The US federal government’s biofuels policy has come under attack once more, as industry commentators slammed the use of grains by the subsidised ethanol industry at a conference sponsored by the National Chicken Council and the US Poultry & Egg Association.
“The policy favouring ethanol and other biofuels over food uses of grains and other crops acts as a regressive tax on the poor,” agricultural economist Thomas Elam, president of FarmEcon LLC, told the conference yesterday (7 April).
Competing demand from food and ethanol manufacturers is seen as one of the key drivers in dramatically increasing grain prices, which hit record highs last week.
Another driving factor has been growing demand for protein from emerging markets like India and China.
This, coupled with declining production, has caused prices to skyrocket.
“The biofuels policy that is driving higher prices of corn, other grains, and soybeans will cost the US economy more than US$100bn from 2006 to 2009,” Elam said. “It is inevitable that these costs will be passed along to consumers.”
The NCC told just-food that its members have spent $3.5bn in extra grain costs this year – that is over $80m each week.
“With prices going up, our members are trying to pass cost increases along to consumers but they are still feeling the pressure on their margins,” an NCC spokesperson told just-food.
The NCC said that it strongly opposes federal ethanol targets and the subsidies paid to the biofuels industry.