The impact of the U.S. renewable fuel standard on food and feed prices
This briefing paper reviews evidence of the impacts of the U.S. Renewable Fuel Standard (RFS) on food prices, with a focus on corn and soy, and presents new analysis on the impact of the RFS on U.S. livestock farmers. Studies examining the relationship between food prices and biofuel demand conclude that U.S. corn prices have increased relative to a “no-RFS” scenario, although there is a wide range in the estimated size of the price impact. Using the Department of Agriculture’s (USDA) projections for ethanol consumption, this analysis estimates that the RFS has led to a 12% increase in the price of corn and that corn farmers received an increase of $5.9 billion in revenue in 2019. The increased demand for soy oil in biofuel production as a result of the RFS can be expected to significantly impact soy oil prices and palm oil imports but not soybeans or soymeal supply and prices.