Recent Report Shows RFS Does not Increase Food Prices

A recent study released by ABF Economics found no direct correlation between federal biofuels mandates and increasing food prices. National Farmers Union President Roger Johnson says the report is an example of yet another study that confirms biofuels are not the main driver of food prices. Instead - expanding global demand, speculation in commodity markets and particularly high oil prices are the primary drivers of increased food costs. According to the study - food price inflation has increased at a slower rate since 2007 - the year the Renewable Fuel Standard was last revised. The study also notes that raw commodities represent a small percentage of the final price of food - with energy, food processing and other outside costs steering food price increases.

Johnson notes that according to USDA's Economic Research Service - farmers and ranchers receive just 15.8-cents of every food dollar spent by consumers outside the home in the U.S. More than 80-cents of every food dollar is spent on marketing, processing, wholesaling, distribution and retailing. Johnson says food manufacturers who have long derided the value of renewable fuels should take heed of these findings and seriously reconsider their stance on the RFS.

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