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Texas governor overlooks ethanol's effects on grain industry, gas pricesTexas Texas Governor Rick Perry held a press conference in Washington, D.C., June 25, concerning his request for a 50 percent reduction in the renewable fuels standard. Meanwhile, the governor continues to ignore the effects such a waiver would have on other sectors of agriculture in Texas. "The governor has not mentioned what the impact of his request might be to the corn and sorghum producers in Texas," said David Gibson, executive director of the Texas Corn Producers Board. "I hope if the waiver is granted the governor will consider the impact of lower corn prices and look for solutions to solve the escalating cost of inputs that corn farmers are facing." Gov. Perry mentioned in his request to the Environmental Protection Agency that a 1 cent move in corn price results in losses for the Texas livestock sector, but does not mention the economic impact it has on grain producers in the state, which provided $2.7 billion to the Texas economy in 2007. "How does lowering grain prices against higher production cost not put the grain producers at risk of losing money and then being at risk of losing their farms?" Gibson asked. "Lowering grain prices also tends to cause a reduction in acres of grain, which could have an unexpected effect on the market by lowering grain supplies and increase grain prices after a smaller crop is grown." The governor failed to address the real issue, which is energy cost. "All studies have indicated that energy for manufacturing and transportation along with labor costs have had the largest impact on the cost of food," Gibson said. "Ethanol is part of the solution in reducing the price of fuel at the pump." Henry Bryant, research assistant professor with Texas A&M's Agricultural Food and Policy Center, presented a new report June 9 at the 2008 Texas Ag Forum in Austin that, without ethanol, gasoline prices would be 42 cents per gallon higher. Bryant's report, "Effects of Ethanol Production on U.S. Gasoline Prices," is available at http://agforum.tamu.edu. 7/14/08 Date: 7/10/08
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