Poultry, Meat Trade Groups Criticize Renewable Fuel Standard

WASHINGTONComments submitted Sept. 25 to the Environmental Protection Agency (EPA) by the American Meat Institute, National Turkey Federation, National Chicken Council and FarmEcon LLC sharply criticized EPA's proposed changes to the Renewable Fuel Standard, citing inadequate analysis of the proposed rule's impact on agricultural commodity prices.

The trade groups said EPAs proposed regulations have not considered the risks associated with variability of grain crop or other biomass production, which would have serious consequences on food and fuel production costs in years of reduced crop production. Increased reliance on biofuels likely would increase the instability of U.S. fuel supplies even if the reliance on imported oil is decreased.

Increasing the level of biofuel production in the current RFS has already resulted in a strong link between energy prices and agriculture prices, the comments noted. Energy prices are highly volatile, and the link between that volatility and increased volatility of agriculture commodity prices has become a major issue facing commodity producers and users.

The comments note that volatility has very real consequences for food producers that go beyond the increased cost levels already seen. They also explain that until EPA performs a risk assessment that takes into account not only average prices, but also variations around average prices, the real costs of the RFS are unknown.

The comments also recommended that EPA and USDA adopt a policy that outlines a set of rules for adjusting the RFS downward in the event of a crop shortfall.  he set of transparent rules would serve as a safety net and would offer all concerned parties a degree of certainty for planning production adjustments in time of lower crop supplies.