Aug. 10 (Bloomberg) -- A smaller U.S. corn crop caused by drought in the Midwest doesn’t justify calls for the Obama Administration to suspend the country’s ethanol program, the Renewable Fuels Association said.
Refiners can meet biofuel targets by drawing from ample stockpiles and utilizing excess credits, known as Renewable Identification Numbers, that can be submitted in lieu of physically blending a gallon of ethanol to meet the government’s mandate under the Renewable Fuel Standard, the Washington-based trade association said in a statement today.
The U.S. Agriculture Department estimated today that the corn crop will drop 13 percent to a six-year low after the hottest July since 1936 scorched Midwest fields. That’s prompted livestock producers, members of Congress from both political parties in both chambers and the United Nations to call for a temporary suspension.
“Given the abundance of RFS credits, ample ethanol stocks, and various other flexibilities, obligated parties under the RFS will have every opportunity to demonstrate compliance this year,” the group wrote in an e-mailed statement.
Denatured ethanol for September delivery rose 0.4 cent to $2.63 a gallon at 10:01 a.m. on the Chicago Board of Trade. Prices have gained 19 percent this year.
Corn for December delivery sank 0.5 cent to $8.2325 a bushel. Prices yesterday rose to a record $8.2375. One bushel makes at least 2.75 gallons of ethanol.
The Renewable Fuels Association estimates that there are about 2.5 billion credits that refiners can use to meet their obligations.
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