Global leaders to press US on biofuels output

The United States will come under increasing pressure from global leaders to change its biofuels policy to alleviate global food concerns, according to Reuters.

Members of the Group of 20 are considering convening a meeting to discuss responses to the U.S. drought and a poor Russian grain haul. Analysts told Reuters on Monday that nothing substantive might occur, but that international heads of state might call out the United States for its biofuels production.

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With the United States devoting about 40 percent of its corn acreage to biofuels production, other countries and the United Nations have expressed concern that drought could shake global food markets.

Lawmakers, ranchers and environmentalists have pushed the administration and the Environmental Protection Agency (EPA) to exercise a little corn ethanol wiggle room. They want the EPA to wholly or partially waive a rule that requires domestic refiners to blend 13.2 billion gallons of corn ethanol into traditional fuel this year.

White House spokesman Jay Carney last week said, “The EPA, in consultation with the Department of Agriculture, is looking at this. I don't have a statement one way or the other predicting what the experts are going to say.”

But the biofuels industry claims the corn ethanol rule can only be waived when refiners cannot meet that blending target. The industry contends that will not be a problem this year.

Global leaders want to avoid a situation similar to 2007 and 2008, when spiking food prices caused riots in poorer countries. U.S. corn prices hit an all-time high Friday after the Agriculture Department released disappointing harvest projections that would be the lowest since 2006.