Bioethanol Rules to 'Raise Prices on the Plate'

20 May 2016, at 12:00am

US - New requirements for the amount of bioethanol to be included in transport fuels have been criticised by the National Chicken Council, which says it will raise food prices.

The Environmental Protection Agency's (EPA) proposals include a 2017 required volume obligation for biofuels under the renewable fuel standard (RFS) that will require refiners to blend up to 18.8 billion gallons of biofuels into the US fuel supply next year.

The mandate for conventional corn-based ethanol was proposed to be 14.8 billion gallons, up from 14.5 billion gallons for 2016.

“EPA is proposing to guarantee a record domestic volume to ethanol producers for the fifth year in a row,” said Mike Brown, President of the National Chicken Council. Mr Brown noted that the proposed volume equates to nearly 10.4 per cent of projected total fuel use in 2017 according to the Energy Information Administration’s projections.

“In creating an artificial demand for corn based ethanol beyond what the fuel market can bear, the EPA’s proposal will certainly have unintended consequences for other corn users who are not guaranteed market growth for their products,” continued Mr Brown.

“If the EPA proposal stays put, consumers will see higher prices at the pump and on the plate,” according to Mr Brown.

Up to 70 per cent of the cost of feed for the broiler industry is the cost of corn. Since the RFS was implemented, the broiler industry has faced $53 billion in higher actual feed costs.

“The unrealistic volume for ethanol proposed today by the EPA ensures that the chicken industry, as well as all of animal agriculture, remains only one flood, freeze, or drought away from another crisis,” concluded Mr Brown.