Message Information

Date 08/10/2012 05:14 PM From Kristin Wilcox <kwilcox@affi.com > To LisaP Jackson/DC/USEPAIUS@EPA

The Honorable Lisa P. Jackson Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, DC 20460

Dear Administrator Jackson: On behalf of America's food and beverage producers and consumers, we urge you to waive the amount of renewable fuel that must be produced under the Renewable Fuels Standard (RFS), as the U.S. is expected to experience a significant drop in corn yields due to historic drought conditions across America's heartland. The undersigned organizations represent the nation's food, beverage and consumer products makers, who are responsible for $2.1 trillion in annual sales, employ 14 million workers and contribute $1 trillion in added value to the economy every year. EPA's RFS requires that an estimated 13.8 billion gallons of domestic corn ethanol be blended into the nation's motor fuel supply in 2013. This mandate, which diverts food stock for the production of fuel, will exacerbate the global economic impact of the devastating drought occurring in U.S food producing regions. Congress delegated to the EPA administrator the authority to waive, in whole or in part, that requirement if the RFS "would severely harm the economy," according to the Clean Air Act, Sec. 211(o)(7). Already, approximately 40 percent of all corn grown in the U.S. is dedicated to ethanol production. Corn is an important feedstock for the meat, milk and poultry production that feeds America and the world. Our exports of corn, soybean and meat products - the items most at risk from the drought - totaled $53 billion in 2011, according to the Census Bureau. The increasing demand for corn needed to produce ethanol, combined with a significant reduction in overall available corn supplies due to the prolonged drought, may lead to an insufficient amount of corn available for food production. More than half of the nation's counties have now been declared disaster areas and the U.S. Department of Agriculture (USDA) has reported that more than half of the corn crop is listed as poor to very poor. This has resulted in higher demand relative to the available supply and led to a 45 percent jump in corn prices in the two month period ending July 31. The extreme losses to grain yields, and other food crops, because of the most severe U.S. drought in fifty years is already having a ripple effect throughout the food supply chain both in the U.S. and around the globe. USDA's latest forecast for retail food prices predicts the drought will drive up the cost of beef and poultry as much as four to five percent this year. Granting a waiver, or partial waiver, from the RFS mandate would significantly reduce the harm food makers and consumers will feel because of the drought. A recent study by the United Kingdom's Department for Environment, Food and Rural Affairs found that reducing the RFS by one-half would reduce the magnitude of corn price spikes by as much as 40 percent.As American consumers continue to cope with a period of pro-longed economic turmoil, and U.S. food,

beverage and consumer products makers from farm to fork struggle with record high commodity prices, we believe it is EPA's duty to grant a waiver for the applicable volume of corn ethanol required by the RFS. We stand ready to assist you in ensuring that consumers of U.S. food, beverage and consumer products have access to an abundant and affordable supply. Thank you for the immediate consideration and action on our request. Sincerely,
American Bakers Association American Beverage Association American Dairy Products Institute American Feed Industry Association American Frozen Food Institute Associated New York State Food Processors Association for Dressings and Sauces California League of Food Processors Canned Food Alliance Food Marketing Institute Grocery Manufacturers Association Independent Bakers Association International Dairy Foods Association Maine Food Producers Alliance Michigan Food Processors Association Midwest Food Processors Association National Association of Margarine Manufacturers National Council of Chain Restaurants National Confectioners Association National Fisheries Institute National Frozen Pizza Institute National Restaurant Association Northwest Food Processors Association Ozark Food Processors Association Seafood Products Association Snack Food Association

Texas Food Processors Association RFS AFFI-GMA FINAL.doc

OEX Processing Information Processed Date: Processed By

P0 Office

Message Count

### The Honorable Lisa P. Jackson

Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, DC 20460

Dear Administrator Jackson:

On behalf of America's food and beverage producers and consumers, we urge you to waive the amount of renewable fuel that must be produced under the Renewable Fuels Standard (RFS), as the U.S. is expected to experience a significant drop in corn yields due to historic drought conditions across America's heartland.

The undersigned organizations represent the nation's food, beverage and consumer products makers, who are responsible for $2.1 trillion in annual sales, employ 14 million workers and contribute $1 trillion in added value to the economy every year.

EPA's RFS requires that an estimated 13.8 billion gallons of domestic corn ethanol be blended into the nation's motor fuel supply in 2013. This mandate, which diverts food stock for the production of fuel, will exacerbate the global economic impact of the devastating drought occurring in U.S food producing regions. Congress delegated to the EPA administrator the authority to waive, in whole or in part, that requirement if the RFS "would severely harm the economy," according to the 

### Clean AirAct, Sec. 211(o)(7).

Already, approximately 40 percent of all corn grown in the U.S. is dedicated to ethanol production. Corn is an important feedstock for the meat, milk and poultry production that feeds America and the world. Our exports of corn, soybean and meat products - the items most at risk from the drought - totaled 

### $53 billion in 2011, according to the Census Bureau. The increasing demand for corn needed to produce ethanol, combined with a significant reduction in overall available corn supplies due to the prolonged drought, may lead to an insufficient amount of corn available for food production.

More than half of the nation's counties have now been declared disaster areas and the U.S. Department of Agriculture (USDA) has reported that more than half of the corn crop is listed as poor to very poor. This has resulted in higher demand relative to the available supply and led to a 45 percent jump in corn prices in the two month period ending July

The extreme losses to grain yields, and other food crops, because of the most severe U.S. drought in fifty years is already having a ripple effect throughout the food supply chain both in the U.S. and around the globe. USDA's latest forecast for retail food prices predicts the drought will drive up the cost of beef and poultry as much as four to five percent this year.

### Granting a waiver, or partial waiver, from the RFS mandate would significantly reduce the

harm food makers and consumers will feel because of the drought. A recent study by the United Kingdom's Department for Environment, Food and Rural Affairs found that reducing the RFS by one-half would reduce the magnitude of corn price spikes by as much as 40 percent.

As American consumers continue to cope with a period of pro-longed economic turmoil, and U.S. food, beverage and consumer products makers from farm to fork struggle with record high commodity prices, we believe it is EPA's duty to grant a waiver for the applicable volume of corn ethanol required by the RFS.

We stand ready to assist you in ensuring that consumers of U.S. food, beverage and consumer products have access to an abundant and affordable supply. Thank you for the immediate consideration and action on our request.

American Bakers Association American Beverage Association American Dairy Products Institute American Feed Industry Association American Frozen Food Institute Associated New York State Food Processors Association for Dressings and Sauces California League of Food Processors Canned Food Alliance Food Marketing Institute Grocery Manufacturers Association Independent Bakers Association International Dairy Foods Association Maine Food Producers Alliance Michigan Food Processors Association Midwest Food Processors Association National Association of Margarine Manufacturers National Council of Chain Restaurants National Confectioners Association National Fisheries Institute National Frozen Pizza Institute National Restaurant Association Northwest Food Processors Association Ozark Food Processors Association Seafood Products Association Snack Food Association Texas Food Processors Association