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.
Chicken industry hit hard
More dramatically, a decrease of $2.00 in the price of corn per bushel is equivalent to a decrease of $71.43 per ton of corn, which results in feed costs that are $32.14 to 47.86 lower per ton. The broiler industry uses 1.25 billion bushels of corn each year. Savings of $2 per bushel of corn would amount to $2.5 billion in annual savings to the chicken industry.
Since the RFS went into effect in October of 2006, the chicken industry has had to endure more than $30 billion collectively in increased input costs.
As processing plants find themselves unable to keep pace with the increasing costs of grain, the growers and farmers who produce poultry and livestock suffer. And when poultry processing plants shutter, the economic effects ripple through the entire local community, reaching those employed both directly and indirectly by the plant. The total direct and indirect employment by the U.S. chicken industry in 2011 was about 1,010,250 workers, producing wages of $47.3 billion and generating $197.6 billion in economic activity. At the local level, a single processing plant is supported by about 300 farm families. The direct effect of the increased price of corn is to put local farmers and workers employed by the chicken industry out of business.
The U.S. chicken industry has suffered in the years since the implementation of the RFS, in contrast to the industry's average annual growth rate of 4.0 percent and historical resiliency even during difficult economic times. In 2009, U.S. broiler production decreased by 3.8 percent, the largest decrease since 1970. The years 2011 and 2012 each saw a 1 percent decrease in production, representing the first time in this period that the broiler industry has seen two consecutive years of negative growth. These recent trends demonstrate that a historically resilient industry has seen the greatest decrease in growth (indeed, it has shrunk) in more than forty years during the implementation of the RFS, when it has seen demand for one of its primary inputs drastically and artificially increased. Because of the importance of corn in so many aspects of food production, the entire food industry—and ultimately, the consumer—are suffering because of the RFS.
"Viewed together, these factors demonstrate the RFS must be waived to relieve the severe economic harm the RFS is causing," NCC's comments concluded.