Ethanol Decision Could Increase Feed Prices for Poultry Producers

US - The US Environmental Protection Agency (EPA) recently announced rules for higher bio-ethanol volumes to be included in fuels, a move that the National Chicken Council (NCC) says will increase feed prices for livestock and poultry producers.
calendar icon 2 December 2015
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The final Renewal Fuel Standard (RFS) required volume obligations for 2014, 2015 and 2016 were set at higher levels than those proposed by the agency in May 2015.

Specifically, the EPA has raised the implied corn mandate over the three years by more than 1.5 billion gallons and has set the 2016 ethanol mandate at a level beyond the 10 per cent blendwall limits.

“EPA’s action will cost consumers at the pump and on the plate by effectively raising fuel and food prices,” said NCC President Mike Brown.

“By increasing the mandated volume of ethanol beyond the blendwall for next year, and retroactively increasing the mandates for 2014 and 2015, more corn from feed and food will be diverted into fuel production, resulting in increased costs for poultry and livestock producers.

"Since the RFS was enacted, chicken producers alone have incurred more than $50 billion in higher actual feed costs due to the ethanol mandates, and the tab keeps getting run up under this broken law.

“It’s ironic that while US ethanol is competitive in the global export market, the ethanol industry continues to rely on expanding the RFS mandates domestically,” Mr Brown continued. “If anything, today’s announcement by EPA should be yet another reminder that the RFS, and its implementation, are broken beyond repair.”

Mr Brown also said that the new rules do not account for the amount of ethanol that is exported and the effect those exports have in diverting additional corn away from the domestic feed and food market.

The NCC said it supports the RFS Reform Act, which would eliminate the corn ethanol mandate and level the playing field between ethanol mills and feed and food users of corn.

“EPA’s latest action should be a reminder that it is high time for Congress to act on this common sense proposal,” concluded Mr Brown.

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