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Study finds no direct correlation between the Renewable Fuel Standard and rising food prices

Posted 12 June 2013 in

National

Opponents of renewable fuel have tried to claim over and over again that the Renewable Fuel Standard is to blame for rising food prices. But a new study from ABF Economics pours cold water on this false premise. Here’s what you need to know about the RFS and food prices:

1. The Renewable Fuel Standard (RFS) isn’t directly correlated to food prices.
2. According to a recent study from the World Bank, rising food prices are actually driven by energy costs, specifically oil. As they put it, “Of all the drivers of food prices, crude oil prices mattered the most.”
3. Not only has the RFS not been directly correlated to food prices, the Consumer Price Index shows that retail food prices have gone up more slowly since the RFS kicked in five years ago (See Table 1 on page 4 of the report).
4. The RFS is also helping to lower feed cost for farmers and ranchers, as they work to feed America. Ethanol production results in a byproduct (known as “dried distillers grain” or DDGS) that is used as highly-nutritious animal feed. Higher-quality feed means livestock and poultry producers can use less of it, and DDGS have increased the availability of animal feed by 21 percent compared to the use of corn alone.

Read more from the Renewable Fuels Association on the ABF Economics study.

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Study finds no direct correlation between the Renewable Fuel Standard and rising food prices