A renewable fuels law requires that 13.2 billion gallons of ethanol be produced by this year and 15 billion gallons be produced by 2015. That's good for corn farmers, but it's angered poultry, hog and cattle farmers. They say they've seen big jumps in corn-based feed costs as corn is diverted to make ethanol vehicle fuel.
States requesting the waiver say reduced corn production due to this year's drought has made the problem even worse.
Gov. Mike Beebe, D-Ark., said in a letter to the EPA in August that ethanol production was taking a "terrible toll" on animal agriculture in his state and that consumers would pay more as a result.
Governors of North Carolina, New Mexico, Georgia, Texas, Virginia, Maryland, Delaware, Utah, and Wyoming also asked for the waiver, along with members of Congress and a coalition of farm groups and other industries that have opposed increased ethanol production.
The EPA said Friday that the agency has studied the effect of waiving the requirement and officials believe it would have had little impact on corn prices.
"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, assistant administrator of the Office of Air and Radiation. "But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact."
A coalition of livestock, poultry and dairy organizations reacted angrily to the decision.
"We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate," the coalition said in a statement.