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ECONOMISTS DOWNPLAY IMPACT OF RFS REDUCTION ON ETHANOL, AGRICULTURE
BrownfieldAgNews reports:

Ethanol and corn groups are warning that the EPA's proposed reduction in the Renewable Fuels Standard's ethanol volume requirements for 2014 could have a major impact on the ag economy.

But two Midwestern economists say that, while it might contribute to a "slowdown" in what's been a booming ag economy, they don't think it will drive it into negative territory.

"Rolling it back to last year's levels, that means that there may be at risk within the Iowa economy-literally-just a few dozen jobs on the production side," says Iowa State University economist David Swenson.

"Now the impacts out into the farm sector, into the grain prices-that's negative-but again the economists at Iowa State are saying, 'Well, it's not as much as people maybe think it's going to be.' Plus, they're anticipating reasonably healthy worldwide demand for exports."

That overseas demand should help prop up corn prices, according to Swenson.

Creighton University economist Ernie Goss agrees that the ethanol industry will "weather" this storm over the reduced RFS.

"There will be some job losses-there's no doubt about that," says Goss, "but I don't think they're going to be as significant as some are saying."

Goss and Swenson made their comments during a weekend appearance on Iowa Public Television's "Iowa Press" program.


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