The Fallible Pope

By Ron Lamberty | August 06, 2012

Sometimes it’s difficult to decide on a topic for this column.

Other times, a guy like C. Larry Pope comes along, and says something so outrageous, dishonest, and so transparently politically opportunistic, that the column practically writes itself. Pope is CEO of Smithfield Foods, one of the largest processors of hogs in the nation, and he recently wrote a Wall Street Journal editorial, entitled “The Renewable Fuels Standard is Worse than the Drought.”

Now, in fairness, maybe Pope was just angry because his company made only a third of a billion dollars this year, as opposed to the half a billion it made the year before. Maybe he was stressed out trying to figure out how to make the mortgage payments and put food on the table since his annual compensation dropped by seven million dollars this year—to only $13.2 million. Or maybe, since the “RFS is worse that the drought” line was the title of the article, that was a WSJ headline, and it wasn’t an accurate indication of Pope’s actual opinion.

But since he hasn’t made any follow-up statements or clarifications, he must feel the headline accurately reflects his views. Which, I guess, means that if you said, “Hey, Larry, you get to choose what happens in 2013. Drought or RFS?”

Larry would apparently say, “I want a drought!”

Me? I would choose to not have a drought.

In the article, Pope says the RFS “requires that a certain volume of ethanol (15.2 billion gallons in 2012, mainly derived from corn) be blended into gasoline.” Mainly, in this case, means 13.2 billion gallons of corn ethanol. Pope either doesn’t know or doesn’t mention that actual ethanol use this year could be reduced by 3 billion gallons without making a single change to the existing RFS, if refiners apply excess renewable identification numbers (RINs) for gallons purchased last year, or use extra credits they get for buying ethanol that isn’t made with corn (like sugar cane ethanol from Brazil). That 3 billion gallon reduction of the RFS translates to a billion bushels less corn, but still meets the requirements of the RFS.

Pope writes, “Ironically, if the ethanol mandate did not exist, even this year's drought-depleted corn crop would have been more than enough to meet the requirements for livestock feed and food production at decent prices.” While I am not sure how Larry knows how large the crop “would have been,” the actual irony is that the RFS he complains about is the only reason “this year’s drought-depleted corn crop” could be large enough to meet those requirements.

Since the RFS was enacted, the average annual corn crop has grown from about 9.5 billion bushels to more than 12.5 billion bushels a year. That additional corn was grown because new demand created by ethanol has made growing corn profitable for farmers. There is absolutely zero chance farmers would grow as much corn if the RFS didn’t exist. While Pope speaks longingly about the days of $2 corn, he has to know that farmers wouldn’t have planted 96 million acres with a crop that would lose them money, doesn’t he?

There is a reason that Larry Pope has opted to scare Americans into changing the RFS by writing a horror story for the Wall Street Journal rather than going through the process that was designed into the legislation to deal with situations exactly like we see in the United States this year. He and others just like him aren’t interested in facts or truth. They are interested only in cheap corn, and they will say anything, twist any statistic, and take advantage of any circumstance—no matter how dire—to take profitable markets away from corn farmers and improve Big Food’s bottom lines.

Author: Ron Lamberty
Senior Vice President,
American Coalition for Ethanol
(605) 334-3381