The RFS is responsible for corn and soybean glut
In his Oct. 24 column, Minnesota Farmers Union President Gary Wertish claims the economic crisis hitting farms can be corrected by increasing biofuel obligations under the Renewable Fuel Standard. However, he conveniently fails to mention that th...
In his Oct. 24 column , Minnesota Farmers Union President Gary Wertish claims the economic crisis hitting farms can be corrected by increasing biofuel obligations under the Renewable Fuel Standard. However, he conveniently fails to mention that the RFS is largely responsible for the current corn and soybean glut plaguing America's farmers and driving down the cost of both commodities.
Expecting high prices and a guaranteed market, many farmers converted land to corn and soy after the RFS was passed to feed government-mandated biofuel production goals. Since its institution in 2005, acres devoted to planting diverse crops like wheat, cotton, oats, barley and sorghum have declined while more than 16 million additional acres of corn and soybeans have been planted nationwide. U.S. plantings of corn and soy, both of which are used to make biofuels, have skyrocketed - with 50 percent more corn and soy planted in the Dakotas alone between 2005 and 2015.
As corn and soybean harvests reach record supplies-guided more by government and state mandates than actual market demand-the U.S. agricultural economy and farm incomes have suffered.
Now, ethanol proponents argue the solution to this RFS-inspired glut is a further expansion of the RFS volumes. Consumer demand for biofuels - not arbitrary government mandates - should guide corn and soy production. Expanding RFS volume obligations is a poor substitute for actual market demand. Further expanding the RFS will only succeed in increasing corn and soybean acres, reducing acres of other crops, and leaving farmers no better off.
The only beneficiaries of higher biofuel mandates would be biofuel companies, not our farmers.
Elam is president of Farm Econ LLC, an agricultural and food industry consulting firm.