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Biofuels policies cost various industries billions, study says

A study commissioned by key members of the meat and poultry sector in the US has determined that Washington's policy on biofuels has cost the poultry and livestock industries billions of dollars.

April 9, 2008  By

April 8, 2008

The U.S. biofuels policy that is driving higher prices of corn, other grains and soybeans is costing the poultry, livestock and ethanol production industries billions of dollars per year, according to a new FarmEcon LLC study and its author, Thomas Elam.

The study, commissioned by the National Chicken Council, the National Turkey Federation and the American Meat Institute, forecasts higher feed costs in the 2008/2009 crop year will cost the poultry industry (including broilers, turkeys and layers) about $8 billion in additional feed costs, on top of a nearly $6 billion rise in the 2007/2008 year.


It forecast additional 2008/2009 feed costs for the swine industry at about $3.6 billion after a nearly $3 billion cost rise in 2007/2008. For fed cattle, it put the additional cost at almost $3 billion, compared to a $2.2 billion feed cost rise in 2007/2008.

Input costs for ethanol distilleries will climb by over $8 billion in 2008/2009 after jumping $4.5 billion in 2007/2008. According to the study, ethanol distilleries already in operation, plus those slated to come on line in the next year, will need up to 5 billion to 5.5 billion bushels of corn per year by 2009, but only about 4 billion bushels will be available, causing them to operate at only 75 percent to 80 percent of capacity.

Elam said many ethanol distilleries will have to suspend operations and most will operate at a significant loss.

For the full text of the 37 page study, go to:


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