What is in this article?:
- RFS might reduce corn $2 per bushel?
- Chicken industry hit hard
- A waiver of the 2013 RFS requirement would reduce the price of corn by more than $2 per bushel, according to economic data cited in comments submitted by the National Chicken Council to the EPA in support of a full, one-year waiver of the RFS.
A full waiver of the 2013 Renewable Fuels Standard requirement would reduce the price of corn by more than $2.00 per bushel, according to economic data cited in comments submitted by the National Chicken Council (NCC) to the Environmental Protection Agency in support of a full, one-year waiver of the RFS.
NCC also hand delivered almost 10,000 individual comments from those whose livelihoods depend on the chicken industry, almost three quarters of which came from chicken farmers.
"Our comments prove in detail that the RFS is causing severe economic harm to the U.S. economy, and the 2013 requirement must be waived in full," said NCC President Mike Brown.
"Today's corn crop report released by USDA verifies that this harvest will mark the lowest production since 2006. Despite 13 percent less corn than last year to go around, it is irresponsible to divert more than 40 percent of it to use as a second-rate motor fuel."
"A California poultry company just this week filed for bankruptcy citing rising feed costs, making it the eighth company in the last two years to file for bankruptcy, be sold or simply close its doors," Brown continued. "How many more jobs and family farms have to be lost before we change this misguided policy and create a level playing field on the free market for the end users of corn?"
NCC's comments are available in their entirety by clicking here. A summary of which is available below:
The comments cite an August 2012 report prepared for the Farm Foundation by three Purdue University economists that evaluated how an EPA waiver of the ethanol mandate would affect the corn and ethanol markets. Calculations from their model found that reducing the amount of ethanol blended into gasoline in 2013 would reduce corn prices by $2.00 per bushel, a nearly 25 percent reduction.
A decrease in the price of corn by $2.00 per bushel would significantly alleviate pressures on both consumers at the grocery store and the food, livestock and feed industries. Given the vital role of corn in U.S. food production, as the price of corn decreases, so do the prices of meat, poultry, dairy products, and the foods that contain corn-based sweeteners, starches, flours, and oils, as well as substitute products such as wheat and soybeans and any foods made using them.
A marginal decrease in corn price of 24 percent, based on a reduction in the price of corn by $2.00 per bushel, would result in a decrease of approximately 2.4 percent in retail food prices. USDA estimates that food prices will increase 3-5 percent next year. In other words, less than half of the price increase caused by the RFS requirement is equivalent to half-to-nearly-all of the projected increase in the price of food.