• NRA
    NRA We Serve America's Restaurants Representing nearly 500,000 restaurant businesses, we advocate for restaurant and foodservice industry interests and provide tools and systems that help members of all sizes achieve success.
  • NRAEF
    NRAEF Building & Retaining Talent The NRAEF is focused on developing a stronger workforce and building the next generation of industry leaders through education, scholarships and community engagement.
  • NRA Show
    NRA Show May 19-22, 2018 As the international foodservice marketplace, the NRA Show provides unparalleled opportunities for buyers and sellers to come together, conduct business and learn from each other.
  • ServSafe
    ServSafe Minimize Risk. Maximize Protection. For over 40 years, ServSafe® training programs have delivered the knowledge, leadership and protection that have earned the trust and confidence of business leaders everywhere.

National Restaurant Association - Ethanol could fuel debate as corn production declines

Skip to navigation Skip to content

News & Research

Share:
Email Print
News RSS

Ethanol could fuel debate as corn production declines

As drought in the Midwest continues to hurt corn crop conditions and the amount of corn available for food consumption declines, the question of whether Congress should reduce ethanol mandates could become a hot-potato issue when it returns from recess in September, commodities expert John Barone said.

Hard hit this summer by the extreme weather, the corn crop, a key component of the U.S. food supply and integral commodity for the foodservice industry, is "an official disaster," said Barone, CEO of Fairfield, N.J.-based Market Vision Inc.

With the U.S. Department of Agriculture confirming last week that corn yields dropped to 123.4 bushels per acre from pre-drought levels of 166 bushels per acre, and with production cuts of 2.2 billion bushels, "the situation is even worse than everyone thought," he said.

He said there's been a significant decline in corn production that will negatively impact the food supply and foodservice businesses. At the same time, he noted that nearly 42 percent of the crop has been pegged for the production of ethanol. That quota, he said, would fulfill the renewable fuel standards the federal government has set.

According to Barone, approximately 4.5 million of a total of 10.8 million bushels of corn is expected to be used for ethanol production this year.

Barone indicated that the potential debate in Congress could focus on why so much of the crop would go toward ethanol production when the shortage is jeopardizing the food supply.

"The big issue at this point is whether Congress will do anything about the situation," he said. "We have ethanol mandates in place and it is written into law that Congress can reduce those mandates during a crisis. This year's corn crop really qualifies as a crisis."

The USDA, in its agricultural weather and drought update on Aug. 14, rated the condition of 51 percent of the corn crop as poor to very poor.

The National Restaurant Association last year supported Congress' repeal of subsidies on corn-based ethanol, saying the tax credits distorted the market and diverted resources away from the food supply, which affects food prices.

According to the NRA, food costs represent about 33 cents of every dollar in restaurant sales.

Conserve RSS Healthcare RSS Conserve RSS

▲ Back to Top

We're glad you're here!®

® 2012-2017 National Restaurant Association. All rights reserved.

2055 L St. NW, Suite 700, Washington, DC 20036
(202) 331-5900 | (800) 424-5156