AMERICAN grain end-users and those concerned about food security are urging their government to reconsider ethanol quotas in the wake of the Iowa floods, saying the high prices are putting them out of business.
Corn has enjoyed a resurgence in the past decade as the US Government pushes for renewable fuels but with supply likely to tighten after the Iowa floods, which have wiped millions of tonnes off expected production, there is renewed lobbying for a scaling back of ethanol mandates.
The next US Department of Agriculture (USDA) estimates in August will be crucial in influencing government decisions on whether it reduces ethanol mandates.
Those against ethanol mandating will have strong support from several groups in Australia such as the Australian Lot Feeders Association (ALFA) which has been a vocal opponents of any form of ethanol mandating in Australia, saying it artificially influences pricing.
Meanwhile, reports from the US suggest that even with mandates the ethanol industry is struggling to make money with corn prices at their current highs.
It is not solely end-users against ethanol mandates - a US lobby group called the Environmental Working Group (EWG) has also come out against mandates.
EWG senior analyst, Michelle Lopez, has written that a failure by the US Congress to reopen the biofuel debate could lead to crippling inflation, pegged into sky-rocketing food prices.
"Our ethanol policy requires perfect weather, and not surprisingly, we aren't getting it," she said, in calling for government to scale back the mandate.