Talking Turkey: Corn feeding fuel, instead of food

December 5, 2013
“USDA’s average wholesale broiler meat prices leapt from 68 cents in 2005 to a record high 91 cents in December, 2012—a 35 percent increase. Turkey meat soared from 79 cents in 2005 to a record high of 120 cents a few months ago.  
And it’s not just poultry that costs more.  A variety of food products that depend heavily on corn feed are also more expensive.  
It’s safe to say RFS is hitting consumers, poultry producers, and farmers squarely in the pocketbook.”
–  Dr. Thomas Elam, president of FarmEcon, LLC
 
Feed corn prices increase the cost of raising turkeys and other meat protein animals we raise for food. Consumers ultimately pay more for these added costs of raising meat and poultry.  

Points to consider from the National Turkey Federation: 

Consumers have seen food prices increase faster than general inflation since the current RFS was enacted in 2007.  Food affordability, which had been improving for decades, now is deteriorating.
 
We saw how price spikes caused by this government mandate impacts turkey growers when corn prices reached almost $8 per bushel: U.S. turkey production declined by 9 percent, resulting in loss of rural jobs.
 
Corn is the major ingredient in turkey feed and almost all livestock and poultry. Corn is the primary reason why one turkey company went bankrupt in 2012 and why the industry already has lost 750 jobs in the last 12 months.
 
The RFS has destabilized corn and ethanol prices by offering an almost risk-free demand volume guarantee to the corn-based ethanol industry. Domestic and export corn users other than ethanol producers have been forced to bear a disproportionate share of market and price risk. Ethanol prices should reflect the fuel’s energy value relative to gasoline, not a corn price that is both inflated and destabilized by the inflexible RFS. As corn is syphoned off to ethanol, animal agriculture is losing jobs in rural America.
 
The National Turkey Federation encourages pointed discussion of the RFS.  Animal agriculture has long been suffering at the hand of this broken policy, especially feed costs in the turkey business.  The RFS has caused an increase of $1.9 billion in feed cost alone for turkey farmers, as corn continues to be syphoned off to ethanol.
 
RFS has been such a poorly managed mess, it’s time to drain the swamp. The RFS needs a fresh start in order to put in place a smarter policy on the mix of fuel and feed.