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US agriculture organizations support bill to end California ethanol subsidies

A California Assembly bill, AB 523, has been introduced that would end state ethanol subsidies; organizations such as the California Poultry Federation and Western United Dairymen have given their support.
Written April 22, 2011

Subsidies are affecting corn prices, state agriculture industry, say groups

A bill that would end California subsidies for the production of corn-based ethanol has gained support from twenty-two U.S. agricultural and business organizations, including the California Poultry Federation and Western United Dairymen.

In a statement to the California Assembly, the agricultural groups asked legislators to consider the following:

  • Increased demand and competition for corn resulting from growth in corn-based ethanol production has driven up the price of corn to over $7 per bushel, more than doubling in price from just last year;
  • Higher corn prices directly impact California families through higher food prices. Corn is a basic ingredient in thousands of food items and rising prices affects families of all income levels, particularly low income households;
  • Rapidly rising corn prices are having a highly detrimental effect on undeveloped and developing countries and exacerbating world hunger; and
  • California poultry, dairy and cattle producers, heavily impacted by the cost of feed, are being decimated by the run-up in corn prices. These businesses have seen multi-million dollar increases in weekly feed costs over the previous year and costs are continuing to rise. Collectively, these industries provide more than 500,000 California jobs and face financial ruin. 

As of April 26, the Assembly bill, AB 523, was re-referred to the Assembly Committee on Transportation.

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