In response to a new economic study on the impact of corn ethanol production on food prices and commodity price volatility, a coalition of livestock and poultry groups is urging Congress to reform the federal Renewable Fuels Standard (RFS), which mandates the amount of ethanol that must be produced annually.
Conducted by Thomas Elam, president of FarmEcon LLC, an Indiana agricultural and food industry consulting firm, the study found that federal ethanol policy has increased and destabilized corn, soybean and wheat prices to the detriment of food and fuel producers and consumers.
The RFS, first imposed in 2005 and revised in 2007, this year requires 15.2 billion gallons of ethanol to be produced.
“The increases we’ve seen in commodity prices are strongly associated with the RFS mandate,” said Elam. “At the same time, we haven’t seen the promised benefits on oil imports or gasoline prices. This means that while Americans are forced to pay more for food, they’re also not seeing lower prices at the pump.
“It’s a lose-lose situation.”
Brownfield discussed that study and the request for RFS reform with Michael Formica, chief environmental counsel for the National Pork Producers Council, which is one of the members of the coalition.