Since RFS’ inception, corn demand has continued to increase as fuel producers are forced to adhere to the policy. And as fuel and food producers vie for corn supply—even amid drought conditions—grain costs have risen an astronomical 275 percent since the policy was implemented. The reality is that feedstock is the single largest cost in raising chickens, turkeys, beef and other livestock, and as a result of the RFS, poultry producers have been forced to spend an additional $1.9 million per day on corn for feed.
Just days ago, the Environmental Protection Agency (EPA) signaled that it is considering reductions to the ethanol mandates through the Renewable Fuel Standard (RFS) next year. While this potentially marks a step in the right direction, it fails to provide poultry producers and consumers with certainty and the sustainable relief they need from the increased costs imposed by our nation's biofuel mandate. In the interim, the RFS remains a broken policy that—despite recent claims from corn farmers—is in urgent need of reform.
But at what cost? A serious one, in fact, for the thousands of poultry producers, like us, across the country who rely on a stable supply of corn as a part of their feedstock.
While the ethanol industry has been expanding due to federal government assistance, and corn farmers were reaping record crop and land prices, our friends at Zacky Farms (Calif.), Cagle’s (Ga.), Park Farms (Ohio), Allen Family Foods (Del.), Townsends (Del.), Lady Forest (Miss.), Midwest in Gibbon (Neb.), Central Coast Fryar Farm (Calif.) and House of Raeford (N.C.) were filing bankruptcies, closing plants and laying off thousands of workers.
Beyond the detrimental effects on local farmers and poultry producers, the ethanol mandates burden everyday American consumers. In 2012, the average family of four saw an increase of approximately $2,000 in yearly food costs, largely a result of the RFS. This fluctuation in food affordability cannot be solely attributed to exports, as argued by corn farmers, because grain and soybean exports are actually declining. Rather, increasing ethanol demand has forced corn prices to surge, which has, in turn, impacted the price of other crops forced to compete with corn for land. In addition to pushing up the cost of food and driving food producers out of business, the ethanol mandate is destroying jobs, costing taxpayers billions of dollars and doing little or nothing to reduce our reliance on petroleum products.
Our corn supply is already at the whim of unpredictable weather and drought, which can alone distort the market. We know all too well from last year that corn crop projections and inventories can be erased from Mother Nature’s wrath. But let’s control what we can by working to ensure that this vital resource is appropriately allocated. It’s essential that leaders in Washington come to the realization that the supplies for our food and fuel must not be pitted against each other—and Congress reforming the woefully flawed RFS is an essential first step.
Burkel is a Minnesota turkey grower and on the board of directors for Northern Pride Inc. Helgeson is CEO of GNP Company in St. Cloud, Minnesota.