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Poultry Industry Fears RFS Increase Will Alter Grain Prices

Dan Grain, Industry News Release

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The U.S. poultry industry is concerned the Renewable Fuel Standard targets for 2017 and 2018 will increase feed prices for poultry farmers. Set by the Environmental Protection Agency, the RFS target for ethanol for 2017 was placed at the statute level of 15 billion gallons. The agency set total biofuel levels – including corn-generated ethanol and biodiesel – at 19.28 billion gallons, up six percent from 2016. The poultry industry fears the increase will change the amount of corn set aside for ethanol production upward and send corn prices higher. That’s welcome news for corn farmers, but National Chicken Council President Mike Brown said it puts U.S. chicken producers “one drought, flood or freeze away from another crisis.” He told meat industry publication Meatingplace that the RFS had cost the poultry industry $59 billion since becoming law.

From the National Association of Farm Broadcasting news service.

From: National Chicken Council

The U.S. Environmental Protection Agency (EPA) announced it is mandating 15 billion gallons of ethanol to be added to the domestic fuel supply in 2017, which is 200 million gallons more than the agency’s proposed volume put forth in May. (NCC’s comments from July on the proposed volumes can be found here.) Over the last four years, EPA has raised the final volume above the initial proposed volumes by a cumulative 1.53 billion gallons.

Moreover, in setting the 2017 volume at 15 billion gallons, EPA has breached the 10 percent blend wall and effectively surpassed the statutory cap on ethanol set in the 2007 Energy Independence and Security Act.

Indeed, Congress in the statute set a cap on conventional ethanol at 15 billion gallons to prevent ethanol production from artificially diverting too great a volume of corn from feed, food and seed use to energy. At the time Congress set this cap, ethanol exports were not envisioned. However, according to the Energy Information Administration, U.S. exports have averaged nearly 840 million gallons in the past two years and are trending even higher for the first three quarters of 2016.

“Ethanol exports add nothing to U.S. energy security and the RFS is not being administered in keeping with Congressional intent,” said National Chicken Council President Mike Brown. “The RFS bureaucracy has taken on a life of its own and it is time for Congress to stop this runaway train. American chicken producers are only one drought, flood or freeze away from another crisis. The RFS has cost our industry $59 billion more in feed costs since it was implemented.”