A new economic study shows the Renewable Fuel Standard has added a third to the price of corn and saved the U.S. nearly 18-billion in gasoline costs. The Iowa State University study to be published soon in the American Journal of Agricultural Economics shows specific benefits to farmers, consumers, and the environment. Renewable Fuels Association President Bob Dinneen says the study model showed a more than 14-billion-dollar direct benefit to the farm sector.
“Nearly $6,800 per American farm. And without the RFS, the model that they use on corn prices, would have averaged just $2.65 per bushel in 2015, far below the cost of production.”
He said that would save taxpayers on increased farm program costs, and consumers are also saving
“The U.S. economy benefited because, because the gasoline expenses, gasoline prices, were reduced by some $17.8 billion. Take it down to what you pay, gasoline prices were 18 cents per gallon lower, or 9.5% lower, because of the RFS.”
The Iowa State study model also found that the optimal amount of ethanol blending in the near term is almost 17-billion gallons, or a blend rate of nearly 12%, which would drive gas prices down by an estimated 14%.
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