29 April 2008

2 minute read

North America

Corn prices rose 138 percent globally over the last three years and global food prices increased 83 percent over the same time period. With the implementation of the new RFS mandate, some estimates predict corn prices will rise to $8.00/bushel for the 2008 crop, resulting in a negative impact of $3.59 billion to the state.

The RFS mandates the levels of renewable fuel usage regardless of market signals. The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on the state’s economy while driving up food prices around the world.

Texas plays a significant role in feeding and fueling the nation. Not only is the state the nation’s largest beef-producer, Texas also ranks in the top 10 states in poultry/egg and dairy production, which rely heavily on corn-based products for feed.

"We appreciate the good intentions behind the push for renewable fuels. In fact we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill," said Gov. Perry. "There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done."

The impact on the cattle industry is particularly harmful to family ranches. According to the USDA, two-thirds of the 149,000 cattle producers in Texas have fewer than 50 head of cattle.

In 2007, 25 percent of the U.S. corn crop was diverted to produce ethanol, according to the United States Department of Agriculture, which projects that 30 to 35 percent will be diverted in 2008. With ever increasing mandates of corn crop diversion to ethanol production through 2015, the impact on food prices globally, and to Texas specifically will only worsen.

TheCattleSite News Desk