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RFA: House ignores facts about ethanol industry

America’s ethanol producers are on pace to produce nearly 40 million metric tons of livestock feed in 2011 - a volume greater than all the corn used on cattle feedlots all across the country.

America’s ethanol producers are on pace to produce nearly 40 million metric tons of livestock feed in 2011 – a volume greater than all the corn used on cattle feedlots all across the country.  Additionally, ethanol producers are poised to export nearly 25 percent of that volume to meet growing feed demands around the globe.

Unfortunately, these facts and other benefits of a robust domestic ethanol industry will likely be overlooked or dismissed out of hand at a stacked deck hearing before the House Agriculture Subcommittee on Livestock, Dairy, and Poultry.  Witnesses at the hearing include a wide range of livestock and meat processing interests, but do not include anyone from the nation’s ethanol, corn growing, or feed milling industries. 

“Today’s hearing will do little more than provide a soapbox for those that falsely present domestic ethanol production as creating a choice between food or fuel,” said Renewable Fuels Association President and CEO Bob Dinneen.  “Failing to include any representation from America’s ethanol, corn growing, or feed producing industries demonstrates the predetermined outcome of this hearing.  America needs thoughtful energy and agricultural policy that is based on all the available facts, not just those some lawmakers choose to hear.”

Dinneen continued, “If this subcommittee were truly interested in finding out the facts, they would be interested to know that ethanol producers will provide nearly 40 million metric tons of livestock feed this year.  They would also be interested to note that at today’s corn prices, a pound of pork chops retailing for $3.51 per pound contains just $0.30 cents of corn – less than eight percent of the total cost.  Similarly, the farm share of each retail food dollar is less than 16 cents.  Additionally, members of the committee may also be interested to know that many of the nation’s largest integrated livestock and meat manufacturers are enjoying strong quarterly profits despite the abnormally high price of corn.  Facts matter and we hope that the members of the committee will take a comprehensive look at the issue rather than taking the word of industries seeking to return to days of subsidized corn production.”

Despite the anticipated focus on ethanol at today’s hearing, a July 2011 report from Informa Economics found that ethanol is just one factor in rising corn prices and that other factors such as speculation, monetary policy, and global demand all play influential roles.  Taking it one step further, the report also concluded that “Statistical evidence does not support a conclusion that the growth in the ethanol industry is the driving force behind higher consumer food prices.”

The report also concludes, “While an increase in corn prices will affect certain industries – for example, causing livestock and poultry feeding margins to be lower than they otherwise would have been – the statistical evidence does not support a conclusion that there is a strict ―food-versus-fuel‖ tradeoff that is automatically driving consumer food prices higher.”

The full report can be read here.

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