The People of America's Oil and Natural Gas Indusry

RFS = Rising Costs for Bakers

Mark Green

Mark Green
Posted October 25, 2013

For the American Bakers Association (ABA), the Renewable Fuel Standard is a market distorter, affecting acreage that’s devoted to growing wheat for food and impacting prices. Like the National Chicken Council, the National Marine Manufacturers Association and other groups, America’s bakers want relief from the detached-from-reality RFS. ABA:

corn_funnel“The corn-based ethanol mandate impacts the baking industry twofold:  First, the government mandate to grow corn for fuel instead of food drives farmers to move away from planting wheat; second, the wheat market typically follows the much larger corn market, and when corn prices rise due to government created demand for ethanol, wheat prices rise as well. With an estimated 40 percent of the corn crop needed to satiate demand for the corn-based ethanol mandate, there is little doubt that the mandate impacts corn prices and supplies, which will also impact the wheat market. ABA once again calls on Congress to stand with consumers and repeal the corn-based ethanol mandate.” - ABA President & CEO Robb MacKie

“Restoring the balance between food and fuel crops is long overdue.” - ABA President & CEO Robb MacKie

Due to the 2005 and 2007 corn-based ethanol mandates, wheat could not (and cannot) compete for finite acreage against other biofuel crops. With the addition of E15, estimates show that corn acreage may need to increase to as much as 110 million acres in order to meet demand. With increasing ethanol mandates due to the RFS2, and with the inability of second generation biofuels to come online quickly to relieve pressure on the demand for corn-based ethanol, corn will continue to win the battle over finite farmland in the and drive food prices both domestically and internationally – Comments to the House Energy and Commerce Committee

“The corn-based ethanol program and the Renewable Fuel Standard (RFS) continue taking their toll on the baking industry and consumers. Corn-based ethanol has accelerated the decrease of wheat acreage in the U.S. over the past 30 years and tightened food supplies around the world.” - ABA President & CEO Robb MacKie

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.