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National Restaurant Association - NRA continues fight against Renewable Fuel Standard

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NRA continues fight against Renewable Fuel Standard

As drought continues to ravage U.S. corn crops, the National Restaurant Association and a coalition of nearly 20 other food industry groups are again pushing the Environmental Protection Agency to waive the federal government's Renewable Fuel Standard, or RFS, for corn-based ethanol.

In a letter sent to the EPA Oct. 4, the coalition said the decline in the corn yield has caused "virtually the entire food chain, from farm to table," to become "adversely affected by the reduced availability and increased cost of corn caused in large part by the drought, but certainly exacerbated by the [Renewable Fuel Standard]."

Out of a total 10.8 million bushels of corn harvested this year, nearly 42 percent, or 4.5 million bushels, has been designated for the production of ethanol.

At the same time, the decline in corn allotted for food production has led to a 60-percent increase in its cost since mid-June, the coalition said. Because of this, some livestock producers have decided to liquidate their herds or flocks and that is expected to result in supply shortages and higher price spikes.

The corn crop, which was hit by the worst drought in more than 50 years, declined this year to an estimated 988 million bushels, approximately 6.3 percent less than the amount produced a year ago, the U.S. Department of Agriculture reported.

The letter further stated that the restaurant industry, "as an end ‘consumer' of proteins, baked goods and beverages, is negatively impacted multifold by the same market forces impacting commodities throughout the supply chain. As the U.S. corn supply dwindles ..., prices for the commodity continue to skyrocket and result in even higher food costs, problematic for an industry that runs on razor-thin profit margins."

The coalition noted that the RFS, if implemented, would "exacerbate the effects of the drought by further increasing the price of corn, and in turn, all food products that depend on corn for their production. A waiver would directly relieve these pressures ... and is the appropriate public policy choice in light of the projected shortages."

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