Friday RFS Roundup – 7/18

July 18, 2014

This week, we saw continued coverage on the diverse effects that ethanol mandates have on American consumers. From increased food costs to environmental threats and governmental boondoggles, ethanol mandates harm consumers across the nation. And yet, the American people are still waiting for action from the EPA, which is now almost eight months late on releasing the 2014 blending requirements.

Learn more from this week:

NBC News, Heartland Water Crisis: Why the Planet Depends on These Kansas Farmers: Part two of a three-part series, journalist Brian Brown details America's Breadbasket crisis and the depletion of the Ogallala Aquifer, one of the U.S.’ major water sources. In this investigative piece, Brown finds that for US farmers, growing corn presents a morality problem, but US policy urges more growth. With $45 billion subsidized to produce ethanol since the 1980s, this large scale of production threatens our water & food supply.

In Short: “For farmers like Mitch Baalman, corn presents an immediate math problem. On average, a corn crop needs 24 inches of water during its growing season. But, under the rules of the new LEMA, that total would represent nearly half of his five-year allotment. ‘We’re going to have to change the mindset,’ Baalman says. ‘Pull the throttles back. Plant more alternative crops. We’re just not going to be corn, corn, corn—even though that’s what the insurance is telling us and that’s what the government is subsidizing. I would love to raise corn, too. But we can’t.’”

Chicago Tribune, Why is the EPA Stalling on Ethanol?: In this analysis, Chicago Tribune is just as perplexed as we are regarding the 2014 blending requirements that the EPA has already proposed to reduce, but hasn’t actually done so yet. This is a policy that increases consumer costs, takes away free market choice and favors one industry over all others. With each day that the EPA does not take action against this failing policy, consumers will continue to carry the consequences. 

In Short: “In the midst of all the political pressure, the EPA has stalled. The agency long ago missed a Nov. 30 deadline to set the final standard. It still hasn't issued a final decision, though we are halfway through 2014. The resulting uncertainty has left the motor fuel industry in the lurch. By making it impossible for fuel blenders to plan in a timely manner, the EPA's inaction has raised costs for them and consumers. Depending on what the agency eventually decides to do, it could temporarily disrupt fuel supplies. The EPA needs to resolve this now. But the ultimate answer lies with Congress. It's time to end the Renewable Fuel Standard.”

Consumerist, Get Ready to Pay More for Chocolate; Hershey Raises Prices for First Time in 3 Years: The headline says it all. Because of various rising commodity costs, including dairy prices, the global candy company is forced to increase its sales prices by eight percent next year. While we can’t speak for all the rising commodity prices, ethanol mandates have a direct effect on increasing dairy prices. As the price for corn and feedstock rises, these increases are passed onto the farmer, and eventually, the consumer.

In Short: “’Over the last year key input costs have been volatile and remain at levels that are above historical averages,’” said Michele G. Buck, President, North America, The Hershey Company, in a statement. “’Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year. Given these trends, we expect significant commodity cost increases in 2015.’”