The Environmental Protection Agency (EPA) is calling for public comments on the reduction of the national Renewable Fuels Standard (RFS) by half. This is a result of a request from Texas Gov. Rick Perry

In Perry’s letter of April 25 to the EPA, a request was made to reduce the RFS standard, citing harm to cattle feeders. The RFS mandated the equivalent of 9 billion gallons for 2008.

In his letter, Perry says a “one cent change per bushel price of corn will negatively hurts the Texas livestock by $6.04 million.”

He says in 2004, corn prices were $2.06 per bushel and in 2007, the price would likely be $4/bu. This change in corn price results in a negative effect of $1.17 billion, he says. If corn hits $8/bu. in 2008, the overall effect could be $3.59 billion, Perry writes.

In his letter, Perry cites an economic study, “The Effects of Ethanol on Texas Food and Feed” by the Agricultural and Food Policy Center at Texas A&M University. The study says market forces alone will result in ethanol production of more than 1 billion gal. more than the federal requirement in 2008.

However, in the study’s executive summary, the authors write: “Relaxing the RFS does not result in significantly lower corn prices. This is due to the ethanol infrastructure already in place and the generally positive economics for the industry. The ethanol industry has grown in excess of the RFS, indicating that relaxing the standard would not cause a contraction in the industry.”