Ensuring Tax Exempt Organizations the Right to Appeal Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, while reading through the pages of the Wall Street Journal last week, I was overcome with a sense of déja 2 vu. As many of my colleagues have heard me speak on the Senate floor many times each year over the last several years about ethanol and about misconceptions about that, these misconceptions showed up in an op-ed piece in the Wall Street Journal last week.

Once again, in this case it happens to be chain restaurants and chicken producers teaming up to smear home-grown biofuel producers at the expense of energy independence and cleaner air. It seems as if every couple of years food producers and grocery manufacturers team up with Big Oil to try to undermine the extremely successful Renewable Fuel Standard Program.

Here is a little history for everyone. In 2008, it was the big food producers led by the Grocery Manufacturers Association, because, presumably, in our economy, in our society, grocery manufacturers have more prestige than Big Oil. In 2010 and 2012, it was global integrated meat producers, led by Smithfield Foods and the American Meat Institute, presumably because they have more prestige than Big Oil.

The opinion piece I am referring to in the Wall Street Journal this time was written by the head of the National Chicken Council and the National Council of Chain Restaurants. And under these circumstances, compared to the other two instances I cited, there is really no difference. They have prestige that Big Oil doesn't have.

This article makes many of the same erroneous and intellectually dishonest claims we have heard dozens of times before, and I am going to take this opportunity to do a simple fact-check of some of the most egregious claims.

First, these two authors claim that since 2005, when the renewable fuel standard was first adopted, costs of vital food commodities, including corn, grains, oilseeds, poultry, meat, eggs and dairy have risen dramatically.

This is pure myth. The fact is consumer food prices have increased by an annual rate of 2.68 percent since 2005. In contrast, food prices increased by an average of 3.47 percent in the 25 years leading up to passage of the renewable fuel standard in 2005. Prices for chicken breasts have been nearly flat over the past 7 years, averaging $3.43 per pound in 2007 and just 3 pennies more, to $3.46 per pound, in 2014. Corn prices are expected to average $3.50 per bushel this year, according to the Department of Agriculture.

This would be the lowest price in nearly 10 years and 17 percent below the average price of $4.20 a bushel in 2007 when the renewable fuel standard was enacted.

That is a fact. With ethanol production at record levels today, corn prices are lower now than they were in 2007. But I don't know how many times over the last several years I have listened to this business about ethanol causing corn prices to go up and food prices would go up. And food prices went up. But when corn is $3.50, we don't see food prices come down. It has been proven time and again by the EPA, by the USDA, and others: There is no correlation between corn prices or ethanol production and retail food inflation or food prices. Once again, that is just a simple fact.

Second, these authors claim that as a result of the renewable fuel standard, corn is being ``diverted'' from livestock feed to ethanol. Again, this claim is pure falsehood. Corn used for ethanol has come from the significant increase in corn production since 2005. In 2005, American farmers produced 11.1 billion bushels of corn. In 2014, they produced 14.1 billion bushels of corn. Why? Because the market responds and the farmers respond to the increased use of corn, and they will meet it whether it is for biofuels or anything else.

Here is something very significant: One-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn coproducts available for feed use is larger today than at any time in history. So it is hardly being diverted. But time after time, a prestigious newspaper such as the Wall Street Journal continues to tell the people of this country that 40 percent of corn production goes to make ethanol. They are right--40 percent goes to the ethanol plant. But out of a 56-pound bushel of corn, 18 pounds is left over for animal feed--and very efficient animal feed, let me say, badly in need and welcomed by farmers. In fact, some of it is even exported. But does the Wall Street Journal ever make that clear, that it isn't 40 percent of corn that is used for ethanol; it is 26 percent or 27 percent that is used for ethanol? So, just as I said, corn is not being diverted.

The same can be said for their misleading claim that ethanol production has contributed to global food scarcity. In the 15 years prior to the enactment of the renewable fuel standard in 2005, U.S. corn exports averaged 1.8 billion bushels per year. In the 10 years since the renewable fuel standard's passage, corn exports have averaged yet more--not a whole lot more but 1.84 billion bushels. So with 14.33 billion gallons of corn ethanol, corn exports are slightly higher than they were prior to the renewable fuel standard.

Another fact-check: The authors of the opinion piece also claim that corn ethanol has resulted in a significant increase in the volatility of food costs, which has left prices higher, they say. So I looked into the average food inflation going back to 1970. During the 1970s, food inflation averaged 7.8 percent. In the 1980s, it was 4.6 percent. In the 1990s, it was 2.8 percent. In the 2000s, it was 2.9 percent. So far this decade, it has been 2.2 percent--or the lowest rate of increase at the same time that we are producing record amounts of corn ethanol.

Finally, these two writers for the chain restaurants and for the chicken people claim that the increases in feed cost have affected the American production of beef, pork, and chicken. They state that production had increased consistently over the past 30 years but has now leveled off due to the higher cost of feed.

Again, this is nowhere near reality. Let's check the facts. The reality is that the Department of Agriculture is projecting red meat and poultry production of 95.2 billion pounds this year--up 10 percent from 2005. More growth is yet expected. The Department of Agriculture projects a production record of red meat and poultry in 2016, with 96.8 billion pounds--up 12 percent from 2005.

Just a few years ago, when corn prices had peaked at more than $7.50 a bushel, grocers, food producers, and restaurants were claiming--as I said once before but let me emphasize--that food inflation would approach 10 percent because of the renewable fuel standard. They warned then that they would be forced to pass those higher costs on to consumers immediately. As I have hinted before, today the price of corn is $3.50--less than half of what it was; in fact, $1 below the cost of production.

With lower corn prices, have consumers seen a dramatic reduction in retail food prices? In other words, are the benefits of lower grain prices being passed on to the consumer by Big Food? Obviously not. Ask any person shopping in the grocery stores. Corn prices have come down by more than half in the past 2 1/2 years, so why are food producers holding prices steady or even increasing them? We accuse Big Oil of gouging. Isn't it about time, with $3.50 corn, that we accuse Big Food of price gouging?

The fact is, domestic renewable fuel producers are feeding and fueling the world at the same time. The 14.3 billion gallons of ethanol that was produced in the United States could more than displace the gasoline refined from all of the oil imported from Saudi Arabia. And where would we rather get our energy from--volatile parts of the Middle East or producers right here in the United States? And I say that not only for ethanol; I say that for oil, I say that for coal, I say that for nuclear, and I say that for all sorts of alternative energy.

We should be proud of our Nation's farmers and biofuel producers. Efficiencies gained have allowed farmers to produce ever-increasing yields, with greater environmental stewardship, including using less water and less fertilizer. Ethanol production has also seen efficiency gains.

These are facts: In 1982, 1 bushel of corn produced about 2.5 gallons of ethanol. Today's ethanol plants are producing more than 2.8 billion gallons of ethanol. We have a plant in Ida County, IA, that can get almost 3 gallons of ethanol from 1 bushel of corn.

According to the U.S. Energy Information Administration, if ethanol yields per bushel had remained at the 1997 levels, it would have required 343 million bushels--or 7 percent more--of corn to produce the same amount of fuel last year. That corn would have required the use of 2.2 million additional acres--or approximately half the State of New Jersey--just to keep up when we had the more inefficient production of ethanol.

Homegrown biofuels are extending our fuel supply and lowering prices at the pump for consumers. Biofuels account for 10 percent of our transportation fuel today. This economic activity supports American farmers, rural economies, and keeps the money at home rather than sending it abroad.

In recent years, our national security and economic well-being have been too dependent on oil imports--and from where? From tinhorn dictators and regimes that are always trying to harm Americans. We don't need to put a Navy fleet in harm's way to protect shipping lanes from the Middle East when we have biofuels that come right out of the Midwest of the United States.

Our country needs a true ``all of the above'' energy policy, as we all talk about, and biofuels are an important component of that policy.

Do you know what is really wrong with people who sometimes talk about ``all of the above,'' the way I see it, from different segments of energy? There are people who say they are for ``all of the above,'' but they are for none of the below the ground. And then there are people who say they are for ``all of the above,'' but they are for all below the ground but not the things that come from above the ground, such as solar energy producing corn that produces ethanol, as an example, or wind.

In 2005 and again in 2007, the Federal Government made a commitment to homegrown renewable energy when Congress passed the renewable fuel standard. The policy is working. I intend to defend all attacks against this successful program, whether they come from Big Oil, the EPA, Big Food, Big Restaurant, or others.

Secondly, I tried to do some fact-checking by Mr. Brown and Mr. Green, who wrote that article, and I am not very good at saying exactly whether they ought to have one Pinocchio or four, but they ought to look at having a Pinocchio because they are wrong on so many instances.

BREAK IN TRANSCRIPT

Source