This transcript is automatically generated
Follow up on just report.
Farmers are crying foul that are now petitioning the government to waive the ethanol mandate -- ethanol producers say he weren't the problem we have both sides to weigh on.
On -- I'm joined by bill day.
Executive director of communications at Valero energy and JD Alexander a Nebraska cattlemen and president of the National Cattlemen's Beef Association.
Thanks to both of you for being here and -- let me start with you.
What do you hope to achieve with the waiver with the petition.
I think the first thing to remember is that the B producers were not opposed to the ethanol industry.
All were looking for is a fair market place to purchase our corn.
It's -- fact we actually feed about 50% of our byproduct is an ethanol based product and our final ration.
The thing where are -- to -- a mandate that says they have to produce so much so we're looking for is just an even playing fields we can purchase -- in an open market.
Place GD it strikes me at a time when we're having a drought in this year you know with the cropping so much smaller four out of every ten bushels.
Is gonna have to go to the ethanol industry.
It seems to me that everybody would get behind a -- at this point in time how do you feel about it.
If it was temporary in the short term.
Well I think you're right we really would like he's sorry I wrote that was supposed to go to -- might I -- I apologize I was for bail.
Okay Melissa I heard the question whether we would support a waiver -- not.
As ethanol producer Valero is sort of neutral in this issue we haven't taken a position on it.
And in fact while 40% of the bushels of corn go to ethanol production.
Feed stock for livestock feeders get some of that back in the distillers grains as you mentioned in your last segment.
So we see some of this -- going to ethanol production but we're also producing feed for livestock producers and a lot of the ethanol -- getting blended right now.
Is not coming from corn that's being bought in the current market a lot of ethanol producers like Valero have slowed down their corn purchases that so expensive.
And are blending out of inventory.
Bill in us let's say that you're double dipping because you by the -- make ethanol -- -- able to sell about five product that we saw Jeff had back to the farmers.
-- ask you very basic question.
Which -- in the ethanol business as Valero Energy if that wasn't for the EPA and the government may mandate would you do this.
Blair has been very clear that we got into the ethanol business because we were required.
That's a petroleum refiner.
To blend ethanol into our gasoline that's a government mandate and as a fuels manufacturer we figured if we're gonna be required to -- -- into our gasoline.
We might as well be the ones making it.
That like -- -- what -- that this isn't it good business and less the government and they're forcing you to do this you wouldn't be making that you wouldn't have demand for an out -- the government's the one imposing the demand nobody else wants it.
It would be very difficult for the ethanol business to thrive without the renewable fuel standard JD how.
You feel about that knowing that the government is creating this artificial force out there in the market that's forcing this ethanol to be made.
When you actually need the corn for your hurt.
Or very we're very opposed to that what it essentially is doing is a government is picking winners and losers.
You know we think that you should not pick one commodity to better that of a different one.
You know our price of choruses.
-- all time high.
We're actually finding it difficult to buy -- -- corn to feed the cattle that were feeding today.
Were down about about 60% of our herd is -- in to what we can do for the future.
The other -- we want to do is just operated on a level playing field where we have every bit about two to by the corn -- an equal price that are competitors would.
Yeah and built what I I I I'm waiting for one more minute your exact -- you one more question.
You're making a lot of money in this environment even though we're looking at the price of ethanol going up but you sort of get -- along the way right.
Because you have to -- the corn to go in and an if you don't get pinched.
You're just passing it onto the consumer right.
Blair and other ethanol producers are very definitely getting pinched Valero actually has two plants shut down now because there were losing money making ethanol.
We've seen the price of corn -- -- very rapidly.
The price of ethanol has gone up a little bit but not nearly as rapidly and so ethanol producers get squeezed if you're raw material costs more than year end product.
You're going to be losing money and you're gonna have plants shutdown.
Yeah -- either that or you pass -- on your consumers that's means that you -- you're paying.
Or I'm paying but no matter what this is not working out for anybody thanks to both of you for joining us some interesting -- some points of -- -- and heard before we appreciate your time.