Reducing America’s consumption of renewable fuels based upon arbitrary, pre-determined thresholds for corn demand and supply ratios is unnecessary and may lead to higher prices at the pump warned leading biofuel organizations — the American Coalition for Ethanol (ACE), the American Farm Bureau Federation (AFBF), Growth Energy, the National Corn Growers Association (NCGA), the National Farmers Union (NFU), the National Sorghum Producers, and the Renewable Fuel Association (RFA). 

The groups’ warning came in a letter sent to Representatives Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.) following the introduction of their legislation to reduce or eliminate the volumes of renewable fuel use required by the Renewable Fuels Standard (RFS) based upon corn stocks-to-use ratios. 

The groups pointed out a number of flaws in the rationale for such legislation.

Speaking to concerns over high corn prices, the groups wrote, “Numerous studies have concluded that the RFS is a minor contributor to corn prices. The most recent study, a July 2011 analysis commissioned by the International Centre for Trade and Sustainable Development, found that corn prices would have been exactly the same in 2009/10 if both the RFS and Volumetric Ethanol Excise Tax Credit (VEETC) had not existed."

The groups also highlighted the inherent risk associated with tethering public policy to frequently changing corn stocks-to-use data reported by the Department of Agriculture (USDA).