Did the Renewable Fuels Standard Play a Role in Zacky Farms Bankruptcy?

October 13, 2012

Last week, the “soaring cost of grains used in animal feed” forced family-owned Zacky Farms into Chapter 11 bankruptcy protection, The Wall Street Journal reports. The California company, founded in 1928 and considered a “relatively small poultry producer,” has been shelling out $1.8 million per week to feed its 1.9 million turkeys and 600,000 chickens as corn costs reach record highs of $8 per bushel—twice the cost of corn just three years ago. According to the National Chicken Council, corn represents the largest single cost in raising chickens and turkeys.

This price spike, brought on in part by the drought, is largely a result of the Renewable Fuel Standard. To meet the biofuel production and use mandates laid out by the RFS, 40 percent of the U.S. corn crop is needed to produce ethanol, significantly cutting into the corn available food and animal feed. Since its establishment in 2005, the RFS has increased the price of corn by more than 200 percent and raised the cost of soybeans—another common ingredient in animal feed—by more than 90 percent.

 Read the full story on Zacky Farms here, and learn more about the impacts of the RFS on the food supply in the Impacts section of our website.