OMAHA, NE – Today, a diverse group of people affected by current ethanol policies spoke out against food-to-fuel mandates and subsidies following a hearing by the US Senate Committee on Agriculture, Nutrition and Forestry. Bill Bevans, a Nebraska turkey grower, Michael Kelsey, a Nebraska cattleman, and Bill Lapp, an agricultural economist from Omaha were among the dozens who traveled to the Strauss Center at the University of Nebraska, Omaha to let their voices be heard.
“Senator Nelson held this hearing to show his support for farmers, but we’re farmers too,” said Bill Bevans, a turkey farmer from Waverly. “We are being hurt by the policies he is promoting. I’ve been in this industry for a long time, and current ethanol policies are as detrimental to our livelihoods as anything I’ve ever seen.”
Livestock and poultry farmers argue that the rise in corn and other commodity prices is due in large part to the Renewable Fuel Standard (RFS) – which mandates blending ethanol into the national fuel supply – as well as tax credits and tariffs on imported ethanol. Corn prices have more than doubled in the last year, causing widespread economic hardship for producers who rely on corn and other grains for feed.
“Commodities by their nature are volatile, but until recently, the main driver of volatility has been weather and spikes in grain prices were short-lived and rarely passed on to consumers,” said Bill Lapp, principal of Advanced Economic Solutions in Omaha.
“What we have seen in the past year has been an artificial market force, ethanol policies, driving a sustained increase in the price of grains. These price increases are now being absorbed by consumers as demonstrated by the steady upward trend of food price inflation.”
Opponents of ethanol mandates and subsidies emphasize the fact that these policies affect more than just the price of corn. Corn is a primary source of feed for livestock and poultry that produce meat, eggs and dairy. These products, and others including bakery goods, are all affected by the commodity spikes caused by food-to-fuel policies.
“In Nebraska, eggs contribute $95 million to the state economy,” said John Toney, Vice President of Henningsen Foods in Omaha.
“When our operating costs double over the course of the year, our industry suffers, and the Nebraska economy suffers with us. Of course, anyone who’s been to the grocery store lately and looked at the price of a carton of eggs realizes consumers are suffering as well.”
Today’s hearing featured several representatives of the grain and ethanol industries. They argued that the rising cost of food could be attributed to high energy costs and other variables. The livestock and poultry farmers in attendance disagreed.
“Certainly the rising cost of energy and increased demand are playing a role in higher food prices,” said Michael Kelsey, a Nebraska cattleman.
“However, feed alone makes up 70 percent of a cattleman's operating costs. When corn feed prices increase as they have, so does the cost of running our businesses. This means that our products must sell for more, which means higher beef prices for consumers.”