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IMPACT ON FOOD PRICES

  • Since the inception of the RFS, the price of corn has fluctuated dramatically. 
  • Corn is a foundational ingredient in the American food supply and is used not only as a value-added product in many of the foods we buy but also as the primary feed grain in animal agriculture.
  • Volatility in corn prices causes volatility for every food in the supply chain, from baked goods to meat products to ice cream.

Before the RFS was enacted, corn prices were fairly stable, but the RFS has introduced tremendous volatility into food commodity markets, resulting in wildly fluctuating prices for corn and animal proteins that use it.

The rising prices from the RFS have far outpaced the rate of inflation. Since 2005, the year RFS was enacted, the CPI for food has risen 30% compared with a 22% increase in core inflation during that same time.3

1 Energy Information Administration, Annual Energy Outlook, 2004, 2012, and 2014.
2 Congressional Research Service, Renewable Fuel Standards (RFS): Overview and Issues, March 13, 2013 pp.19-23; 21-22.
3 Bureau of Labor Statistics, CPI (NSA), U.S. City Average, Food, January 2005 to June 2015.