Tallying Economic Effects of the RFS Decade

Look no further than how falling commodity prices have affected rural America in recent years, and you'll get a feel for what the Renewable Fuel Standard has meant to the countryside. Back in 2005 when the first RFS was signed into law, it was challenging just to keep up on the seemingly endless number of announced plans to build corn ethanol plants. Investor groups made public announcements, followed by local, small-town meetings attended largely by farmers and community investors curious about ethanol's economic potential.Today, the farm economy continues on a decline as input costs have remained higher while corn remains priced in the $3 to $4 range. Imagine the state of things without the corn market created by ethanol.Prior to the first RFS from 1997 to 2004, average corn prices nationally averaged between $1.86 and $2.60 per bushel, according to farmdoc at the University of Illinois. From 2006 to 2016, farmdoc said the average annual corn price ranged from $1.96 to $6.67. That meant more money was injected into rural economies following the passage of the second RFS.Do the math: take away the ethanol market and rural America's challenges may be far more difficult.A nine-page analysis by the Renewable Fuels Association released this week provides a look at the numbers.