Turkey Industry Experiencing Real Economic Damage from Ethanol Mandate

NTF Supports Texas Governor’s Request to EPA to Reduce Renewable Fuels Standard Mandate

Washington, D.C., June 23, 2008 -

FOR IMMEDIATE RELEASE CONTACT: Sherrie Rosenblatt, National Turkey Federation 202-898-0100 ext. 7227, srosenblatt@turkeyfed.org The National Turkey Federation (NTF) today called on the Environmental Protection Agency (EPA) to grant the Texas Gov. Rick Perry’s petition for a reduction in the federal ethanol mandate and further called on 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 President Joel Brandenberger wrote in comments submitted to EPA in support of the Texas petition, “A sustained increase in these costs ultimately will result in consumers paying even higher prices for all poultry and meat products.” Perry’s petition seeks a 50-percent reduction in the Renewable Fuels Standard (RFS), which mandates the amount of corn-based ethanol that must be blended into gasoline. NTF said cutting the RFS in half is critical because the standard is increasing food production costs and, ultimately, consumer food prices. Feed accounts for nearly 70 percent of the cost of raising live turkeys. The typical turkey ration is a combination of corn and soybean meal. Corn alone accounts for almost 70 percent of the turkey ration. The increase in price for both corn and soybeans has cost the turkey industry almost $1 billion since November 2006. Corn prices have more than doubled since 2006 to a 10-year high of more than $7 per bushel, significantly increasing turkey production costs, NTF stated in the EPA comments. In April 2006, the turkey industry was paying $2.75 per bushel of corn. Within 24 months, the industry was contracting for corn at more than $6 per bushel. Since December 2007, the turkey industry’s monthly costs in feed expenses have increased by more than $40 million. Higher feed and fuel costs are being blamed for poultry plant closures and the reduction in production the comments noted. A decrease in production can lead to companies closing operation, which will leave many small, family farmers unable to raise turkeys, and thereby receiving less income or even stranded without contracts and having no income. Food and feed prices are complex. There are a number of factors that contribute to inflation of feed and food such as weather, energy and government initiatives to mandate between 25 percent and 40 percent of corn to fuel production. Of these factors, NTF’s comments point out that only the policy to redirect massive amounts of corn to the production of fuel is a policy that the administration has the authority to meaningfully impact. “The turkey industry urges EPA to approve the petition by Gov. Perry and waive the mandate,” said Brandenberger, “This action will allow normal forces to drive the corn markets and allow animal agriculture to compete on a level playing field for feed ingredients. Under the current mandate, the industry is struggling to meet its goal.” The National Turkey Federation is the advocate for all segments of the $8 billion U.S. turkey industry, providing services and conducting activities that increase demand for its member’s products. The federation also protects and enhances its member’s ability to effectively and profitably provide wholesome, high quality, nutritious turkey products. ###