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A new U.S. Department of Agriculture report indicates the U.S. farm economy will benefit greatly from the nationwide Renewable Fuel Standard (RFS) established in the Senate energy bill. The study, commissioned by Iowa Sen. Tom Harkin, shows the RFS will increase farm incomes by $700 million, decrease the trade deficit by $4.45 billion and provide 13,500 new jobs by 2011.

Harkin asked USDA to study the impact the RFS provision would have on commodity markets, farm income and employment. The analysis found the provision will lead to increased demand for ethanol and soybean-oil biodiesel and that the legislation would likely generate significant economic benefits to U.S. farmers. The study found corn prices would increase about 13 cents per bushel, or 5 percent, by 2011. Soybean prices would also increase as much as 13 percent during the same period.

Along with the economic analysis, USDA recently released a study on the energy efficiency of ethanol production. AFBF energy specialist Mark Maslyn says the report shows ethanol production yields 34 percent more energy than it consumes. That’s up from 24 percent in 1995.

Maslyn thinks these studies showing both the economic and energy benefits of ethanol should help Farm Bureau’s efforts to keep a strong renewable fuels component in the energy bill currently being discussed in conference. Maslyn said, “It’s certainly our hope that this conference committee will complete its work in resolving the many issues and disputes in the energy bill. It’s our hope they’ll resolve those issues and report a bill before they go home for the elections.”

OFBF members are encouraged to contact their lawmakers and ask for their support of the RFS provisions of the energy bill.