NCC Says Economic Data Backs Full Waiver of RFS
The comment period on the request to waive the Renewable Fuel Standard is now closed. Groups on both sides of the issue submitted comments Thursday - the final day of the comment period. Citing economic data suggesting a full waiver would reduce the price of corn by more than two-dollars per bushel - the National Chicken Council submitted comments in support of a full, one-year waiver of the RFS. In addition - NCC hand delivered almost 10-thousand individual comments - almost three-quarters of which came from chicken farmers. According to NCC President Mike Brown - the comments submitted prove in detail that the RFS is causing severe economic harm to the U.S. economy and that the 2013 requirement must be waived in full. The National Pork Producers Council submitted similar comments - stating that the waiver should be granted because the federal requirement for the production of corn ethanol - coupled with a summer drought that has reduced yields and pushed up prices of feed grains - is causing severe economic harm to pork producers. According to NPPC's comments - with the RFS - a weather-driven supply shock no longer simply results in higher prices for feed grains - but causes explosively higher prices, crippling credit and liquidity shortfalls and the frightening prospect that some producers can't assure stable access to corn to feed their animals.
The data cited by NCC comes from an August 2012 report prepared for the Farm Foundation by three Purdue University economists. They found reducing the amount of ethanol blended into gasoline in 2013 would reduce corn prices by nearly 25-percent - or two-dollars a bushel. NCC says the decrease in corn production would result in a decrease of approximately 2.4-percent in retail food prices. They further state that the lower price of corn would result in feed costs that are $32.14 to $47.86 lower per ton. NCC says the chicken industry has had to endure more than 30-billion dollars collectively in increased input costs since the RFS went into effect in October of 2006. Further - NCC states that a historically resilient industry has seen the greatest decrease in growth in more than 40 years during the implementation of the RFS. The group said that 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.
NPPC pointed to three analyses on the effects of the RFS - from the Food and Agricultural Policy Research Institute at the University of Missouri, Iowa State University and Purdue University - that concluded a waiver of the federal mandate would have a marginal effect on ethanol production but alleviate the severe economic harm being experienced in various states and regions by pork, poultry and livestock producers.
The EPA is expected to make a decision on the waiver request by November 11th.
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