Economist Still Opposes RFS Despite Livestock Recovery

bivi-nc-meyerDespite the fact that livestock margins have made a dramatic recovery in the past few years as availability of feed has increased and prices have decreased, a leading livestock economist still opposes the Renewable Fuel Standard (RFS).

“We’ve thrown billions of dollars at this industry already and it ought to have to stand on its own,” said Steve Meyer, Paragon Economics, during an interview last week at an event for pork producers. “It has a place in the fuel business as an oxygenate and as an octane enhancer, it’s not going away from there.”

Meyer, who has always been an outspoken critic of U.S. energy policy, says his beef with the RFS is that it caused ethanol production to increase too much too quickly. “The trend yield on corn is up about two bushels per year. If you had grown the ethanol business at a rate equivalent to that, I wouldn’t have been able to gripe too much about it,” he said. “But it was far faster than that …. and the economic impact of that was very negative for (livestock) producers.”

However, the tide has turned dramatically to the point where demand and prices for livestock and poultry are riding high and there is almost record high feed availability with manageable prices. “We’re not going back to $2 corn and $180 bean meal but we’re at the lowest levels on costs in five years,” said Meyer. “We’re not increasing corn usage for ethanol every year like we were, it’s pretty much flat. It’ll grow a little bit but not much and we can probably keep up with that with trend yield growth on corn.”

Despite that, Meyer thinks the RFS needs to go away. “I don’t hate ethanol,” he says he tells corn producers. “I just don’t like subsidized, mandated ethanol when I’m the alternative user of the input.”

Interview with Steve Meyer, Paragon Economics

One thought on “Economist Still Opposes RFS Despite Livestock Recovery

  1. Steve should read the book “Who Moved My Cheese?” Or maybe he should write a new book called “Who Moved MY Corn?” Problem is, it wasn’t ever YOUR corn. The biggest beneficiaries of TAXPAYER subsidies on grain were the PORK and POULTRY producers, who for years got corn at a price that was far below the farmer’s cost of production–and taxpayers had to bail the farmer out. So, spare us the “taxpayer subsidy” nonsense. You got your share too. Stop crying about ethanol and the RFS! Get over it.