Ag Policy Blog

Chain Food Industry Lobbying to Repeal RFS

By Todd Neeley , DTN Staff Reporter

Oil company executives aren't the only industry representatives in Washington this week pushing for a repeal of the Renewable Fuel Standard, as a national group representing chain restaurants spent the day Wednesday meeting with members of Congress.

The Renewable Fuels Association was quick to point out in a news release Wednesday that the lobbying effort is underway although Fuels America released new polling numbers showing a majority of people believe fast food restaurants should support renewable fuels, "and that oil and gasoline are the real factors behind food prices," RFA said in a statement.

Bob Dinneen, president and chief executive officer of the RFA said disconnect between poll numbers and chain restaurant lobbying efforts highlights differences between the views of the chain restaurants and their clientele.

"This is clearly an example of 'drive-thru' politics," Dinneen said in a statement.

"Today's Fuels America poll shows that more than eight out of 10 people believe the truth, that oil prices are driving food prices. The big shots who flew into Washington today want Congress to believe that ethanol and the RFS are driving up the price of corn and food.

"They are quick to blame it all on ethanol, ignoring the impact of high oil prices. But they are here under a false premise because ethanol demand is not driving corn prices higher.

"In fact, corn prices are actually falling in anticipation of record crops and an increase in world production. The real question is when will fast food restaurants reduce their prices to reflect their lower costs?"

Dinneen said chain restaurants should be "most cognizant" about the affect oil prices have on food prices.

"There is a near perfect relationship between the UN Food Price Index and world crude oil prices, magnifying the negative impact of big oil," Dinneen said.

"Additionally, since the RFS was enacted in 2005, oil prices have risen on average 10% a year, while retail food prices have only increased an average of 2.9% a year. The facts are clear, oil prices are the culprit behind rising food prices, not ethanol."

RFA pointed to the following information in its news release:

"-Ethanol is not produced from the sweet corn that humans consume. It is made from field corn, which is used for livestock feed and industrial purposes.

"-One-third of every bushel of grain used in the ethanol process is returned to the market as nutrient-dense livestock and poultry feed.

"-Less than 3% of the global grain supply was used by the U.S. ethanol industry in 2012.

"-34.4 million metric tons of animal feed were produced by ethanol plants in 2012.

"-Seven hamburgers per person worldwide could have been produced from the ethanol industry's 2012 animal feed output. That is 50 billion hamburgers.

"-Only 16 cents of every dollar spent on food is related to agricultural ingredients. The remaining 84 cents goes to energy, packaging, food processing and other costs."


The National Council of Chain Restaurants has an advertisement running in Politico, calling for "Feed Food Fairness: Take RFS off the Menu."

The ad features a variety of food-related statements centered on how the industry believes the RFS is hurting business:

-"These corn tortilla tacos are regrettably expensive," the ad reads. "Thanks to the RFS corn now costs 26% more than it did last year."

-"It's harder to enjoy the chef's secret recipe. You will squeal when you find out that the RFS has caused pork prices to increase 15% since last year."

-"Golden brown but you will frown. The cost of potatoes has gone up 13% in the past year."

-"Thanks to the RFS, this protein favorite costs 7.7% more than it did last year."

-"You will shell out more for this breakfast special made with eggs that are 11.2% more expensive due to the RFS."

-"Don't have a cow, but beef costs have increased 7.5%. Thank you RFS."

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melvin meister 9/19/2013 | 9:41 AM CDT
John ;Please quit wasting our time ; You being a spokeman for the petrol execs.Chris and Todd are trying to be fair in thier reporting .There is enough drivil coming from the Waqsh. think tanks without you pushing it under our nose.Good work Chris and todd.
John Olson 9/19/2013 | 7:36 AM CDT
The more acres that are used to grow corn ethanol the less acres that are available to grow other food crops. Less acres available for food production causes higher food prices.