Ethanol

US House Passes Bill Allowing Year-Round Sales of E15 Gasoline

Thu, 14 May 2026 16:40:34 GMT

The U.S. House passed legislation on Wednesday that would allow nationwide year‑round sales of gasoline containing 15% ethanol, handing a major win to biofuel producers and farm groups while raising concerns among refiners about higher compliance costs.

The H.R. 1346 bill , or the Nationwide Consumer and Fuel Retailer Choice Act, approved by a vote of 218 to 203, would permit fuel retailers to offer E15 year‑round, removing seasonal restrictions linked to smog concerns.

The legislation would need to pass the Senate, where it needs 60% of votes, and get a signature from President Donald Trump to be enacted.

Supporters say allowing year-round E15 sales would expand biofuel demand and help lower fuel prices that have spiked since the start of the Iran war. Critics argue it risks raising costs for refiners already facing higher compliance burdens under federal biofuel mandates.

Some lawmakers have also raised fiscal concerns, with Representative James McGovern, a Massachusetts Democrat, saying the measure will add billions to U.S. debt.

The Congressional Budget Office estimates the bill would increase direct spending by $2.7 billion while raising revenues by $0.4 billion, resulting in a net deficit increase of about $2.3 billion between 2026 and 2036, based on an assumption that the legislation would take effect in August 2026.

High fuel prices due to the closure of the Strait of Hormuz, conduit for a fifth of global oil and liquefied natural gas supplies, have become a major vulnerability for President Donald Trump and his Republican party ahead of the November midterm elections.

(Reporting by Siddharth Cavale in New York; Editing by Sonali Paul)

Trump Confirms Support for Year-Round E-15 Deal

Wed, 28 Jan 2026 15:48:12 GMT

President Donald Trump made a planned visit to Iowa — his first since July 2025 — on Tuesday, focusing on affordability, saying Iowa families are “winning” again under his leadership. Standing in front of a packed crowd in Clive, Iowa, with signs posted on the stage and scattered throughout the crowd that said “lower prices” and “bigger paychecks,” the visit unofficially kicked off the midterm elections where costs for consumers are expected to be one of the main political talking points.

While in Iowa, President Trump highlighted what the White House calls improving economic conditions for Iowa families, pointing to lower fuel prices, tax savings and agriculture-driven growth as signs the state is “winning again.” The President touted all the trade wins, including China buying soybeans and the EU agreeing to buy U.S. ethanol. He says by removing those trade barriers, exports are starting to flow to countries that had stopped buying U.S. ag goods before he took office.

But the reality is agriculture is at a crossroads, especially on the row crop side. Even with the recent trade deals, current economic pressures are creating a crisis in agriculture. Trump did briefly mention that crisis, blaming it on former President Joe Biden.

Trump Pushes Year-Round E15 During Iowa Visit

During his speech in Iowa, President Trump reaffirmed his campaign promise to support year-round E15, signaling a major win for corn growers and the ethanol industry.

“But I’m also working hard to expand your markets domestically,” Trump says. “In the campaign, I promised to support E15 all year round. I did. E15 all year round if I get elected, and I want to let you know, we’ll start right now.”

The statement sparked applause as Trump emphasized that efforts are underway in Congress to finalize approval, calling on House Speaker Mike Johnson and Senate Leader John Thune to deliver a deal that benefits farmers, consumers, and refiners, including small and mid-sized operations.

“I’m trusting Speaker Mike Johnson, who’s great, and Leader John Thune, who’s great, to find a deal that works. They’re very close to getting it done,” he says. “And I will sign it without delay.”

The president framed year-round E15 as a key part of his broader strategy to expand markets for U.S. corn, support rural communities, and strengthen domestic energy production.

🚨 BREAKING: President Trump announces Congress is actively working on a deal to allow E15 ALL YEAR ROUND that works for farmers, consumers, & refiners.

"Congress is working on a deal, and when they send it to my desk — I will sign it without delay."pic.twitter.com/TOpo3VUDI4
— The White House (@WhiteHouse) January 27, 2026

Trump Highlights “Historic Turnaround” for U.S. Manufacturing, Touts Deere’s Stock Hitting All-Time High

During his Iowa visit, President Trump touted what he called a historic one-year economic turnaround, pointing to manufacturing growth and new investments across the country.

“And America is respected all over the world like they’ve never been respected,” Trump says. “I thought it would take us two years. This has been the most dramatic one-year turnaround of any country in history in terms of the speed.”

Trump spotlighted John Deere as an example of American manufacturing success. He welcomed the company’s chairman at the event and praised the expansion of production facilities, including what he called two massive new plants.

“You’re opening one in North Carolina, one someplace else, and then you’re expanding all over the place. You’re doing a great job,” he says. “I bought a lot of John Deere stuff. Great country, great company, it’s an honor to have you here.”

The president attributed much of the growth to tariffs and economic policies aimed at attracting investment back to the U.S.

“It is because of tariffs and it is also because of the fact that we had such a tremendous November 5th. That November 5 brought spirit back to our country,” Trump says.

Trump then said that proof in the growth is in the stock market’s performance, including Deere stock hitting an all-time high of 529.51 on January 21, 2026.

But with strains in the farm economy, farm equipment sales saw a steep decline in 2025. Deere and Company, which has a large footprint in the Quad Cities and Des Moines, has laid off over 3,500 employees since October 2023. That downsizing, which the company says is driven by decreasing demand and lower sales, has hit the company’s manufacturing facilities hard, including locations in Waterloo and Ankeny.

John Deere Expands U.S. Manufacturing with Two New Facilities

President Trump highlighted John Deere’s plans to open two major U.S. facilities, marking a significant boost for American manufacturing and rural jobs. The president saying Deere’s decision was due to tariffs.

After the president’s remarks, the company sent out a press release, with John Deere announcing a major expansion with two new U.S. facilities coming soon to the U.S .

Dere says it will build:

A state-of-the-art distribution center near Hebron, Indiana, and a $70 million excavator factory in Kernersville, North Carolina, both set to open within the next year.
The North Carolina factory will bring excavator production back from Japan to the U.S., making John Deere the top domestic producer of excavators.

Together, Deere says the projects are expected to create hundreds of new American jobs, strengthen local economies, and advance John Deere’s commitment to $20 billion in U.S. manufacturing investments over the next decade.

John Deere executives emphasized the expansion as a continuation of their mission to “build America”, enhance innovation, and support the nation’s agriculture, construction, and manufacturing sectors.

The Strong Push for E15 to Help Turn The Ag Economy Around

As corn growers pressed for year-round E15 ahead of the president’s visit, ethanol advocates say the issue is no longer about executive action. It’s about Congress finishing the job.

Emily Skor, CEO of Growth Energy, says the Trump administration has already taken every step available to it through regulatory action.

Leading into Tuesday’s talk, biofuels leaders pushed for the president to focus on E15, saying rural America’s financial stress is colliding with a narrow policy window to get things like E15 done, and that could generate more demand, quickly changing the outlook for corn and soybean growers.

“What we hear from the team around the president is he did what he could,” Skor told Chip Flory during “AgriTalk” on Tuesday. “He issued an executive order. EPA gave us the summer waivers for last summer. We all know that what we need right now is an act of Congress.”

Skor says the White House wants lawmakers to deliver a bill that can be signed into law and end the seasonal E15 debate for good.

“The conversation has to be ‘Congress, do your job,’” she says. “The White House wants to see Congress get something done so they can bring a bill to his desk, so he can sign it and we can be done with this once and for all.”

That urgency is being echoed across agriculture, she says.

“I’ve got CEOs of all kinds of agriculture trade groups calling me saying: ‘What can we do to be helpful? We’ve got to get this done,’” Skor says. “All of agriculture is supportive of this.”

Iowa’s Reality: Corn Prices Below Cost of Production

Ahead of Trump’s second visit to Iowa in less than a year, corn growers and renewable fuels advocates used the moment to renew pressure for nationwide, year-round access to E15. Corn groups say the timing is critical, as lawmakers continue to stall on permanent E15 access despite strong Midwestern support. To make the push even more visible, Iowa Corn and the Iowa Renewable Fuels Association (IRFA) released an open letter on Tuesday , thanking the president for his past support of E15 and urging him to help push the policy across the finish line in Congress, while also running a full-page ad in Tuesday’s “Des Moines Register”.

ICGA and @iowafuel today released an open letter thanking @POTUS for his constant support of nationwide, year-round #E15 and asking for his help to finally push E15 access through Congress @realDonaldTrump pic.twitter.com/cxACXijKMN
— Iowa Corn (@iowa_corn) January 26, 2026

According to the letter, corn growers across the country, and especially in Iowa, are struggling as prices remain well below the cost of production. That pressure, they say, is rippling through the broader state economy.

The groups cite recent data from the Philadelphia Federal Reserve Bank, which ranked Iowa 50th among states for economic growth. They say expanding E15 is one of the fastest ways to reverse that trend.

“The best way to boost corn prices and create meaningful market demand is the immediate authorization of nationwide, year-round E15,” the letter states.

After Trump’s announcement on Tuesday, saying a deal is close, Iowa Corn Growers Association Vice President and farmer from Knoxville, Iowa, Steve Kuiper, expressed Iowa Corn’s appreciation, while highlighting what this could mean for farmers at a critical time.

“Iowa’s corn growers appreciate President Trump shining light on E15 and recognizing the weight this legislation holds to us as corn growers. Farmers are struggling with low commodity prices, high input costs and lack of markets. Passage of year-round E15 is the lifeline many of us need to be able to continue farming,” says Kuiper. “A recent study by Iowa Corn and the Iowa Renewable Fuels Association shared the positive effects year-round E15 would mean for corn growers. This is a goal we have been working towards for over a decade and getting this issue to the president’s desk and across the finish line is a win we all desperately need. The fact that the President sees this problem and promises a solution is coming is very encouraging and valued by us as farmers.”

Fun fact: today when @realDonaldTrump referenced supporting year-round E15 on the campaign trail, that started on January 19, 2016 at the Iowa Renewable Fuels Summit, where he was a speaker.

The next Summit is on February 5th and is FREE and open to the public. You might want to… https://t.co/g0G57UWrbF
— Iowa Renewable Fuels Association (@iowafuel) January 28, 2026

Leading up to today’s statements by Trump, both Iowa Corn and Iowa Renewable Fuels reminded the Trump administration that year-round E15 would immediately expand domestic demand for corn at a time when farmers are under intense financial pressure. Even with the latest round of financial aid through the Farmer Bridge Assistance Program payments, 92% of agricultural economists surveyed in Farm Journal’s December Ag Economists’ Monthly Monitor said the row crop side of agriculture is in a recession. More than 90% said that will accelerate consolidation in agriculture — something Iowa agriculture is seeing firsthand.

Biofuels Seen as Economic Pressure Point and Opportunity

Kurt Kovarik, vice president of federal affairs at Clean Fuels Alliance America, appeared on “AgriTalk” before Trump’s talk on Tuesday. He says the group sent a letter to the president earlier this week urging the administration to focus on two immediate policy opportunities.

“We’re excited to see him head to Iowa,” Kovarik says. “We were briefed that the purpose of the conversation was to highlight economic opportunity, perhaps domestic energy dominance.”

Kovarik says Clean Fuels asked the administration to spotlight progress on renewable fuels, particularly finalizing renewable volume obligations under the Renewable Fuel Standard and issuing long-awaited guidance on the 45Z clean fuel production tax credit.

“I’m sure you’ve had a lot of conversations around E15 — that’s in the hands of Congress,” he says. “So, what we want to do is highlight for the president the EPA’s efforts to finalize the renewable volume obligations under the RFS as an opportunity to provide market certainty and growth for our industry, as well as finalizing the 45Z clean fuel production tax credit guidance, which we do not yet have.”

That certainty, Kovarik says, has been missing, and the consequences have been felt across rural America.

“Our industry had a really, really tough 2025,” he says. “Following a really great ’24, ’25 was really poor, as it was along the farm economy.”

He says the downturn wasn’t driven by demand alone, but by uncertainty around federal policy.

“It was a lack of profit, lack of margin, which meant reduced capacity,” Kovarik says. “In fact, we’ve had a lot of plants idling.”

After producing more than 5 billion gallons of clean fuels domestically in 2024, Kovarik says output dropped sharply in 2025. Plants across the industry operated at just 60% to 70% of capacity.

“In some cases that may be a plant dialing back to 80%,” he says. “In a lot of cases, particularly the smaller plants, maybe in Iowa, those that don’t produce their own feedstock came offline entirely.”

But it’s not just corn at a crossroads. He says that slowdown directly affects farm demand, especially for soybean oil.

“If our industry got those two things in the near term, we would flip around this industry nearly immediately,” Kovarik says. “Turn these plants back on, buy more soybean oil, add value to the soybean farmer and get this fuel to the consumer.”

Kovarik points to renewable volume obligations as a key pressure point. Under the Biden administration’s final three-year RFS rule, biomass-based diesel volumes for 2025 were set at 3.35 billion gallons — well below what the industry was capable of producing.

“We produced over 5 billion gallons in 2024,” he says. “So, that’s part of the reason our industry had a tough year.”

Looking ahead, Clean Fuels, petroleum refiners and agriculture groups asked EPA to raise 2026 volumes to 5.25 billion gallons. EPA’s proposal came in even higher.

“EPA actually proposed an estimate around 5.6 billion gallons,” Kovarik says. “They were even above ours.”

If final numbers land near that range, Kovarik says it would send a powerful market signal.

“Our feeling is if it comes down anywhere in the neighborhood between what we asked and what EPA proposed, it’s going to be a very, very strong market signal,” he says.

Timing matters, too. Kovarik says EPA has indicated the rule could be finalized soon.

“Our expectation is EPA is committed to have it done within the first quarter of 2026 — that means the end of March,” he says. “Hopefully early- to mid-March.”

As corn growers push for year-round E15 and broader biofuels support during Trump’s Iowa visit, Kovarik says optimism is returning, even after a difficult year.

“Although most folks are really feeling bad about how ’25 was, they’re also very optimistic about 2026,” he says. “Because of what we feel we’re on the cusp of.”

Corn Growers Disgusted as Congress Leaves E15 Out of Government Spending Bills

Just last week, E15 and corn groups were dealt a blow. That’s because year-round E15 was left out of the latest spending package , something corn and renewable fuels groups had been pushing to get included in the latest bill.

When asked how year-round E15 failed to advance earlier this year, Skor points to political realities inside the House.

“Parochial politics,” Skor said on AgriTalk Tuesday. “It’s incredibly frustrating.”

Despite broad ag support and mounting corn supplies, Skor says narrow vote margins and competing interests stalled progress.

“We have been a chorus saying, ‘We want markets, not handouts. We want markets,’” she says. “Look at how much corn we’ve grown in the U.S. We need to find markets.”

Skor says House leadership ultimately pulled the issue from budget negotiations due to concerns over securing enough votes, particularly from members tied to small refinery interests.

“He knew that he could not get the votes he needed to pass the budget,” she says. “So he said, ‘We’re going to table this. We’re going to create a council. We’re going to deal with this separately.’ And that’s what happened.”

Looking ahead, Skor says attaching year-round E15 to a must-pass spending bill remains possible, but unlikely in the near term.

“I’m never going to say never,” she says. “But I think the realistic, immediate path for us is trusting our champions.”

She points to Rep. Randy Feenstra of Iowa as a key leader on biofuels policy.

“He’s fantastic on our issues,” Skor says. “He proved to be very, very strong in advocating for the Clean Fuel Production Tax Credit, 45Z.”

Skor says biofuels groups are now unified behind a legislative compromise that protects liquid fuels while expanding growth opportunities for American ethanol.

“We have the vast majority of liquid fuels united behind a legislative proposal,” she says. “We’ve done a really good job coming up with a compromise that has a future for liquid fuels and growth opportunities for American biofuels.”

As farmers look for demand-side solutions amid tight margins and large corn supplies, Skor says the message to Washington during Trump’s Iowa visit is straightforward: permanent E15 isn’t a wish list item. It’s a market fix agriculture needs now.

In the letter Iowa Corn and IRFA sent this week, both also pointed to Congress’ decision to sidestep E15 language in recent spending bills, instead creating a task force to study the issue. That task force, which is co-chaired by Feenstra, is scheduled to take action by February 28.

“Without permanent access to this market, the long-term viability of our state’s largest economic driver is at serious risk,” the groups wrote. “Today, we are asking for your help to finally push E15 access through Congress.”

It’s that same sentiment that was relayed in a statement from National Corn Growers Association (NCGA) president Jed Bower last week, who said corn growers “were disgusted, disappointed and disillusioned” after spending years of calling on Congress to pass E15.

“I met with Speaker Johnson back in November. He said he was frustrated because DOGE had pulled this out last year. He said he would get something done, and here we are again,” said the Ohio farmer. “The same thing we get all the time. Let’s step on and push on the farmers because there’s not very many of them and we can get away with it.”

Small Refiners Still a Roadblock to Year-Round E15

Even with support from major oil groups, Skor says a small group of refiners continues to wield outsized influence in Washington — enough to stall year-round E15 despite broad backing from agriculture and much of the energy sector.

“Well, enough that they could hamstring the speaker and they could hold up the votes on the budget,” Skor says, responding to questions about whether small refiners still carry weight in Congress.

Skor says the current proposal on the table represents a significant compromise, one she believes should be moving now.

“Let’s get year-round E15. Let’s reform the small refinery program so fewer refiners get it and we have more clarity,” she says. “We are supportive of that.”

She argues the small refinery exemption program has been abused, pointing to a growing number of legal challenges.

“There are over 15 lawsuits that have been filed in 2025 because of these small refiners. They’re greedy,” Skor says. “They’re whiny. They claim and allege hardship, and then they get on investor calls and talk about all the money they made in the quarter. You can’t have it both ways.”

Skor says the ethanol industry and its allies are now focused on exposing what she calls that hypocrisy while maintaining pressure on lawmakers.

“We have a very strong coalition now that should win the day,” she says.

Corn Growers Argue E15 Is a ‘No-Cost’ Solution

Iowa Corn and IRFA frame E15 as both an economic and regulatory fix, calling the current restrictions outdated and unnecessary.

“Removing the outdated regulatory hurdle for E15 is exactly the type of government efficiency you’ve worked for,” the groups wrote, urging Trump to continue applying pressure as Congress debates the issue over the coming weeks.

They also emphasize permanent E15 access would come at no cost to taxpayers, while strengthening American energy dominance and providing a critical lifeline to corn producers.

“Permanent nationwide access to E15 is a common-sense, no-cost solution,” the letter sent earlier this week concludes. “Now is the time.”

With the task force deadline looming and the president back in Iowa, corn growers hope the renewed push will translate into action and finally deliver year-round E15 access they’ve been seeking for more than a decade.

Trump Defends Tariffs, Says Farmers Will Be “Biggest Beneficiary”

Ahead of his Iowa talk, President Trump made an appearance at the Machine Shed restaurant in Urbandale, where he had an exclusive interview with Fox News. During that interview, Trump strongly defended his use of tariffs, calling them “indispensable” to economic growth and long-term benefits for farmers.

“Tariffs have been indispensable toward success,” Trump says. “We’ve taken in $600 billion in tariffs.”

Trump says some of that revenue has already been directed back to agriculture, including the Farmer Bridge program payments, which are scheduled to be in farmers’ bank accounts by the end of February.

“I gave the farmers $12 billion last week and took them out of tariff money,” he says.

When asked about concerns from Iowa farmers who worry tariffs could hurt exports and commodity prices, Trump says the benefits will take time to materialize.

“It’s going to take a little while to kick in,” he says. “But I think the farmers are going to be the biggest beneficiary.”

Trump points to protections against foreign crops being sold into the U.S. at below-market prices.

“When you used to have people coming in and dumping their crops into the United States, you guys were hurt,” he says. “They’re not allowed to do that because we’re tariffing those crops.”

He also draws parallels to his first-term trade battles, particularly with China.

“The farmers stuck with me the first time, and I was right,” Trump says. “We gave them $28 billion then. Now we gave them $12 billion, sort of a minimal payment.”

While acknowledging legal challenges could arise as the Trump administration awaits the Supreme Court’s ruling, Trump still signaled tariffs, or similar tools, will remain part of his strategy.

“If the Supreme Court strikes down the tariffs, we will find something — some other way of doing a similar thing,” he says. “But it’ll be more inconvenient.”

As Trump delivers his message in Iowa, tariffs remain a flashpoint for rural America, balancing promises of long-term protection with near-term uncertainty for farmers navigating tight margins and volatile markets.

Exclusive Op-Ed: American Farmers and Ranchers Win With U.K. Trade Deal

Fri, 09 May 2025 18:06:30 GMT

By Brooke L. Rollins, 33rd Secretary of Agriculture

President Trump has done it again. Yesterday’s historic trade deal with the United Kingdom, announced on the 80th anniversary of Victory Day for World War II, is a major victory for American producers, consumers, and, above all, American farmers and ranchers.

What became an imbalanced trade relationship between us and the U.K. did not develop by accident. Before yesterday’s deal, the weakened position of American farmers emerged through a combination of three factors:

The average tariff imposed on American agricultural producers by the U.K. has been 9.2% while our average tariff has been 5%.
The U.K. imposed other non-tariff barriers that limited American access to British markets such as limited quota limits, geographical indicators, irregular inspections, and arbitrary health, animal welfare, or environmental concerns not backed by science or data.
The previous administration did our farmers and ranchers no favors by refusing to institute a new deal with any country, including the U.K.

Yesterday’s announcement reverses course and gives American farmers a fair shot at competing in British markets, creating a $5 billion opportunity for new exports for U.S. stakeholders, including U.S. farmers, ranchers, and producers.

While our team finalizes the trade deal, we are working hard to eliminate U.K. tariffs from all agricultural products. The deal secures a decrease from 19% to 0% in the U.K.’s ethanol tariff, offering an opportunity for corn farmers in states such as Iowa and Nebraska to further expand this important, second-largest market for U.S. ethanol. British energy users will likewise benefit from additional homegrown biofuel produced here in the U.S. This week’s trade deal offers our corn and ethanol producers the opportunity to export $700 million in product to a market that was previously closed to them.

Cattle ranchers also have cause for celebration. Beef produced by American ranchers in states like Texas, Oklahoma, and Kansas is the best in the world, and British consumers will now have access to a product that is the envy of the world. This trade deal creates the opportunity for our cattle ranchers to export millions more, which will end up in the pockets of American ranchers who saw a global trade surplus in beef during President Trump’s first term crash to a deficit under the previous administration.

Our rice farmers in states such as Arkansas and Louisiana will also see increased production because of this deal. Consumers in the U.K., which does not grow rice, will now have access to nutritious rice grown in American fields, creating a market potential of $100 million with free access.

We at USDA will not let this moment pass without energetic promotion of our products to British markets. My team and I are traveling to the U.K. next week to share the bounty of American agriculture to a market that is now open to our products. The trade deal announced yesterday commits our two countries to work together to enhance agricultural market access, closes loopholes, and fast-tracks customs procedures for U.S. exports.

The U.K. is the sixth-largest economy in the world and the fourth-largest to which we export. This week’s trade deal is a momentous step forward in our relationship with the U.K. and for the American agricultural industry. During my trip next week, I will stand ready to collaborate with our counterparts in the U.K. and ensure British consumers know American farmers and ranchers are open for business.

USDA Prepares to Protect Farmers in a Trade War

Wed, 05 Mar 2025 01:44:43 GMT

As the clock struck midnight on March 4, President Donald Trump’s new tariffs on imports from Canada, Mexico and China went into effect. Almost immediately, global markets started to react, and trading partners retaliated.

While the full economic consequences of the trade war remain to be seen, Secretary of Agriculture Brooke Rollins has promised to have a plan, such as the Market Facilitation Program (MFP), ready for farmers, if needed. In 2019, MFP provided direct payments to producers impacted by retaliatory tariffs, resulting in the loss of traditional exports.

“Everything is on the table right now. Everything. I know that President Trump, whom I speak with regularly, realizes the state of the farm economy in this country,” Rollins said on Sunday at Commodity Classic . “The last time, I know, he pushed Secretary Perdue to ensure we were able to make whole–as best as we could–some of those, and hopefully most of those, if not all, who had been hurt. We’re building the team at USDA to ensure we have the structure and the plan in place to allow us to move very quickly.”

In an interview with Farm Journal at Commodity Classic, USDA Economist Seth Meyer says he has been instructed by Secretary Rollins to be ready for a relief program, and he’s started calculating what possible relief could look like.

“Calculating something right today would not be helpful because we don’t know where we’re going to be, but absolutely, the Secretary instructs: ‘You need to be ready, have your pencil sharpened and have your tools available. Think about how you would proceed,’” Meyer says. “We are ready in that backstop. It won’t be easy. We’ve talked a lot about different countries. We’ve talked about reciprocal trade, but we are indeed sharpening our pencils to be able to do what she’s asked us to do.”

Here are the key details of the U.S. tariffs and retaliation from Canada, Mexico and China.

(Farm Journal)

Canada responded swiftly with plans to impose 25% tariffs on nearly $100 billion of U.S. imports over two tranches. Mexican President Claudia Sheinbaum plans to announce retaliatory tariff and non-tariff measures against the U.S. at an upcoming rally in Mexico City’s central square.

Meyer’s question is, “Can Mexico afford to retaliate?”

(Farm Journal)

As President Trump’s tariffs drew swift retaliation from trading partners, the ag industry was quick to react.

Impact on Farm Machinery
Equipment makers are concerned about the additional duties, especially after a rough year for the industry.

“We have spent decades laying down supply chains across the world. Our industry is global — 30% of all equipment made in the U.S. is destined for export. Canada is our largest market outside of the U.S.,” says Johan “Kip” Eideberg, senior vice president – government and industry relations, Association of Equipment Manufacturers (AEM). “If we want to create more jobs here in America, we need to sell more equipment and that means selling to customers outside of the U.S.”

As detailed in From the Factory to Your Fields: Where Farm Equipment Is Made , the ag equipment manufacturing industry is fully integrated across the three North American allies involved in the so-called “trade wars.”

“Anytime you disrupt those tightly connected supply chains — and tariffs would be a direct disruption — it’s going to have a serious impact on equipment manufacturers and on our farmers,” Eineberg says. “Given that Canada is our largest export market, we’re sending almost $10 billion worth of goods to Canada every year, there’s a lot at stake here.”

In 2018, Eineberg estimates, tariffs on steel, aluminum and farm inputs from China drove up the cost of making equipment in the U.S. by about 9 percentage points.

“Obviously, manufacturers will try to absorb as much of that as they can, but inevitably some of it will be passed down to the consumer, which in this case is our farmers and ranchers,” he adds.

AEM is also sounding the alarm on the compounding effect of tariffs, specifically due to the tight integration of manufacturing cycles on both sides of the border. There are often cases, Eineberg says, where components and raw materials are shuttled three to five times across the border between different factories in the manufacturing process. That means each time a piece of steel or other raw material being manufactured into a component for a tractor crosses the border, the tariffs multiply.

An example of the cross-border journey of one piece of agriculture equipment from raw material to delivery on the farm.

(AEM)

Impact on Rural America and Fertilizer
American Farm Bureau President Zippy Duvall expressed alarm about potential harm to farmers resulting from imposing stiff tariffs on the top three agricultural markets by value for the U.S.

“Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation.” Duvall says.

Of note, more than 80% of the U.S. supply of potash , a key fertilizer product, comes from Canada.

“Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,” Duvall adds. “The uncertainty hits just as operating loans are being secured and spring planting approaches, leaving farmers in a tough spot.”

(Farm Journal)

Read: Fertilizer Manufacturers and Retailers React to Trade Tariffs

Impact on Soybeans
During the 2018 trade war with China, U.S. agriculture experienced more than $27 billion in losses, with soybeans accounting for 71% of those losses, according to the American Soybean Association (ASA). Unlike in 2018, farmers are in a more tentative financial situation in 2025. Commodity prices are down nearly 50% from three years ago, while the costs for land and inputs, such as seed, pesticides and fertilizer, are high.

In an ASA statement, it says for years the organization’s farmer-members have consistently maintained their position that they do not support the use of tariffs, which threaten important markets and raise input costs for farmers, as a negotiation tactic.

“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with. Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently,” says Caleb Ragland, ASA president and soybean farmer from Magnolia, Ky.

Soybeans by far make up the largest volume of ag products exported to China. In 2024, U.S. exporters sent 27 million metric tons of soybeans to China valued at $12.76 billion, according to USDA. Mexico is the second-largest customer for whole soybeans, soybean meal and soybean oil. Canada is the fourth-largest customer for soybean meal.

“Soybean producers face huge, disproportionate impacts from trade flow disruptions, particularly to China,” Ragland says. “And we know foreign soybean producers in Brazil and other countries are expecting abundant crops this year and are primed to meet any demand stemming from a renewed U.S.-China trade war.”

Impact on Corn and Ethanol Demand
Market analysis shows tariffs won’t solve the U.S. trade deficit and instead will just shift business to other countries, says Neil Caskey, CEO, National Corn Growers Association (NCGA).

“We issued a study back in the fall that documented the implications of tariffs and specifically retaliation in a trade war — it’s not good for corn farmers, farmers in general,” he says. “We did that in conjunction with the American Soybean Association, and it concluded a trade war is really only good for Brazil, and we hope to avoid that.”

The top two destinations for corn and ethanol are Mexico and Canada. According to Krista Swanson, chief economist, NCGA, 40% of U.S. corn exports go to Mexico and more than 40% of U.S. ethanol exports are shipped to Canada.

“[Corn] is a commodity [those countries] consume way more than what they produce, so they’re going to have to get it from somewhere,” she says. “There’s definitely some concern about losing corn [exports], but how much is lost is left to be seen because it depends on what happens with shifting trade flows.”

Impact on Beef and Pork Sectors
U.S. meat export could be impacted by the tariff war as well, with China singling out pork and beef for a 10% counter tariff. Mexico, China and Canada accounted for 8.4 billion in U.S. red meat exports last year, according to the U.S. Meat Export Federation (USMEF).

USMEF is disappointed no agreements were reached to avoid or postpone the tariffs, but president and CEO Dan Halstrom says just because there are tariffs, doesn’t mean trade will stop.

“I do think the thing that we have definitely in our favor is that demand for our products globally is record breaking. I mean, it’s as good as I’ve ever seen it in 40-plus years,” he says. “I think that we have a very unique product. We got to keep that in mind because that’s a big leverage point.”

Halstrom says it could be a bumpy ride for a while, but it’s not something exporters can’t overcome.

Read: Industry Comments on Retaliatory Tariffs on U.S. Pork and Beef

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:50:09 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

RFK Jr. and Zeldin Comment on How They Would Implement Trump Policy

Thu, 30 Jan 2025 22:46:07 GMT

Robert F. Kennedy Jr.'s confirmation hearing for Secretary of Health and Human Services (HHS) on Wednesday (Jan. 29) before the Senate Finance Committee lasted over three hours, revealing key points:

Vaccine stance: Kennedy attempted to soften his past anti-vaccine rhetoric, stating support for vaccines but struggling to explain previous controversial statements.
Health policy priorities: He emphasized addressing chronic diseases, promoting safe food, removing conflicts of interest in health agencies, and using “gold-standard science.” Kennedy said that federal dollars spent on SNAP and school lunch programs could be one place to start, “helping kids” avoid obesity and chronic illness by cutting out sugary drinks and “ultra-processed foods.” He would also fund federal research into the link between food additives and chronic illnesses, though he didn’t specify which ingredients sparked the most concern. “I don’t want to take food away from anybody,” Kennedy said.
Kennedy emphasized his support for American farmers, stating:
- “American farms are the bedrock of our culture, of our politics, [and] of our national security.”
- He was a “4-H kid” and spent summers working on ranches.
- He wants to work with farmers and food producers to remove burdensome regulations and unleash American ingenuity.
Agricultural practices and health. Kennedy expressed concerns about current agricultural practices:
- He criticized the use of certain chemicals in farming, stating they destroy soil microbiomes and cause erosion.
- He linked chemical-intensive agriculture to health problems, mentioning clusters of cancers, autoimmune diseases, and obesity in farming communities.
- He called for incentivizing transitions to regenerative agriculture and less chemically intensive practices.Kennedy told Sen. Roger Marshall (R-Kan.) that farmers are affected by cancers and autoimmune illnesses that he believes are caused by ingredients like food dyes. “We need to fix our food supply,” Kennedy said, noting that “seeds and chemicals” used by U.S. farmers are “destroying our soil” in the long term. When asked about Kennedy’s “seeds and chemicals” comment, Grassley told Politico: “I’ll have someone from Iowa State University talk to him.”
Collaboration with USDA. Kennedy emphasized his intention to work closely with the Department of Agriculture:
- He stated that MAHA (Make America Healthy Again) “simply cannot succeed without a partnership a full Partnership of American farmers.”
- He committed to working collaboratively with USDA and other federal agencies before implementing policies affecting food supplies.
- Kennedy mentioned that President Trump instructed him to work with Brooke Rollins at USDA to ensure policies support farmers. Rollins told reporters last week that she was supportive of Kennedy’s “Make America Healthy Again” movement. “But what is important and, if confirmed, what my role will be, will be to strike a balance between defending our farmers and our ranchers but also working with Bobby Kennedy, who I adore, to effectuate the president’s vision on all of the above,” Rollins said
Regulatory approach. Kennedy outlined his approach to agricultural regulations:
- He promised to work with farmers to remove burdensome regulations.
- Kennedy acknowledged the “very thin margins” farmers operate on and stated he doesn’t want any farmer to leave their farm for economic or regulatory reasons.
- He agreed that agricultural practice regulations should primarily be left to USDA and EPA.
- “I expect you to leave agricultural practice and regulation to the proper agencies,” Sen. Chuck Grassley (R-Iowa) told Kennedy. That means, for the most part, leaving policies that impact farmers to USDA and EPA, Grassley clarified.
Future of agriculture. Kennedy shared his vision for the future of American agriculture:
- He called for fixing the food supply as a top priority. Sen. James Lankford (R-Okla.) told Kennedy that he was happy the nominee addressed the “social media rumors” about agriculture.
- “You made it very very clear you’re not going to tell Americans what to eat, but you do want Americans to know what they’re eating,” Lankford said, calling that a “pretty fair perspective” on food policy.
- Kennedy advocated for supporting the transition to regenerative and sustainable farming practices.
- He mentioned plans to rewrite regulations to give smaller operators “a break.”
- Throughout the hearing, Kennedy attempted to position himself as an ally to farmers while also advocating for changes in agricultural practices to address health and environmental concerns.
Controversial past: Democrats challenged his history of health misinformation and grasp of Medicare and Medicaid.
Republican support: Some GOP senators backed Kennedy, with Sen. Ron Johnson (R-Wis.) calling him “awesome,” though the final vote remains uncertain.
Financial concerns: His financial ties to lawsuits against Merck raised conflict-of-interest questions.
Abortion stance: Kennedy sidestepped direct answers but aligned with Trump’s anti-abortion policies, shifting from his previous pro-choice stance.

Bottom line: With strong opposition and divided support, Kennedy’s confirmation vote is expected to be closely contested. Today he attends another confirmation hearing before the Senate Health, Education, Labor, and Pensions Committee. The Senate Finance Committee expects to hold its RFK Jr. vote next week.

Zeldin Confirmed as EPA Administrator

On Wednesday (Jan. 29), the Republican-led Senate confirmed former Congressman Lee Zeldin as the new administrator of the Environmental Protection Agency (EPA) in a 56-42 vote. A staunch Trump ally, Zeldin is expected to steer the agency in alignment with the former president’s environmental policies.

Vote breakdown: All 53 Republicans backed Zeldin, joined by three Democrats — Sens. Ruben Gallego (Ariz.), Mark Kelly (Ariz.), and John Fetterman (Pa.).
Policy direction: Zeldin is expected to roll back environmental regulations, emphasizing economic growth and private-sector collaboration.
Biofuel policy. Zeldin has raised concerns among ethanol and biofuel advocates due to his past opposition to the Renewable Fuel Standard (RFS) and ethanol. However, during his confirmation process, Zeldin made some commitments that suggest a potential shift in his stance. As a congressman, Zeldin had a history of opposing biofuels and the RFS. He signed letters expressing concern about proposed RFS volume increases, citing issues with the “E10 blend wall.” In 2017, Zeldin cosponsored an unsuccessful bill to repeal the RFS. He raised concerns about the validity and practicality of higher ethanol blends like E15 and E85. But during his confirmation process, Zeldin made several statements that indicate a potential change in his approach:
- He committed to giving producers and the industry certainty in the marketplace regarding Renewable Volume Obligations (RVOs).
- Zeldin acknowledged the importance of the RFS issue to President Trump and certain senators.
- He stated that no person or industry has any special influence over his decision-making, addressing concerns about his past connections to the oil industry.
Biofuel industry representatives have expressed cautious optimism:
- The Renewable Fuels Association (RFA) looks forward to working with Zeldin on keeping the RFS on track and addressing other priorities like E15 availability.
- The Iowa Renewable Fuels Association (IRFA) encouraged Zeldin to pursue the role biofuels can play in U.S. energy dominance.
- The American Coalition for Ethanol (ACE) appreciated Zeldin’s commitments to follow the law regarding RVO rulemakings and supporting year-round E15 nationwide.

Of note: While Zeldin’s past positions raised initial concerns, his recent statements during the confirmation process suggest he may be open to working with the biofuels industry in his new role as EPA Administrator.

Climate stance: Critics warn his leadership could weaken climate initiatives, favoring fossil fuel interests.
Reactions: Republicans praise his “common-sense regulation” approach, while environmental groups call his confirmation a serious setback for public health and environmental justice.

Bottom line. As Zeldin assumes leadership, his tenure is likely to reshape the EPA’s role in U.S. environmental policy for years to come.

Cassidy Casts Doubt on RFK Jr.’s HHS Nomination

Senate HELP Committee Chair Bill Cassidy (R-La.) delivered a blunt message to Robert F. Kennedy Jr. during Thursday’s hearing, signaling serious concerns about his nomination for Health and Human Services (HHS) secretary.

“I’ve been struggling with your nomination,” Cassidy stated in his closing remarks, a potential roadblock for Kennedy, given Cassidy’s influential position on the Senate Finance Committee. If Cassidy votes against Kennedy in the panel’s decision, the nomination may not advance.

The Louisiana senator expressed deep skepticism about Kennedy’s stance on vaccines, questioning whether he could be trusted to uphold sound public health policy. Cassidy specifically criticized Kennedy’s history of vaccine skepticism, warning that such views could erode trust in essential immunizations.

“A worthy movement, called MAHA, to improve the health of Americans?” Cassidy asked. “Or will it undermine it, always asking for more evidence and never accepting the evidence that is there?”

He also recounted a recent case of two children dying in a Baton Rouge ICU from vaccine-preventable diseases. “My concern is that if there’s any false note, any undermining of a mama’s trust in vaccines, another person will die from a vaccine-preventable disease,” Cassidy warned.

Beyond his own reservations, Cassidy’s remarks signal broader challenges for Kennedy’s nomination. Senate Minority Leader Mitch McConnell (R-Ky.), a childhood polio survivor, is unlikely to back a nominee with anti-vaccine ties. Sens. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) also remain key votes to watch, with both urging Kennedy to support vaccinations.

Cassidy, up for re-election in 2026, has already drawn a Trump-aligned challenger, State Treasurer John Fleming. Though Cassidy emphasized his desire for Trump’s policies to succeed, he warned that anti-vaccine rhetoric could tarnish Trump’s legacy.

“I want President Trump’s policies to succeed,” Cassidy said. “But if there’s someone that is not vaccinated because of policies, of attitudes we bring to the department, and there’s another 18-year-old who dies of a vaccine-preventable disease… The greatest tragedy will be her death. I can also tell you an associated tragedy will be that it will cast a shadow over President Trump’s legacy, which I want to be the absolute best legacy.”

Bottom line: With Cassidy’s support in doubt and broader Senate skepticism, Kennedy’s path to confirmation remains steep.

Key Takeaways from Brooke Rollins' Confirmation Hearing for Agriculture Secretary

Thu, 23 Jan 2025 17:19:55 GMT

Brooke Rollins, President Trump’s nominee for Agriculture Secretary , addressed several issues during her confirmation hearing on Jan. 23 in an attempt to position herself as a supporter of diverse agricultural interests and commit to protecting producers.

In her opening statement, Rollins outlined several key priorities for USDA if confirmed, as is expected:

Rapid deployment of disaster and economic assistance authorized by Congress.
Addressing current animal disease outbreaks.
Modernizing and realigning USDA.
Ensuring long-term prosperity for rural communities.

Ethanol and Renewable Fuel Standard (RFS)

Rollins clarified her stance on ethanol and RFS, distancing herself from past positions of the Texas Public Policy Foundation:

She stated the Foundation’s position on ethanol/RFS was written a decade ago and was one of 900 to 1,000 papers produced annually.
Rollins emphasized she did not author those papers.
While admitting to being a defender of fossil fuels, she insisted she would be “a secretary for all of agriculture” and a “champion for all fuels.”

When asked again on biofuel policy, Rollins said, “Everyone knows where the president is on this.”

The regulatory effort under the first Trump administration to make sales of E15 available year-round, Rollins noted, was not developed by the domestic policy office that she headed but she still said she looked forward to working on the issue ahead. She also committed to working with Treasury secretary-designate Scott Bessent on the 45Z Clean Fuels Production Credit. And she will make sure Bessent has the “data and the voices around him to make the right decisions.”

Tariff Impact Aid for Farmers

During questioning, Committee Chairman John Boozman (R-Ark.) asked Rollins about her approach to working with President Trump’s trade agenda. Rollins responded that she would prioritize working with the White House to address any challenges farmers and ranchers might face under potential tariff implementations.

Rollins committed to supporting farmers in case of tariff-related harm:

She pledged to undertake efforts like the Market Facilitation Program (MFP) via payments from the first Trump administration. MFP was part of a broader effort by USDA to assist farmers impacted by retaliatory tariffs and trade disruptions.
Rollins has consulted with former USDA Secretary Sonny Perdue about the implementation of such programs.

On trade, Rollins committed to using USDA programs and policies to bring the trade deficit in agriculture down to zero. But Sen. Michael Bennet (D-Colo.) countered that things like a stronger dollar and other factors were bigger components of the agriculture trade deficit rather than a failure of USDA policy.

Proposition 12

Rollins committed to working with Sen. Joni Ernst (R-Iowa) and others on addressing Prop 12 as it is affecting several states.

Commitment to Agriculture and Public Service

Rollins emphasized her dedication to the agricultural sector.

“My role is to defend, honor and elevate our entire ag community in the oval office ... to ensure that every decision made has that front of mind,” she states.

Rollins shared a personal detail about her family. She revealed her mother was the oldest freshman in the Texas legislature, highlighting her family’s history of public service.

Bottom line: These statements demonstrate Rollins’ attempt to position herself as a supporter of diverse agricultural interests, including both traditional and renewable fuels, while also showing her commitment to protecting farmers from potential trade-related challenges.

Your Next Read: Trump Taps Texas Native Brooke Rollins for Secretary of Agriculture

Ag Sector Could Score Big in Stopgap Spending

Tue, 17 Dec 2024 19:53:56 GMT

The House of Representatives released its Continuing Resolution (CR) text today, which includes:

A one-year extension of the 2018 farm bill
Around $10 billion in farmer economic aid
$21 billion in ag disaster funding for 2023 and 2024, which is part of the $100.4 billion to help the hurricane-stricken Southeast
Year-round E15 sales, which is a major victory for the corn and ethanol industries

The plan will offer credits to small refiners that petitioned for exemptions from the Renewable Fuel Standard (RFS) mandates (2016 to 2018 compliance years) but were denied or had pending petitions as of Dec. 1, 2022. The RFS requires refiners to blend biofuels such as ethanol into gasoline or purchase compliance credits.

The provision would override a previous U.S. government decision allowing year-round E15 sales only in eight Midwestern states (set to begin in 2025).

Extension of Orphan Programs in 2018 Farm Bill
There also appears to be an extension of orphan programs in the 2018 farm bill extension and a permanent 1890s scholarship program. The icing on the cake is a four-year extension of SNAP fraud via the skimming reimbursement language.

Orphan programs are ones that were authorized in the 2018 farm bill but did not have funding beyond a specified year. The extension provides $177 million of new mandatory funding for programs that did not have a budget baseline. This ensures these programs can continue to operate during the extension period.

The 1890s scholarship program provides scholarships for students attending 1890 land-grant universities, which are historically Black colleges and universities that were established under the Second Morrill Act of 1890.

The SNAP Fraud Reimbursement extension is the continuation of reimbursements for stolen Supplemental Nutrition Assistance Program (SNAP) benefits. This provision protects SNAP recipients from losses due to benefit theft via card skimming, cloning and other similar methods. States will continue to be required to replace stolen benefits under this measure.

One source said, “Good policy would be emphasizing the need for states to transition to more secure measures for SNAP recipients, including stronger identity verification practices.”

Of Note
Senate Ag Chairwoman Debbie Stabenow (D-Mich.) did not get her wish to move conservation/climate funding into a one-year extension of the 2018 farm bill. That discussion will occur next year.

Economic Aid and Disaster Funding
Disaster aid for crop losses due to natural disasters for 2023 and 2024 will total $21 billion.

The discussions for economic aid centered on a $10 billion package to help farmers cope with price declines and rising input costs. House Agriculture Chairman GT Thompson (R-Pa.) indicated that $10 billion is the minimum he would accept. He mentioned Republican support for reallocating conservation program funds from the 2022 legislation into the farm bill baseline, but that Republicans are disputing the “guardrails” that require funds to support “climate-smart” projects.

Thompson also noted concerns that some critics want to ensure President-elect Donald Trump would have access to funds to compensate farmers for potential retaliation stemming from new Trump import tariffs.

Year-Round E-15
Year-round sales of E15 ethanol has been a long-standing goal for corn growers and ethanol producers, particularly in states such as Iowa, Illinois and Minnesota where a significant portion of corn production goes into ethanol.

Currently, E15 is available at more than 3,200 gas stations in the U.S., indicating room for growth (there are more than 196,000 fuel stations in the U.S.). About 95% of model year 2024 vehicles are explicitly approved for E15 use by manufacturers.

The actual increase in ethanol usage would likely be gradual as E15 adoption expands. While the theoretical maximum ethanol usage through year-round E15 sales could reach 20,586 million gallons annually, the actual increase would depend on factors such as consumer adoption and infrastructure development — separate fuel handling and storage for E15.

Now What?
A vote in the House won’t happen until at least Thursday night if House Speaker Mike Johnson (R-La.) sticks to his plan to honor the rule giving members 72 hours to review the bill.

Other House Happenings
House Democrats removed Rep. David Scott (D-Ga.) as their senior Agriculture Committee leader after he received just 5 votes in Monday’s influential steering panel vote. Rep. Angie Craig (D-Minn.) emerged as the frontrunner with 34 votes, while Rep. Jim Costa (D-Calif.) trailed with 22 votes. Craig now heads into Tuesday’s full caucus vote, seeking additional support. Craig plans to rally House colleagues for the final vote. Meanwhile, Costa vowed to keep pushing and will try to supplant Craig in the full caucus. Lawmakers had anticipated Scott’s ouster amid growing skepticism of his leadership — Scott has dropped out of the race.

Craig indicated part of her pitch to the panel was that there are no other Ranking Members for Democrats from the U.S. Midwest.

“There’s not a single ranking member from the middle of the country right now, and that was certainly part of my pitch to my colleagues, is that if we want to represent this whole country, then we need ranking members and leaders in the Democratic Party who are from the whole country,” she stated.

Craig came into Congress in 2019 while Costa and Scott were elected in the early 2000s.

GOP Eyes Strategic Appointment to Boost House Majority
Republicans may have found a way to temporarily expand their narrow House majority: appointing a Democrat to the Trump administration. Rep. Jared Moskowitz (D-Fla.) is reportedly being considered to lead the Federal Emergency Management Agency (FEMA) next year. The move would leave Democrats short a vote for weeks, bolster the GOP’s edge, and possibly help Republicans flip Moskowitz’s seat. Moskowitz, who previously served as Florida’s emergency management director under Gov. Ron DeSantis, could gain significant recognition if he pursues a 2026 gubernatorial bid. While his office and House Democratic leadership declined to comment, the appointment’s political ramifications are being closely watched ahead of Monday’s internal party elections.

Take our Poll: Do you think Congress should pass emergency relief for farmers in the CR? You can voice your opinion in our AgWeb poll.

4 Items EPA Discussed this Week that Will Impact Producers

Thu, 20 Apr 2023 18:36:19 GMT

Michael Regan, EPA administrator, appeared before the House Ag Committee on Wednesday to discuss everything from WOTUS to the farm bill. Here are the highlights that will directly impact producers:

1. Year-Round E15

EPA is not yet ready to issue an emergency declaration to allow E15 fuel to be sold during the summer months as they did in 2022. While Regan said that many of the conditions are still in place that prompted the 2022 emergency waiver, he said EPA staff has not yet brought him enough evidence to issue an emergency waiver.

He cautioned that administrative moves by the Trump administration to allow year-round E15 sales did not survive court challenges. But he said no options are off the table as of yet and that EPA was continuing to work with the Department of Energy and others on the situation.

2. Biodiesel Blending Levels

Proposed 2023, 2024 and 2025 Renewable Fuel Standard volumes for biomass-based diesel and advanced volumes do not match the industry’s current production. Regan explained:

“Let me just say that in 2022 we set the highest volumes ever in EPA’s history. So we’re proud of that and what we plan to do is continue that trajectory. As you know we proposed a rule and we’re in that proposal phase and there aren’t too many things that I can comment during this time of comment but what I can say is that 2023, 2024, and 2025 will continue that positive trajectory.”

According to Regan, his team is taking comments from industry stakeholders and have been offered “a lot” of data that Regan believes will be “reflected in the final rule.”

3. The Future of Biofuels

Rep. David Scott (D-Ga.), asked Regan the role he sees biofuels playing in the future. Last week, EPA announced emission standards for new cars. That announcement led to concerns from the biofuels industry and farmers in regard to the administration’s view on the role biofuels have been playing and can continue to play in reducing emissions and powering our cars and trucks.

Regan was asked what he would you say to our farmers and our domestic biofuels industry – the role he sees biofuels playing in the future. His response:

“Well, I think we see a significant role. It’s called walking and chewing gum at the same time. I think that when you look at the policies of this EPA, and the investments that we’re making in biofuels and advanced biofuels, just by the last RVO volumes we set and the ones we’re anticipating setting, and then the partnership that I have with Secretary Vilsack and Secretary Buttigieg as we look at the role of biofuels with aviation fuels, we see a tremendous market for biofuels that is complimentary to the EV fuels future. And so we think that we can do both – we see a balance here. And in both cases, we’re trying to follow the markets, follow technology, and follow the science as well.”

As for the recent EPA proposal which would tighten tailpipe emissions and force more electric vehicles (EVs) to be used, Regan said the plans do not work against biofuels. EPA is working to implement complimentary policies on that front. “We see a tremendous market for biofuels that is complementary to the EV fuels future,” he said.

4. Waters of the U.S. (WOTUS)

Rep. Don Bacon (R-Neb.) said the Waters of the U.S. (WOTUS) rule on wetlands protections and declared, “Any goodwill the administration has built with farmers and ranchers is gone.”

House Ag Chair G.T. Thompson (R-Pa.) mirrored Bacon’s comments.

“Historically, EPA has over-regulated the agriculture industry,” criticizing agency actions on pesticides, electric vehicles, and WOTUS.

The Supreme Court is expected to rule soon on an Idaho case that would restrict federally recognized wetlands to territory with a direct surface connection to a waterway.

Regan said the EPA issued its WOTUS rule last December in the face of “looming litigation” over not having a regulation. Courts have put on hold the recent Biden/EPA rule in 26 states.

Despite “enduring” 4.5 hours in the committee hearing, Regan shows promise in working more in favor of rural America, according to Thompson. He says Regan called him following the meeting to “emphasize how much he wants to do a better job” of working with the House Ag Committee.

Vilsack Focuses on Farm Bill Possibilities with National Sustainable Ag Coalition

Tue, 31 Jan 2023 20:27:48 GMT

USDA Secretary Tom Vilsack on Monday addressed the winter meeting of the NASC, telling members that USDA’s focus has been on developing sustainable food systems through areas like funding an organic transition program and helping farmers turn waste into biofuels.

Vilsack said USDA believes there are more options for farmers other than “get big or get out. There’s got to be a system in which the many and most have a fair shot.”

Read more: Ag Groups File Lawsuit to Challenge EPA’s “Vague” New WOTUS Definition

Vilsack noted the administration’s focus on a “true local regional food system” that he said would be more resilient and less susceptible to foreign conflicts, international trade and production in other countries. He specifically urged state leaders to get more involved.

“Why can’t they invest in value-added opportunities? What’s preventing them from encouraging ecosystem markets in their state? Why aren’t they investing in bio-based product manufacturing and creating opportunities for agricultural waste? How about using some of that money to support local and regional food systems? Maybe they can help with input costs,” Vilsack said.

Read more: Policy and Payments: What Producers Can Expect in 2023

He urged the NSAC members to focus their efforts on educating lawmakers and urged them to push lawmakers to keep expanded funding in place.

“There’s historic money invested in this and there are some people who want to take it away,” he stressed.

Renewable Fuel's Big Week: EPA's RFS Proposal And Year-Round E15 Legislation

Thu, 01 Dec 2022 20:01:51 GMT

EPA, by court order, released renewable fuel blending proposals on Thursday for 2023, 2024 and 2025, as well as information about eRINS for electric vehicles.

The proposed volume requirements come as the agency faced scrutiny on Wednesday and early Thursday for its failure to meet their court-ordered proposal deadline of Nov. 30 in order to finalize by Jun. 14, 2023.

Proposed Volume Targets (billion RINs)

	2023	2024	2025
Cellulosic biofuel	0.72	1.42	2.13
Biomass-based diesel*	2.82	2.89	2.95
Advanced biofuel	5.82	6.62	7.43
Renewable fuel	20.82	21.87	22.68
Supplemental standard	0.25	n/a	n/a

*biomass-based diesel in gallons

“With this proposal, EPA seeks to provide consumers with more options while diversifying our nation’s energy mix,” said Michael Regan, EPA Administrator. “EPA is also focused on strengthening the economics of our critical energy infrastructure, needed to maintain and boost our energy security.”

Regan says his team is “eager” to continue the conversation around the RFS and will do so through public comment.

In replying to EPA’s comment request, the public will offer:

1. How the EPA can better balance the proposed volumes to work for renewable fuel consumers, growers and producers, refiners and workers that operate refining facilities.
2. Ways in which the EPA can “best” support sustainable aviation fuels (SAF) and clean hydrogen.
3. Methods for the EPA to work with domestic oil refining assets and merchant refineries.
4. How to account for incentives offered in the Inflation Reduction Act.
5. Thoughts on qualifying renewable electricity in electric vehicles into the RFS program.

New Regulations in the Works

The electric vehicle proposal in question five is tied to EPA’s latest regulation concept that would “increase U.S. energy security,” according to EPA.

In allowing renewable energy made from renewable biomass into the RFS, EPA says U.S. oil imports would be reduced by 160,000 to 180,000 barrels of oil per year from 2023 to 2025—the length of the proposed rule. The agency says this translates to $200-$223 million in savings each year.

Need for Public Comment

Seth Meyer, USDA chief economist, says these numbers show why the public comment period is “crucial” to the RFS, especially for the ag industry.

“I think for the U.S. biofuels sector, when considering what motor gasoline consumption might be over the next decade, we’re not talking about a growth market by most accounts. We’re talking about a flat to maybe declining market,” says Meyer. “In asking these questions, EPA wants to know how producers can find and contribute to other markets and fuel sectors, like SAF.”

According to Meyer, there tends to be a “big” response to these types of public comment periods. He says agencies often bring in “additional resources” to examine each comment in detail, and get the information tallied in the system.

In Other News

EPA’s RFS news and request for public comment comes as a group of Senators on Wednesday announced bipartisan legislation, the Consumer and Fuel Retailer Choice Act of 2022, that would make E15 blends available year-round.

“We’ve been able to bring critical oil/gas, biofuel, ag, and transportation stakeholders to the table around a common-sense solution,” said Sen. Deb Fischer (R-NE). “With this strong coalition of support, it’s time Congress act to make year-round E15 a reality.”

The U.S. is no stranger to year-round E15, as the Biden administration allowed American’s the option this summer to ease soaring pump prices.

Sen. Chuck Grassley (R-IA) joined AgriTalk Host Chip Flory on Wednesday to break down what sets this bill apart from past ethanol proposals.

“The shocking thing about this bill is that the oil industry supports it because it gives them an opportunity to sell more of their product,” Grassley says.

Grassley believes oil companies also hopped on board with this legislation as:
1. “Several Midwestern governors” having made it clear that E15 will be year-round in their states.
2. Year-round blending will extend the lifetime of liquid fuel availability.

Certainty was Grassley’s biggest concern for the biofuels industry this week. He says he worked to provide that by supporting this E15 legislation, as well as pressuring Regan to “fulfill his promise” for biofuels in the RFS announcement.

More on RFS:

EPA Sends RFS Plans to Next Phase as Nov. Deadline Approaches
EPA’s Small Refinery Exemption Data Under Fire by U.S. Accountability Office

$100 Million Grant to Renewable Fuels Will Bring ‘New Wave of Growth’

Wed, 05 Oct 2022 18:44:12 GMT

Fuel markets began a downward trajectory in late June, with the AAA reporting the U.S.’s average price for regular gas on Tuesday is $3.83, down 49¢ from July.

While fuel prices moved at a rapid pace in 2022, initiatives to alleviate pump prices haven’t moved as fast. One program, however, was finally given the spotlight this week.

The Federal Register published a document on Tuesday that opened the application window for roughly $100 million in grants to “expand” the sale and use of renewable fuels within the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP).

Renewable fuel distribution facilities can now apply for the HBIIP cost-share grants that will aid in converting to higher-blends of:
1. Ethanol—greater than 10%
2. Biodiesel—greater than 5%

Tom Vilsack, USDA secretary, says the funding will strengthen an “important” industry tool to minimize our reliance on other countries.

“Biofuels are homegrown fuels,” Vilsack said. “Expanding the availability of higher-blend fuels is a win for American farmers, the rural economy and hardworking Americans who pay the price here at home when we depend on volatile fuel sources overseas.”

Will the USDA Funds Help?

While HBIIP has a large price tag, will it have an impact? Emily Skor, Growth Energy CEO, says she’s seen fuel grants benefit the renewable industry firsthand.

“We have heard countless success stories from our retail partners about how HBIIP grants have helped them expand options at the pump and bring cleaner, more affordable options to drivers across the nation,” she says. “Today’s announcement reaffirms USDA’s commitment to ensuring a new wave of growth for higher biofuel blends…”

These funds—separate from the $500 million recently enacted through the Inflation Reduction Act —will be used for facility installation, retrofitting and pump upgrades, along with new equipment and buildings.

HBIIP applications will be accepted now through Nov. 21.

More on renewable fuels:
Will the IRA’s Biofuel Provisions Ease Pump Prices? Sen. Ernst Isn’t Convinced
What’s Ag’s Stake in the Senate-Passed Inflation Reduction Act?
New Legislation Could Put E30 on a Pump Near You

EPA Officially Announces the Sale of Year-Round E15

Thu, 22 Sep 2022 04:19:40 GMT

EPA officially issued an emergency waiver on Friday to allow year-round E15, offering Americans the opportunity to purchase ethanol during summer months for the first time since the renewable fuel standard’s inception under the Energy Policy Act in 2005.

In early April, President Biden—ahead of EPA— formally announced the suspension of a federal rule that prohibits the sale of E15 blended biofuels during summer months in hopes of alleviating rising pump prices.

According to EPA, the summer suspension has been banned to counteract Russia’s “unjustified, unprovoked, and unconscionable” war against Ukraine. EPA says it has been working alongside the U.S. Department of Energy to monitor the energy market disruptions and act accordingly.

Keeping Course on the Climate Voyage

Recent reports claim ethanol is generally prohibited during the summer months, due to smog. EPA publicly disagreed with those claims in its announcement on Friday.

“EPA’s research has shown no significant impact on evaporative emissions when the 1-psi waiver is extended to E15,” the agency wrote. “With no significant impacts on emissions from cars and trucks, we expect consumers can continue to use E15 without concern that its use in the summer will impact air quality.”

Andy Randolph, technical director at Earnhardt Children’s Racing, disagrees with smog claims as well, saying “E15 has less smog potential and less volatility than E10.” He says the only ethanol blends we should be wary of are E30 and above, “because the vapor pressure of ethanol-gasoline blends then becomes less than the vapor pressure of straight gasoline.”

Randolph says the highest level of ethanol blends should be E30, as any level higher can cause your car not to start in winter due to low vapor pressure.

More on renewable fuels:

> E15 Summer Ban Suspended, USDA Commits $700M To Biofuels Producers
> Renewable Fuel’s Big Week on The Hill
> Secy. Vilsack: E15 Won’t Inflate Food Prices, ‘There’s Plenty of Corn Here’
> EPA Moves to Deny 36 Small Refinery Exemptions, Extends Olive Branch

New Legislation Could Put E30 on a Pump Near You

Wed, 27 Jul 2022 20:03:08 GMT

The University of Nebraska-Lincoln (UNL) published a study on the use of E30 in non-flex fuel vehicles in February 2021. The study involved 50 non-flex fuel vehicles that used varying levels of octane to show the contrast between ethanol and carbon dioxide emissions.

Results from the UNL study show that if 10% of Nebraska’s non-flex fuel vehicles switched from E10 to E30 , carbon dioxide emissions would decrease by 64,000 tons per year.

These numbers echoed throughout the ethanol industry, igniting a call to action in some Midwestern states.

South Dakota Weighs In

Marcy Kohl, director of communications and corporate affairs at Glacial Lakes Energy in South Dakota, says her team is well aware of E30’s benefits and they’re pushing for the state to maximize on those opportunities.

“By fueling the state’s fleet with E-30, you save $6 for every 15 gallons of fuel. What does that mean for the South Dakota taxpayer?” Kohl asked. “We’ve been trying to put that pressure on Noem, but she won’t return our calls. We are asking her to support local agriculture, ethanol and the South Dakota economy by fueling the fleet with E-30.”

South Dakota wasn’t the only state to catch wind of Nebraska’s ethanol study. After being published, the results quickly made their way to The Hill.

New Legislation Puts the Wheel in Motion

In August 2021, numerous Representatives backed the Next Generation Fuels Act of 2021, which aims to “promote low-carbon, high-octane fuels, to protect public health, and to improve vehicle efficiency and performance,” according to the bill.

Included in the legislation are requirements for:
1. Manufacturers to design vehicles with E20 blend capabilities in their non-flex fuel vehicles by 2026, and E30 blends by 2031.
2. Fuel retailers to offer the respective higher-octane options as the non-flex fuel vehicles are made available to the public.

Rep. Cheri Bustos (D-IL), who led the bill’s introduction, says this legislation important because it will “bring an environmental lens to biofuels production” by reducing carbon emissions and improving air quality.

While this bill remains in the introduction phase in the House, various Senators moved to introduce the same bill in the Senate on Tuesday.

“ Unstable gas prices have left many families – especially rural families – with a lot of budget uncertainty,” said Senator Grassley (R-IA). “As we look to the future of liquid fuels, this legislation can play a critical role in restoring energy independence, saving consumers money, lowering carbon emissions and expanding the market for farmers and ethanol producers.”

More on biofuels:
What Is the Ethanol Sweet Spot? Up The “E”
EPA Faces Lawsuit for Ethanol’s Impacts on Endangered Species
EPA Proposes New Rules on RFS, Finalizes Biofuel Blending Requirements
John Phipps: It’s Now Less About the Supply of Oil, And More About Refining Capacity in the U.S.

Renewable Fuel's Big Week on The Hill

Thu, 28 Apr 2022 19:32:45 GMT

U.S. Surface Transportation Board (STB) kicked off a busy week of public hearings on Monday, with Biden administration officials, like Pete Buttigieg, looking at steps to hitch the disrupted railway system back together.

Railroads in the U.S. typically transport more than 370,000 carloads of ethanol per year, according to the Renewable Fuels Association (RFA). Currently, the STB shows average railcar dwell time for ethanol this week is at 61.4 hours, nearly doubling the same weeks average in 2021 at 37.1 hours.

Linking Ethanol to Gas Pumps

With EPA suspending the E15 summer ban and the Biden administration dedicating $100 million to ethanol availability at pumps across the nation, refiners will likely see a spike in demand that might be stretched if there aren’t enough railcars moving ethanol.

Geoff Cooper, president and CEO of the RFA, spoke to the renewable sector’s reliance on “efficient and timely” rail service by submitting written testimony to be addressed during the hearing.

“The rail traffic congestion issue and subsequent decision to meter traffic is leading to major disruptions for our members and is impacting their ability to maintain production and deliver vitally important fuel ethanol to the market,” he says.

Labor shortages and inefficient use of railways have frequently mumbled through microphones at the STB hearing, according to Jared Mullendore, RFA director of government affairs. He says much of the proposed action in the hearings have centered around privately owned rail cars.

“We’re focused on getting these privately owned cars moving at a pace we used to see because this slow trend is impacting our producers and our membership,” he says. “We’re still getting the product where it needs to be, but the inefficiency is causing our producers to slowdown or even shutdown completely.”

According to Cooper, more than 70% of ethanol produced in the U.S. is transported by rail across the lower 48 states, along with Canada and Mexico. As United States Trade Representative Katherine Tai visits Canada this week to discuss USMCA, we will likely hear more on rail situation across borders.

EPA Looks to Crank-Up the Volume

EPA Administrator Michael Regan shared a similar ethanol conversation with AgriTalk Host Chip Flory earlier this week.

Regan’s agency previously proposed to deny all pending Small Refinery Exemption (SRE) requests under the Renewable Fuel Standard (RFS). While he believes the denial will come through, Regan says his agency is weighing all options.

“We need to be on course to grow biofuels in this country,” says Regan. “When we look at these exemptions, it’s our opinion—along with the courts—that these exemptions have not been done appropriately in the past, and we look forward to making the right calls as we move forward.”

In early April, EPA decided the fate of the 2018 SREs under the RFS by moving to deny 36 of the pending waivers. The agency then offered relief to 31 waivers previously granted by allowing the facilities to meet their 2018 obligations without purchasing credits to show compliance with the law due to “extenuating circumstances.”

Future SRE relief opportunities were put to rest when Regan shared his agency’s outlook with Flory.

“The alternative path for compliance that was awarded to the first batch of SREs was done because these mistakes were made so far in the past,” says Regan. “The market has moved forward; the conditions on the ground have shifted. Moving forward, those compliance alternatives are not a guarantee.”

Renewable Volume Obligations (RVOs) obligations for coming years will be finalized by the EPA on June 3rd. Regan says the RVOs his team has planned will revamp the RFS program, offering biofuels a “sound footing” to play the role Congress intends for it to play.

“2020 was a cleanup year. 2022 will be one of the most aggressive RVO years that we have seen,” he says. “From 2023 and beyond, we want to build on that by showing how biofuels will be a part of the solution for climate change, and in lowering the price at the pump.”

Renewable Fuel Takes Flight

Jim Wiesemeyer, ProFarmer policy analyst, says renewables should be gearing up for a big break in the sustainable aviation fuel sector.

“Letters are starting to come out, urging the sustainable aviation fuel credit,” Wiesemeyer shared 19-minutes into the podcast. “Lobbyists are gearing up for an eventual vote and I really see it coming in the form of a down payment in a green new deal.”

Jordan Fife, BioUrja Group trading president, told Flory the pipeline that is renewable diesel can handle sustainable aviation fuel credits.

Flory agrees with Fife and Wiesemeyer, saying Senator Chuck Grassley (R-IA) is “gaining good momentum” in the sustainable aviation fuel sector.

Read more on ethanol:

> E15 Summer Ban Suspended, USDA Commits $700M To Biofuels Producers

> EPA Moves to Deny 36 Small Refinery Exemptions, Extends Olive Branch

Ethanol Outlooks Stable, Westhoff Says Export Demand Optimistic

Fri, 24 Sep 2021 14:50:10 GMT

University of Missouri Director and Howard Cowden Professor Patrick Westhoff joined AgriTalk host Chip Flory to share economic insights heading into the fall.

With crops in the Midwest transitioning from their vibrant, summer green to the long-awaited dull, harvest brown, Westhoff weighs in on what to expect in the markets following the crop season.

“Crop receipts for corn, soybeans, any number of other crops and even the livestock side as well is up sharply in 2021, offsetting that drop in payments and the increasing production costs this year,” says Westhoff.

Trade agreements, according to Westhoff, are in part to thank for current markets when comparing numbers from last week to a year ago.

“The number one difference is that we’ve got steadily higher imports from China projected now than they would have sent back then. That is a huge factor in the market. That’s why we’re talking about over $4 corn average prices for the next five years,” says Westhoff.

The ethanol boom seems to be nearing an end, but Westhoff says it shouldn’t be considered phased out just yet.

“We don’t show any big change in overall ethanol consumption in this country in the next decade. Even if electric cars expand, that’s not going to replace the fleet overnight,” says Westhoff. As long as we have continued use of 10% blends in at least some expansion of the higher-level blend markets, we think we could probably sustain something like current levels of domestic consumption for a number of years in the future of export demand, perhaps even a little bit more optimistic.”

Livestock outlooks are promising in Westhoff’s data. While he says decreasing cattle numbers over the next few years will mean a tighter supply-demand balance, pork tells a different story.

“We were surprised by how high hog prices have gone this year. It’s been a combination of strong demand from China, less supplies than we would have anticipated at these kinds of prices. Of course, higher feed costs have all come into play there. Looking forward, if we were to have a little more normal situation of the feed front, and if the growth in import and export demand is not as strong in 2022 as it’s been this past year, we could see some softening of higher prices in 2022,” says Westhoff.

Net farm income this year will reflect previous records, according to the University of Missouri Professor. However, he doesn’t predict they will stay that way.

“We’re looking at an annual number this year that’s almost at the 2013 record. Then falling off to about $100 billion dollars next year. In nominal terms that will leave the average farm income in the projection period a little bit above the recent average. But once you factor in inflation, it’s more comparable to want we’ve spent in the last five to seven years,” says Westhoff.

To hear more from Dr. Pat Westhoff, listen here.

Kay's Cuts

Fri, 20 Nov 2020 05:31:41 GMT

Corn Crisis Continues

Oil and corn prices continue to shake the markets and are threatening to downsize the meat and livestock industry. Cattle feeders and hog producers are losing huge amounts of money and there appears to be little relief in sight. Meanwhile, food inflation could accelerate if and when the cost of producing beef, pork and chicken is fully passed to consumers.

A portion of these added costs is corn-related. Just “how much” has been hotly disputed in recent months. But denials about the impact of high corn prices on food prices and about the impact of ethanol’s influence on corn prices are wearing thin. USDA and the White House are finding it harder to defend their position on both counts, in light of current prices and what critics are saying. Keith Collins, USDA’s former chief economist, now believes biofuels are becoming “a significant factor” in higher food prices. That’s an almost total reversal from what he said before he retired from the job six months ago.

Not enough corn. Another brick on the pile comes from the World Bank. A confidential, unpublished report by one of its most senior economists says biofuels have forced global food prices up by 75%. The report was apparently completed in April but only disclosed the second week of July, just before leaders of the G-8 industrialized nations met in Japan. Despite this, it seems unlikely the Bush administration will accede to a request (from the governor of Texas) for waivers of the biofuels mandate, or to demands for ending ethanol’s 51¢/gal. subsidy or the 54¢/gal. tax on imported ethanol.

So, the pressure on corn prices will remain. Forecasts for this year’s weather-damaged crop vary, from 11 billion to 12 billion bushels. Analysts agree the size of the crop won’t be known until harvest is finished. Meanwhile, cattle feeders are grappling with cash corn prices over $7.50/bu. (Texas Panhandle basis in early July), versus $3.64 a year ago. Hog finishers face similar increases and soymeal prices are nearly double those of a year ago.

Prices rise. As if this wasn’t enough, the doubling of gas and diesel has increased the cost of transporting food, from live animals to vegetables. Oil and corn have sharply increased retail prices of food staples. For example, the price of a dozen eggs rose 28% from May 2007 to May 2008. The price of a gallon of milk rose 15%, a pound of cheese nearly 11% and a turkey 10%.

The big story, though, is the way meat and poultry prices increased only marginally or not at all. Apart from turkeys, the only increase was a 3.5% climb in chicken breast prices.

Producers and processors have almost totally absorbed the increased cost of feed until now. This has caused huge financial losses. More than 80% of U.S. beef is grain-fed. Once cattle enter a feedlot, feed accounts for 60% to 70% of the cost of production. That compares to 60% for chickens and more than 50% for hogs.

Big losses. Put the dollars on paper and cattle feeders could be losing $80 million per week while pork producers are said to have lost $2.8 billion since last summer.

However, passing on the higher costs of producing meat to the consumer is double-edged for the industry. It would drive up consumer cost of beef and pork, impacting domestic and global sales.

At press time, the futures market suggests live cattle prices in February 2009 will be 30% higher than last year. For beef processors and grocery chains to keep their margins, retail prices will need to be 20% higher than they have been so far this year. That’s one reason why economists forecast food inflation could top 9% annually from 2008 to 2012. Such inflation hasn’t been seen since the 1970s. The huge difference is that today, Americans are paying twice as much for petrol as they did then.

Steve Kay is the editor and publisher of Cattle Buyers Weekly (707) 765-1725; www.cattlebuyersweekly.com .

Top Producer, Summer 2008

The Surprise Fuel Flows Sparked by a Raging U.S.-China Trade War

Thu, 19 Nov 2020 03:14:15 GMT

(Bloomberg) -- A Southeast Asian nation that was a bit player in the biofuel market is suddenly buying and selling unprecedented supplies. The U.S.-China trade war may have something to do with it.

Malaysia has emerged to displace the U.S. as the biggest supplier of ethanol to China in just two months. It’s also the first time the Southeast Asian country is selling such significant volumes to the world’s top consumer. At the same time, it’s buying a record amount of the fuel from America.

The hook? The shift occurred after President Xi Jinping imposed tariffs on U.S. ethanol imports in retaliation to American counterpart Donald Trump’s duties on Chinese goods. While the two countries apply tit-for-tat levies, shipments from Malaysia to China are tax free.

The dispute between the world’s two largest economies has roiled markets from consumer goods to soybeans, but rarely has a completely new player emerged to fill in a supply gap. The sudden spike in the flows in and out of Malaysia has taken traders by surprise, according to Heather Zhang, a Singapore-based analyst who follows the global biofuel industry at researcher PRIMA.

“It’s an interesting opportunity,” Zhang said. “It shows some merchants are enthusiastic in their effort to generate profitability and adapt to change in the international trading environment during this unusual trade war event.”

Questionable Demand

There is no significant production or use of fuel ethanol in Malaysia, the U.S. Department of Agriculture said in a report in October last year. It’s not produced commercially as the feedstock is expensive to transport, and it’s also excluded as a source of alternative fuel under the Southeast Asian nation’s biofuel policy, according to the USDA.

For China, demand for the renewable fuel is growing after the world’s largest automobile market announced an ambitious plan to expand the use of ethanol gasoline for vehicles nationwide by 2020. Weaning itself off from U.S. biofuel may be a challenge it struggles to meet given the lack of domestic production capacity, as well as higher prices from suppliers elsewhere.

How Much?

Malaysia bought about 97 million liters of ethanol this year from the U.S., mostly in August and September, for a total $35 million, or 36 cents a liter, according to the USDA.

China purchased a total 88 million liters of ethanol, labeled as ethyl alcohol in import data, during August and September from Malaysia, compared with zero inbound shipments in the first seven months of this year. The total value of the purchase reported to Chinese authorities was about $49 million, or 56 cents a liter.

Meanwhile, shipments from America to China plunged to just over 13 thousand liters in the quarter ended Sept. 30. China’s price per liter for U.S. ethanol was about 44 cents a liter. Now that would be subject to tariffs including a 25 percent levy imposed in July, a 15 percent tax adopted in April, and a 30 percent tariff on all ethanol imports. The prices reported to Chinese customs and the USDA exclude duties.

While a direct transfer of U.S. ethanol via Malaysia to China would be in breach of China’s tariff rules, the product can be labeled as originating in the Southeast Asian nation if it’s blended with at least 40 percent locally produced fuel before the resale. China already offers preferential levies to qualified products originating from ASEAN countries including Malaysia, and is also looking to finalize a 16-nation trade bloc deal in 2019.

“The market is curious whether the flow will persist and eventually develop Southeast Asia as a sustainable emerging hub,” Zhang said.

Still, some market participants have raised red flags over the sustainability of the new flows, according to a PRIMA report in August. They suspect there is not enough ethanol production capacity in Malaysia for such a trade to seem legitimately viable for long, PRIMA said, cited industry discussions.

“The industry understands that ethanol production in Malaysia is limited, and the country doesn’t consume ethanol either,” Zhang said. “This change has subverted many people’s perception of the fundamentals.”

©2018 Bloomberg L.P.

Biofuel Fight Lives On

Wed, 11 Nov 2020 05:09:55 GMT

(Bloomberg) -- The price of biofuel blending credits tumbled Friday on mounting speculation that the fight by independent oil refiners to change U.S. laws mandating the use of ethanol will lead to rule changes.

A meeting was said to take place on Friday between Environmental Protection Agency Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue to discuss possible changes to the Renewable Fuel Standard, the law that forces refiners to use escalating amounts of ethanol and biodiesel, according to people familiar with the discussions.

A follow-up meeting is scheduled for the morning of Feb. 27 with President Donald Trump and four Republican senators on both sides of the issue, said the people, who asked not to be named in discussing private deliberations. Pruitt, Perdue and other officials are also expected to be in attendance.

The meetings show that the campaign to change the biofuels mandate is gaining momentum, six months after its fiercest and most outspoken critic, billionaire investor Carl Icahn, left his role as regulatory adviser to the president.

Icahn, who owns an 82 percent stake in CVR Energy Inc., a Sugar Land, Texas-based oil refiner, became the public face of the campaign to reform the 13-year-old law through a series of letters, editorials and interviews in recent years. Icahn served as a regulatory adviser to Trump until August, and his advocacy for changing the RFS while in that role prompted complaints from Democratic lawmakers about potential conflicts of interest.

Federal investigators have issued subpoenas seeking information on Icahn’s efforts to alter biofuel policy during his time advising Trump.

At the center of the debate are tradeable credits known as Renewable Identification Numbers, or RINs, that refiners use to show compliance with the mandate. RINs prices have been volatile in recent years.

On Friday, prices of the credits tumbled as much as 12 percent, according to broker data compiled by Bloomberg.

The dispute intensified last month with the bankruptcy filing of Philadelphia Energy Solutions LLC, the largest refinery on the U.S. East Coast. Companies like PES, Valero Energy Corp. and CVR that lack the infrastructure to blend biofuel and generate the credits themselves must instead buy them from other sellers, including other oil companies as well as traders who have no obligation under the program.

Nevertheless, CVR and other independent refiners may be benefiting from the intensity of the push over the past year to change the program. Prices for RINs tracking 2018 ethanol consumption targets have fallen 37 percent to 62 cents apiece since Oct. 25, according to data compiled by Bloomberg. The biodiesel variety has dropped 26 percent to 80 cents apiece.

The decline is due, in part, to the increased likelihood of legislative reform, Jason Fraser, Valero’s vice president of public policy, said on a Feb. 1 conference call with investors. Earlier that day, Marathon Petroleum Corp. Chief Executive Officer Gary Heminger said that he was “fairly confident” that there will be a resolution by “this spring.”

David Lamp, CEO of CVR, said Thursday he’s “very optimistic something is going to happen,” citing the involvement of ethanol champions Senator Chuck Grassley and Senator Joni Ernst, both Iowa Republicans, and Senator Ted Cruz and Senator John Cornyn, both Texas Republicans.

Copyright 2018, Bloomberg News