The extreme heat wilting crop harvests across the U.S. is exerting a “big” toll on input prices, the chief executive of Sunny Delight told CNBC Wednesday, issuing a call for the government to suspend mandates that divert corn into biofuels.
Costs to the company and consumers “are going up quite a bit,” William “Billy” Cyr, president and CEO of Sunny Delight, warned on CNBC’s “Street Signs.” “The impact of this drought is big, it happened incredibly quickly, and the impact of it is going to be around for quite some time.”
Cyr pointed to ethanol mandates passed in Congress seven years ago as part of the problem. With corn harvests at historical lows, Cyr called for the government to issue a moratorium on rules governing the use of renewable fuels.
“That made a lot of sense back when Congress put that mandate in place back in 2005,” Cyr said. “But we’re in the middle of the worst drought in 50 years right now, and we have a very weak economy,” meaning that the Environmental Protection Agency should consider waiving ethanol mandates.
“Get rid of the ethanol mandate, at least for the short term, in this time period where we have a drought and a very short supply of corn,” Cyr said. “That would bring down the price of corn that consumers have to pay.”
He said Sunny Delight has been forced to raise prices in the face of rising corn costs this year, and could not rule out another increase next year. “The reality is it’s a significant cost increase, and it really doesn’t have to be that way.”