What is in this article?:
- RFS waiver proposal creates divisions
- Contrary to free market
- FAPRI report is either further vindication of the RFS or another attempt to justify it.
- Corn producers and ethanol manufacturers like it, the livestock industry, not so much.
- Both the TSCRA and the RFA agree that developing a reliable biofuels industry should be a part of an overall national energy policy.
A recent report by the Food and Agriculture Policy Research Institute (FAPRI) concludes that a full waiver of the Renewable Fuel Standard (RFS) would result in an insignificant decrease in corn prices — only about 4 cents per bushel.
The study also found that the waiver “might” cause corn ethanol production to slip by just 1.3 percent, while corn available for livestock “might” increase 0.6 percent.
The report indicated that a waiver for 2012/13 would have “no effect on retail beef prices in 2013, and might shave 1 cent per pound off retail pork prices.”
Depending on which side of the corn market one resides — buyer or seller — the report is either further vindication of the RFS or another attempt to justify it. Corn producers and ethanol manufacturers like it, the livestock industry, not so much.
The Renewable Fuels Association (RFA) said the study “adds to the mounting body of evidence showing that a waiver of the RFS would not meaningfully affect feed prices.”
“The new FAPRI study is just the latest in a series of recent reports that show waiving the RFS would not have the types of impacts claimed by livestock groups and grocery manufacturers,” said RFA President Bob Dineen. “The suggestion that an RFS waiver would significantly bring down feed prices and reduce retail meat prices is absolutely absurd.”
The only real impacts of a waiver, he said, would be to discourage farmers from planting corn and to delay biofuel technology development.
The cattle industry disputes the contention that the RFS has done no harm to the industry’s bottom line. Joe Parker Jr., rancher and president of the Texas Southwestern Cattle Raisers Association (TSCRA), says the RFS disrupts free market economics.
“Basic economics tells you that the greater demand, the higher the price,” he says. “Common sense tells you it’s probably not wise for the government to artificially inflate the demand for corn-based ethanol when there’s just not much corn to go around in the first place. What the government should do is waive the RFS standard and put corn back on the same free-market playing field as the cattle industry.”