Response to National Council of Chain Restaurants RFS Guest Editorial

Posted on: November 28, 2012 in Renewable Fuel Standard

To the Editor:

In regard to the November 28th op-ed, “A Mandate to Raise Food Prices” by Rob Green, Executive Director of the National Council of Chain Restaurants:

If he really believes that the major cause of higher food bills isn’t the drought last summer but the Renewable Fuel Standard (RFS) enacted by Congress and signed by President Bush in 2005, then he’s misinformed about both the food and biofuels industries.

Mr. Green writes that following the enactment of the RFS the “cost of food commodities immediately began to rise” and that “as a result, Americans have had to deal with some of the highest food prices on ¬record.” According to the actual numbers, prices rose an average of only 2.57% per year -- right in line with the 20-year average for annual food inflation. Moreover, 2010 saw the lowest year-over-year food inflation in nearly 50 years. Meanwhile, the ethanol industry produced a record amount of fuel that year.

If there were any truth to the claim that retail food prices have increased abnormally since 2005, it would be mostly because of surging energy prices. In fact, 86% of the average household’s food bill pays for energy, transportation, processing, packaging, marketing, and other supply chain costs. Only 14% pay for the raw agricultural ingredients in our groceries.

As a representative of the nation’s chain restaurants, Mr. Green should also be aware that the US ethanol industry produced about 39 million metric tons of livestock feed during the 2010/2011 marketing year. That is greater than the total amount of grain consumed by all of the beef cattle in the nation’s feedlots. And it’s enough feed to produce 50 billion quarter-pound hamburgers – seven patties for each person on the planet.

Mr. Green should be thinking more about serving up those burgers and less about serving up baloney.

Bob Dinneen

Bob Dinneen is President of the Renewable Fuels Association, the trade association of the US ethanol industry.

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