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Dierschke regarding Governor Perry’s request on Renewable Fuels Standards

“A request by Governor Rick Perry to the Environmental Protection Agency to waive a portion of the Renewable Fuels Standard is misguided, would do little to lower food costs and would ultimately cause consumers to pay more at the gas pump.

“Gov. Perry’s claim that ethanol is the reason for rising food prices is misleading at best. A recent study by the Texas Agri-Life Extension Service indicates a total waiver of the RFS would reduce corn prices by only 30 cents per bushel—a 5 to 8 percent decrease based on current prices. Other factors, including the declining value of the dollar and smaller world grain stocks, have far more impact on the price of corn.

“Gov. Perry needs to look no further than the skyrocketing energy costs to find where the true increases in food prices begin. Consumers are hit with a double whammy. Oil at more than $115 per barrel not only drives up fuel prices but prices at the grocery store. Distribution, manufacturing and packaging costs—escalated by the price of oil—play a much bigger role in rising food costs than the price of corn.

“Texas Farm Bureau policy supports renewable fuels. We believe the Renewable Fuel Standard is one step toward greater energy independence in the U.S. Some analysts predict oil and gas prices would be 15 percent higher if biofuel use was not increasing.

“Texans can’t stand another 50-cent per gallon jump in gas prices. That is about the amount economists estimate as the positive impact that ethanol has on gasoline prices. We need policy that lowers—not adds to—the price of energy. The Renewable Fuel Standard addresses America’s growing energy needs.

“As a general farm organization, we represent livestock as well as crop interests in Texas. We appreciate the recent stress of the marketplace on livestock feeding operations while remaining mindful of decades of relatively low grain and commodity prices. Our organization respects the marketplace and is confident the market will find a balance between feed use and fuel use of grain.”

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