A full waiver of the 2013 Renewable Fuels Standard requirement would reduce the price of corn by more than $2 per bushel, according to economic data cited in comments submitted Thursday by the National Chicken Council to the Environmental Protection Agency in support of a one-year waiver of the RFS.
NCC also delivered nearly 10,000 individual comments from other industry members, almost three quarters of which came from chicken farmers.
"Our comments prove in detail that the RFS is causing severe economic harm to the U.S. economy, and the 2013 requirement must be waived in full," said NCC President Mike Brown.
"Today's corn crop report released by USDA verifies that this harvest will mark the lowest production since 2006. Despite 13% less corn than last year to go around, it is irresponsible to divert more than 40% of it to use as a second-rate motor fuel."
The comments cite an August 2012 Purdue report that evaluated how an EPA waiver of the ethanol mandate would affect the corn and ethanol markets. Calculations from their model, NCC says, found that reducing the amount of ethanol blended into gasoline in 2013 would reduce corn prices by $2 per bushel.
NCC comments say such a significant reduction could affect consumers, livestock producers and the feed industry, and lead to an approximate decrease of 2.4% in retail food prices.
The $2 decrease is equivalent to a decrease of $71.43 per ton of corn, which results in feed costs that are $32.14 to 47.86 lower per ton, NCC calculates. The broiler industry uses 1.25 billion bushels of corn each year. Savings of $2 per bushel of corn would amount to $2.5 billion in annual savings to the chicken industry.
Since the RFS went into effect in October of 2006, NCC says the chicken industry has spent $30 billion collectively in increased input costs.
"As processing plants find themselves unable to keep pace with the increasing costs of grain, the growers and farmers who produce poultry and livestock suffer. And when poultry processing plants shutter, the economic effects ripple through the entire local community," NCC comments say. "The direct effect of the increased price of corn is to put local farmers and workers employed by the chicken industry out of business."
NCC comments add that the industry has experienced decreased broiler production since the implementation of the RFS.
"In 2009, U.S. broiler production decreased by 3.8%, the largest decrease since 1970. The years 2011 and 2012 each saw a 1% decrease in production, representing the first time in this period that the broiler industry has seen two consecutive years of negative growth," the comments say.
"Because of the importance of corn in so many aspects of food production, the entire food industry—and ultimately, the consumer—are suffering because of the RFS. Viewed together, these factors demonstrate the RFS must be waived to relieve the severe economic harm the RFS is causing," NCC comments concluded.