Energy Policies

Federal energy policies are contributing to rising food costs, the National Restaurant Association told key lawmakers this week.

The NRA submitted comments to the U.S. House Energy and Commerce Committee, which is reviewing the impact of the nation’s Renewable Fuel Standard (RFS) on the agricultural sector. The RFS, the result of a law Congress passed in 2005, requires a certain amount of biofuels – including corn-based ethanol -- to be blended into the U.S. fuel supply.  

The NRA states that the Environmental Protection Agency was wrong to deny a 2012 request by several states to waive the RFS corn-based ethanol mandate following the severe drought of 2012 and that the mandate has played a role in rising food prices.

“As the U.S. corn supply diminished last year, corn prices quickly escalated, resulting in higher food costs for the restaurant industry,” the NRA said in its comments. “In addition, the rising feedstock prices caused livestock producers to cut production and reduce the U.S. protein supply. This resulted in a ripple effect throughout the food supply chain.”

Restaurant owners have experienced a 30 percent increase in wholesale food costs over the past six years, the NRA said. The white paper notes that “corn prices rose along with the targets in the Renewable Fuel Standard from an average of $2.15 per bushel from 1997-2006 to an average of $7 per bushel in 2013.”

“A vital component to food production in the United States is the availability and affordability of corn… Therefore, when the cost of corn increases and its availability decreases, the entire food chain is adversely affected,” the NRA said.