Focus Remains on Corn Volatility to Feed Costs

December 4, 2013

National Turkey Federation Keeps Focus on RFS Volatility of Feed Costs
Turkey producers say less corn siphoned away from feed is first remedy

            WASHINGTON, D.C.,  Dec 4, 2013– The National Turkey Federation on Thursday will encourage government regulators at a national public hearing to proceed with their one-year proposed decrease in the 2014 Renewable Fuels Standard (RFS) but will warn that Congress still must pass legislation fully reforming the flawed RFS. The forced blending of corn ethanol into gasoline has created an unsatisfactory business model for corn farmers as well as poultry and livestock producers, according to the National Turkey Federation.

            “Ethanol’s leaders just one year ago had dismissed the full costs of the RFS burden on corn prices as being just four cents a bushel, but now claim that the small decrease proposed would drive corn down by more than a dollar,” said National Turkey Federation president Joel Brandenberger. “When it served their purpose they tied themselves to a study showing minuscule impact of the RFS on feed prices. Now their reaction against this proposed small cutback to the current RFS has been to claim a potential farm crisis and the gutting of the RFS. The fact is that corn prices were driven down by this year’s huge corn acreage planted to reap ethanol profits. But meanwhile, well into next spring, turkey farmers still must feed from supplies of last year’s high-cost corn planted for ethanol.” 

            Brandenberger referred to the October 2012 FAPRI Food and Agriculture Policy Research Institute study of a 4 cent per bushel decrease in corn prices under the complete absence of RFS corn ethanol, compared to this October’s warning by POET ethanol’s Jeff Lautt that the 13 billion gallon corn ethanol proposal could push prices down by $1 a bushel or more. "You would be sitting on the heels of a potential farm crisis," Lautt was quoted as saying. "It would be gutting the pure, core intention of the RFS."

            "They want to have it both ways, “Brandenberger said.  "When it suits their purposes, the RFS has no impact on the blending of ethanol into gasoline.  Then, suddenly, a tiny reduction in the RFS will lead to the destruction of the industry.”  He added that the current decline of corn prices from an abundant harvest will do little good for turkey farmers who must first use up supplies of last year’s ethanol-driven higher-priced $6 bushel corn.

            In testimony during an EPA public hearing Thursday, National Turkey Federation president Joel Brandenberger will cite the forced diversion of corn to ethanol that reduced the available share of the feed supply for poultry and livestock from 55 percent to just less than 41 percent of the corn supply, causing market volatility and higher feed prices. In the eight years since the 2005 RFS mandate took effect, poultry and livestock lost access to what was once just over 6 million bushels of corn to a current availability of less than 4.4 million bushels. Corn ethanol now claims the largest share of the corn crop.  The ethanol byproducts of distillers dried grains (DDGs) fail to match the nutritional value of corn, and turkeys can tolerate no more than 10 percent DDGs in their corn and soybean feed ration.