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Give us a break from ethanol, drought-hit livestock producers ask EPA

Heat wave continues across much of the nation as more than half the country is dealing with a moderate drought conditions. NBC's Jay Gray reports.

Competing for corn with ethanol producers at a time of sky-high prices and drought, cattlemen and other livestock producers have asked for some relief but their plea has yet to get the needed support.

The help would have to come via the Environmental Protection Agency, which has the power to temporarily reduce the amount of ethanol required to be mixed into gasoline for vehicles. Since ethanol is cleaner than petroleum, its use in vehicles helps reduce overall air pollution. 

But the request for a waiver must come from a state or a refiner -- and a day after the plea was made that still hasn't happened.

"Our ears are open and the line of communications is open," Mike Deering, a spokesman for the National Cattlemen's Beef Association, told NBC News. But, he added, "we do not have any definitive news at this point and time."

The Renewable Fuels Association, an ethanol trade group, told NBC News that it "wouldn't be surprised" to see a request.

In a statement, the EPA told NBC News that it was in "close contact with USDA as they and we keep an eye on crop yield estimates, and we will review any data or information submitted by stakeholders, industry and states." 

A drought is now gripping more than half of the nation, with the latest U.S. Drought Monitor showing some of the worst areas are expanding. In Tennessee, crops are dying and families are struggling to face the losses. NBC's Thanh Truong reports.


Still, Mark McMinimy, biofuels analyst at Guggenheim Partners Washington Research Group, told Reuters he wasn't expecting any change. "I am not sure if this changes the landscape all that much," he said of the livestock producers' plea. "EPA officials and the secretary of agriculture (Tom Vilsack) have all indicated that they are not considering a waiver at this time."

Texas Gov. Rick Perry failed in his attempt to get a waiver in 2008, and the November elections could make for continued status quo given that President Barack Obama and many other lawmakers are strong supporters of ethanol, which is hugely popular in farm states.

America's ongoing drought disaster is getting worse before it gets better. NBC's Chris Clackum reports.

Corn prices have risen 60 percent in six weeks, Reuters reports, and about a third of the U.S. corn supply is used for ethanol. About as much is used as animal feed.

"The drought-induced reductions in the corn supply means that the mandated utilization of corn for renewable fuels will so reduce the supply of corn and increase its price that livestock and poultry producers will be forced to reduce the size of their herds and flocks, causing some to go out of business and jobs to be lost," the cattlemen's association and other livestock groups said in their letter to EPA chief Lisa Jackson.

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