Noting the severe drought and its disastrous impact on this year's corn production, IDFA and 16 other food industry trade organizations last week submitted joint comments to the Environmental Protection Agency, urging the agency to waive the amount of corn ethanol that must be produced under the nation's Renewable Fuels Standard (RFS).
"Corn is a key component in so many food products that its availability and affordability as a food ingredient is crucial in U.S. food production," the organizations said. "Virtually the entire food chain, from farm to table, is adversely affected by the reduced availability and increased cost of corn caused in large part by the drought, but certainly exacerbated by the RFS."
EPA is authorized under the Clean Air Act to issue a waiver of the RFS if the administrator determines that implementing the requirement "would severely harm the economy" or that "an inadequate domestic supply" exists. Approximately 40 percent of all U.S. corn is currently dedicated to ethanol production.
Impact on Dairy
Livestock farmers who rely on corn to feed their animals are struggling to find sufficient corn feedstock, and some dairy farmers are looking to reduce their herd size, which would limit the available supply of farm milk.
The comments highlighted the impact on America's dairy companies, stating that higher feed costs have helped to drive the retail price of milk higher and make dairy products less competitive in the market. They also note that these higher costs are cited by the Congressional Research Service as "a major reason behind a proposed revision of government dairy policy that is designed to periodically increase dairy product prices even further by enforcing limits on the amount of milk that each dairy farm can sell, a market intrusive and regulatory burdensome program that will hurt dairy export growth and encourage dairy imports at a cost of thousands of American jobs."
The Renewable Fuel Standard, first adopted as part of the Energy Policy Act of 2005, was expanded in 2007 to require the use of 15 billion gallons of biofuels, such as ethanol, by 2015. An estimated 13.8 billion gallons of domestic corn ethanol will be used by oil refiners to blend with gasoline in 2013. The standard requires the use of 36 billion gallons of biofuel, with 21 billion coming from advanced biofuels, by 2022.
For more information, contact Jerry Slominski, IDFA senior vice president of legislative and economic affairs, at email@example.com.