricultural organizations to challenge the Environmental Protection Agency's Total Maximum Daily Load for nitrogen, phosphorus and sediment in the Chesapeake Bay. The farm groups stated the Chesapeake Bay TMDL goes beyond the scope of Clean Water Act authority, that the science used by the Agency is flawed and that the regulatory process lacked transparency. The case has been filed in a federal court in Pennsylvania.
The outcome of this lawsuit could establish significant precedent for future water quality regulations throughout the country. Many corn growers are concerned that the Chesapeake Bay TMDL could be used as a blueprint for addressing nitrogen, phosphorus and sediment runoff in the Mississippi River Basin and other watersheds. In recent months, EPA has begun to publicly question its own confidence in the agency's water quality modeling, particularly for establishing localized nutrient allocations.
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Increased Pork Demand from Abroad Supports U.S. Hog, Corn Markets
Increased export demand for U.S. pork is raising pork profitability and leading to an overall rise in the national hog inventory according to a December reports released by the U.S. Department of Agriculture's National Agricultural Statistics Service and Economic Research Service. NCGA welcomes this growth, which translates into stronger demand for corn and distillers dried grains.
"Corn farmers value our relationship with the hog industry, which consistently provides an important market for our product," said NCGA President Garry Niemeyer. "In 2011-12 marketing year, it is estimated that hogs will consume 960 million bushels of corn. As demand grows for pork both internationally and domestically, corn farmers benefit also thus reinforcing the importance of cooperation among all sectors in the agricultural community."
USDA Economic Research Service projects a significant increase in pork exports during the fourth quarter of 2011, with 1.4 billion pounds of pork exported during this period. This 22 percent increase over fourth quarter exports in 2010, if realized, would set total 2011 U.S. pork exports at more than 5.1 billion pounds. Further agency estimates indicate these levels will hold in 2012.
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U.S. Corn Mission Sees Potential in Vietnam
As the entrepreneurial spirit in Vietnam continues its rapid growth, U.S. farmers see increasing potential in this rapidly growing market. During a recent mission to the country, organized by the U.S. Grains Council, participants saw first-hand the opportunities in this market while also learning the importance of a carefully nuanced approach to the expansion of U.S. agricultural exports in this region.
The nine team members, all of which represent state corn marketing groups, met with international customers and key foreign government officials with whom they shared insight into the U.S. corn supply and quality in 2011. Vietnam, which has the fastest growing corn market in Asia, currently fills its corn needs with domestically grown crop and imports from nearby countries, but the group left meetings encouraged that this market has the potential to import U.S. corn.
"The dramatically changing consumer habits will increase grain demand in Vietnam. We need to continue to educate Vietnamese buyers and farmers on benefits of buying from the United States," said Corn Marketing Program of Michigan President Pat Feldpausch, who participated in the mission. "The United States has a dependable system that provides transparency and risk management. We are a consistent supplier and buyers get better value for their purchases. Buying corn from nearby countries or from Ukraine is a risk. You may get a bargain but it's a gamble."
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