Suspending biofuel standard might increase livestock feed prices, report claims
The RFS calls for 13.2 billion gallons of corn-based ethanol to be used for gasoline production in 2012 and 13.9 billion gallons in 2013, but following one of the worst droughts experienced in the US in more than 60 years, a coalition of American pork, beef, poultry and other concerned livestock producers have urged the EPA to waive the standard to prevent inflated prices for corn-based feed.
However, a report from US-based environmental and natural resource management consultancy Cardno ENTRIX, suggests a waiver of the RFS might ultimately increase costs for other ingredients used in livestock feed, such as soybean meal, dried distillers grains with solubles (DDGS), corn gluten feed and corn gluten meal, which are co-products of ethanol production.
“[If] a waiver reduced biofuel output, it would also reduce the available supply of DDGS and soybean meal, which would naturally lead to higher prices for those key feed ingredients,” the study stated.
“When viewed in the context of total feeding costs, these price increases for DDGS and soybean meal largely offset lower corn and soybean prices.”
However, US livestock producers are still calling for the EPA to reform the RFS since 70-75% of the country’s corn crop production has been affected by the drought, according to the US Department of Agriculture.
J Patrick Boyle, president and CEO of the American Meat Institute (AMI), said: “This year’s unprecedented drought and high corn prices combined with the RFS mandate have inflicted, and will continue to inflict, severe economic harm throughout the supply chain from producers to consumers.”
