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The nation's food-to-fuel mandate is causing severe harm to poultry and meat producers in the United States, and will likely inflict even worse pain in the near future unless the mandate is waived, said trade representatives for both protein-producing industries to the Environmental Protection Agency.
The mandate for 9 billion gallons of corn-based ethanol in 2008 is driving up the cost of corn even while prospects for this year's harvest continue to dim because of flooding in the Midwest, said the National Chicken Council in comments supporting the waiver request by Texas Gov. Rick Perry.
Perry's petition seeks a 50-percent reduction in the Renewable Fuels Standard, which mandates the amount of corn-based ethanol that must be blended into gasoline. The National Turkey Federation said Perry's plan for cutting the RFS in half is critical because the standard is increasing food production costs and consumer prices.
Only 57 percent of the corn crop is considered to be in "good" or "excellent" condition, down from 70 percent at this time last year, and this does not take into account the recent flood damage in the Midwest, according to NCC. The chicken trade group added that the U.S. Department of Agriculture will not publish a full assessment of flood damage until August.
For its part, NTF called on the EPA to consider taking stronger action than that requested by Perry. "For an industry that operates on extremely tight margins and production costs so closely related to feed costs, even the slightest increase in feed cost can have a huge impact," NTF's president Joel Brandenberger wrote in comments submitted to EPA of the Texas petition.
The industry groups emphasized in their comments that damages are not limited to their member companies, but will instead be spread across the entire industry. They cited a study by economist Bill Lapp estimating that food prices will further rise in reaction to higher input costs. Lapp estimated that milk would rise 81 percent, eggs 84 percent, pork 86 percent, chicken 80 percent, and beef 79 percent, based on expected food prices in the period 2008-12 to actual prices in the period 2002-2006.
"It is almost inconceivable to us that the United States government would want to be associated with 80 percent increases in the price of common food items over that period of time, but this is the direction in which the ethanol mandate is leading the country," NCC president George Watts said in a letter to the EPA.
The American Meat Institute also submitted comments supporting the petition for a waiver of a portion of the Renewable Fuels Standard, which the State of Texas filed with the U.S. Environment Protection Agency (EPA) on April 25, 2008.
"The new, elevated ethanol mandates, enacted by Congress in December 2007, are and will continue to severely harm the economy of Texas, our members, and the United States of America, if the EPA does not grant this waiver," wrote J. Patrick Boyle, AMI's president/c.e.o.