Is the RFS a Good Thing?

Is the RFS a Good Thing? I’m Greg Martin with today’s Line On Agriculture.

The House Energy and Commerce Committee is taking a long, hard look at the Renewable Fuels Standard. That’s the law that requires transportation fuel sold in the United States to contain an increasing amount of renewable fuel, like ethanol and biodiesel.

ERICKSON: I think on the horizon you could see some Renewable Fuels Standard reform discussions taking place. Overall Farm Bureau’s message to the House Energy and Commerce Committee is just to stay the course and continue these investments because they are becoming a reality and not just a science experiment.

American Farm Bureau economist Matt Erickson says the renewable fuels industry has come a long way thanks to the policy with plants coming online that produce fuel out of non-food crops, like woodchips. And many people don’t realize that you get livestock feed from ethanol production, too.

ERICKSON: For every bushel of corn – or 56 pounds - that we take to the ethanol plant, we can create two items. We can create about 2.8 gallons of ethanol but we can also create 17 to 18 pounds of dried distillers grains that livestock producers are using within their feed rations.

But many want to point the finger at ethanol for rising food prices. Erickson says, not so fast.

ERICKSON: It’s one small piece to a very large puzzle. Within every one dollar purchase of food about 11 cents goes to the farm and agribusiness share. 89 cents goes to the marketing, processing, energy, packaging, transport, trade, servicing, advertising, labor and anything else required to get that food onto your plate.

That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.