Fueling A Farm Crisis

Thirty billion dollars. That’s what a study issued late October says the Renewable Fuel Standard is likely to cost the meat and poultry industry next year.

Produced by FarmEcon LLC in Indianapolis, the study found that, if the RFS is not revamped, the loss in meat and poultry production next year “will balloon to about $30.6 billion,” while both ethanol production and corn exports will decline because of short corn supplies. Consumers, the study added, will see a 29 percent increase in meat and poultry prices, triggering a drop in consumption of 11 percent.

“It is time to step back and take a hard look at the realty of the 2007 RFS schedule versus corn production capacity and the welfare of the country,” the study concluded. “By diverting increasingly limited corn production into low value-added ethanol production and exports, we have dramatically reduced the actual and potential volume of high value-added, job producing food production.”

The RFS requires a set amount of corn-based ethanol to be blended into gasoline each year. The Environmental Protection Agency recently refused to grant requests from NPPC and many others to waive all or part of the RFS to ease pressure on soaring feed prices.