The American Feed Industry Association strongly supports H.R. 3097, the Renewable Fuels Standard (RFS) Flexibility Act, legislation introduced by Representatives Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.), to give the Department of Energy and the Department of Agriculture the needed authority to adjust the congressionally mandated Renewable Fuels Standard (RFS) for corn-based ethanol when national corn stocks fall below specified levels.
AFIA believes national food security is equally as important as energy security, and federal actions in both areas must be cooperative and realistic, a philosophy reflected in AFIA’s testimony before a House Agriculture Committee hearing on feed availability held last month.
Under the RFS Flexibility Act, grains are allocated by market demand rather than by government mandates, and would require the corn stocks-to-use ratio to be reviewed twice a year. If the ratio is below 10 percent, the RFS would be reduced, ensuring enough corn to meet the demand of all end-users. If stocks drop lower, then the RFS is further reduced.
Rep. Goodlatte also introduced a second piece of legislation, H.R. 3098, the Renewable Fuel Standard Elimination Act, which would completely eliminate the RFS and force ethanol to compete in a free market. The RFS Elimination Act is co-sponsored by Rep. Jeff Denham (R-Calif.).
AFIA supports any effort to eliminate government mandates and equalize market competition for corn. The association raised its concerns regarding the impact of reduced feed supplies and increased prices in the agricultural commodities market when Philip Greene, vice president of Foster Commodities, Foster Poultry Farms, testified Sept. 14 before the House Committee, “Anything affecting the cost of producing feed for livestock and poultry, directly impacts the cost of animals to the processor, the cost of meat, milk and eggs to the retailer, and ultimately, the cost of food to the consumer.”
Feed represents about 70 percent of the cost of production of meat, dairy and poultry. Animal feed represent one of the largest uses of corn, a major ingredient in livestock and poultry feeds.
AFIA’s 500 member companies produce over 75 percent of the nation’s commercial feed and pet food. The U.S. feed industry is greatly affected by price fluctuations in the market. When prices become distorted and do not accurately reflect supply and demand conditions, the results are felt not only by AFIA members but throughout the supply chain, from farmers and ranchers to consumers at the grocery store.