In part 2 of 3 in our NTF position review, we have summarized their issue paper on the Renewable Fuels Policy and how it affects the poultry industry.
U.S. Renewable Fuels Policy
The turkey industry and other livestock and poultry producers have been negatively impacted by current U.S. biofuels policy. There is an urgent need for reform. While making progress regarding alternative sources of energy is important, it should also be recognized that the poultry industry suffers from giving the mature corn-based ethanol industry a higher priority than other corn dependent industries.
The initial Renewable Fuels Standard (RFS) was included in the 2005 Energy Bill and created a wider demand for corn and a subsequent hike in prices. At that time poultry and livestock accounted for over 6.1 billion bushels of corn consumption, which amounts to approximately 55 percent of the overall crop. During the same period ethanol used 1.6 billion bushes, only 14.4 percent of the overall corn crop. In contrast, ethanol is currently consuming 42.7 percent of all corn produced in the U.S., while livestock and poultry consume around 40 percent of the crop. The price of corn has risen about 200 percent during this span, causing a 23 percent increase in meat and poultry prices sold to consumers and a shrinking of the poultry industry due to bankruptcies and worker downsizing. While the need for alternative energy sources is apparent, the RFS has instigated resource competition between food and fuel industries.
Congress should alter the RFS to reflect the practicalities of a predictably constricted corn supply. The 15 billion gallon mandate for corn-based ethanol should be changed with the understanding that a tight corn supply, paired with this mandate, means creating resource competition between food and energy industries and is harmful to farmers.