Talking Corn, Cows and Cars in California: Part 2

September 1, 2013

Last week, the Western United Dairymen’s Michael Marsh told us about the consequences of the Renewable Fuel Standard on dairy farms, something we saw first hand while visiting dairy farmers who desperately want the public to know about the toll ethanol mandates are taking on their livelihoods.

We traveled to rural California—the largest dairy-producing state in the country—where dairy farmers have been deeply affected by the unintended consequences plaguing this failing policy, which divert more than 40 percent of the nation’s corn crop—a primary ingredient in feedstock—to ethanol production.

Just beyond bustling San Francisco exist miles and miles of rolling hills, where farms—both small and large—produce dairy products from California’s renowned “happy cows.” In these quiet hills, farms have been passed down from generation to generation, and support not only the farming families, but also surrounding communities and national retailers.

Amid the numerous costs of running a family-owned farming business—including technology, veterinary bills and machinery, to name a few—the cost of feedstock has shot up in the last few years. Driving these high feed prices and economic shock is spiking corn prices (which have jumped as much as 240 percent since 2005) brought on by mandated ethanol blending by the RFS.

Lucas Deniz of Deniz Dairy in Petaluma, a family-run dairy farm, attested to these very issues. “The cost of feed has gone up substantially. It has been rather devastating to us financially. To see the cost of feed increase 200 percent in the span of 6 or 7 years has been a tremendous financial burden. Because of ethanol, we’ve seen a similar rise in the cost of other commodities that we feed up as well, things like alfalfa, soybean, cotton, barley…That’s one of the reasons we went to an organic herd, because we can’t pay the bills anymore.”

And he isn’t alone. Other dairy farmers in the state like John Taylor, who owns and operates Bivalve Dairy with his family, agreed. “If there’s a requirement to have ‘X’ amount of tons of corn go into renewable energy, that’s just going to reduce the supply…that’s only going to make the price go up for [dairy farmers]…I’m not sure we should be taking our food and putting it into energy.”

As dairy farmers like Lucas and John noted, in California alone, the high cost of feedstock has led to a severe economic crisis. Nearly 400 dairy farms across California have been forced to shut down in the past five years as feed prices skyrocket. This crisis is echoed across the country, where 2,000 livestock farms closed last year after losing money for up to 27 straight months.

The ethanol mandate is a failing policy that lines the pockets of one kind of farmer, while devastating others, raises prices in the supermarket and puts engines at risk. Stand with Lucas, John and all the farmers whose livelihoods are being decimated by the Renewable Fuels Standard (RFS).

Demand change here.