Study Completed on Effects of Renewable Fuel Standard

The Food and Agricultural Policy Research Institute recently conducted a study for the Illinois Farm Bureau of the impact of an Renewable Fuel Standard similar to that contained in S. 1006 and H.R 2423, legislation that would require renewable fuels to account for 3 percent of the nation's motor fuel supply by 2011 and 5 percent by 2016. The study concluded:

  •  Increased demand for renewable fuels will increase the price of corn by 28 cents per bushel and soybeans by 17 cents per bushel by 2011.
  • Corn used for ethanol will increase to 1.78 billion bushels and soy oil demand will increase to nearly 2.5 billion pounds by 2011.
  • Farm income would increase more than $3 billion annually by 2011.
  • Government payments to farmers will decrease significantly as corn and soybean prices exceed the point at which loan deficiency and counter-cyclical payments would apply.

    The study is available on the Illinois Farm Bureau web site at www.ilfb.org