The People of America's Oil and Natural Gas Indusry

RFS Makes Chicken Feed Not Chicken Feed

Mark Green

Mark Green
Posted October 23, 2013

We have written a lot on the Renewable Fuel Standard (RFS), its problems with reality and its problems for consumers, but the impacts of the RFS go far beyond the oil industry, all the way down to your dinner plate as the National Chicken Council (NCC) explains:

A major component of the current decline in food affordability is, like the 1970s, booming grain and soybean prices. Unlike the 1970s, it is not exports this time around; grain and soybean exports are actually declining. Rather, the primary cause is booming use of corn in fuel ethanol production in the face of declining corn production. The RFS requires 13.8 billion gallons of corn-based ethanol to be blended  into gasoline in 2013, an amount that will use more than 40 percent of the nation’s corn crop, according to the U.S. Department of Agriculture. - Increased Food Costs Due to US Ethanol Policy are Eating American Family Budgets

“USDA’s average wholesale broiler meat prices leapt from 68 cents in 2005 to a record high 91 cents in December, 2012 – a 35 percent increase. Turkey meat soared from 79 cents in 2005 to a record high of 120 cents a few months ago. And it’s not just poultry that costs more. A variety of food products that depend heavily on corn feed are also more expensive. It’s safe to say RFS is hitting consumers, poultry producers, and farmers squarely in the pocketbook. … RFS is a man-made crisis. … As a witness to the devastating impact of RFS on the good people who work so hard to feed our country, I say, allow them to compete on a level playing field with fuel ethanol producers who have an unfair advantage thanks to the 2007 RFS rule changes.” - Dr. Thomas Elam, president of FarmEcon, LLC

… since the RFS was enacted, chicken producers alone have incurred $35 billion in cumulative additional feed costs. “We have witnessed a dozen poultry companies file for bankruptcy, be sold or simply close their doors, due in large part to the extreme volatility and record high cost of corn associated with ethanol’s insatiable demand. … Chicken producers are certainly not anti-corn; and we’re not even anti-ethanol. What we are against is a government mandate that artificially inflates the price of corn, picks winners and punishes losers among those who depend on it.” - NCC President Mike Brown

… Not only has the mandate caused corn prices to increase to record levels, the volatility of corn prices has been unprecedented. No other government program has resulted in such a costly burden to producing chicken nor has any other federal policy caused as many chicken companies to cease operations, file for bankruptcy, or be acquired by another company in such a short span of years, the comments added. … The fuel market has shown it does not want nor need ethanol above the 10 percent blend rate. For EPA to find a way to force blending rates above 10 percent would be making a very costly situation for U.S. animal agriculture an even heavier burden to bear … - RFS Mandate for Corn-Based Ethanol ‘Single, Most Important, Major Driver’ Impacting Corn Market

“Lawmakers are now hearing from motorcyclists, poultry, livestock and dairy producers, food manufacturers, restaurants, environmentalists, anti-hunger groups, free marketers, boaters, specialty and small engine manufacturers, taxpayer groups and consumers, who are all demanding change to the current U.S. biofuels policy.” - NCC President Mike Brown

“The National Chicken Council appreciates that EPA has finally recognized the reality of the situation and is willing to consider adjustments to the 2014 volume requirements of the RFS to address the fact that we simply cannot blend more and more ethanol into less and less gasoline. This is a Band-Aid approach, however, to a problem that needs a long-term, sustainable solution. Chicken producers, and all end users of corn, can’t rely upon the administration to make these adjustments on an annual basis. We need certainty in the market that only Congress can provide by repealing the conventional requirements of the RFS.” - NCC President Mike Brown

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.