Bumper Crops Underscore Risk in Biofuel Investment Slowdown

January 14, 2026

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by Kim Chipman (Agri-Pulse) As farmers get a new round of bad crop market news, biofuel investment has stalled due to U.S. policy uncertainty.

America’s crop farmers got hit with a fresh wave of market woes this week, ramping up pressure on the Trump administration and Congress to move faster on biofuel policy the industry says is crucial to its future. Domestic supplies of corn and soybeans are bigger than previously estimated, with the current corn crop at a record, the the Department of Agriculture said in its closely watched monthly crop report on Monday.

Grain and soy prices fell. The full bins collide with murky demand outlook and a surge in farm production costs. Ag and biofuel groups are doubling down on calls for Washington to take action. The wish list includes passing congressional legislation to allow year-round, nationwide sales of higher blends of corn-based ethanol, known as E15, and for the Environmental Protection Agency to finalize overdue 2026 biofuel-blending regulations.

Montana Renewables CEO Bruce Fleming says the lack of policy clarity means there's not funding for new U.S. biofuel projects. READ MORE

Related articles

USDA confirms record corn production for 2025, increased sorghum production (Ethanol Producer Magazine)
USDA Responds to Farmer Frustration After January Report Delivers Major Surprises (AgWeb; includes VIDEO)
What Are We Going to Do With 17 Billion Bu. of Corn: Will it Push Congress to Pass E15? (AgWeb)
Economist says low corn prices could help shape ag policy in 2026 (Brownfield Ag News)
Bearish report highlights need for biofuel certainty (AgriNews)

Excerpt from Ethanol Producer Magazine: Grain sorghum production was also up significantly when compared to the previous year.

According to USDA, 2025 corn yields are estimated at a record high 186.5 bushels per acre, up 7.2 bushels per acre when compared to the previous year. Record high corn yields were reported for Georgia, Indiana, Louisiana, Minnesota, Nebraska, North Dakota, South Dakota, Virgina, Washington and Wisconsin.

Corn planted area was at 98.8 million acres in 2025, up 9% when compared to the 2024 estimate. Area harvested for grain is estimated at 91.3 million acres, up 10% when compared to the 2024 estimate.

Grain sorghum production for 2025 is estimated at 437 million bushels, up 27% when compared to 2024. Total planted area for 2025 was estimated at 6.64 million acres, up 5% when compared to the previous year. Area harvested for grain reached 6.02 million acres, up 7% when compared to 2024, while grain yield was estimated at 72.6 bushels per acre, up 11.3 bushels. Record high sorghum production is expected in Colorado. READ MORE

Excerpt from AgWeb: Lance Honig, chair of the Agricultural Statistics Board and a NASS official, addressed farmer concerns in a Farm Journal interview explaining the major January data revisions that caused corn prices to sink on Monday (January 12, 2026).

The January USDA reports, considered the most influential data releases of the year, delivered unexpected increases in corn yield, harvested acreage and total production, pushing the U.S. corn crop above 17 billion bushels and sending futures sharply lower.

Ahead of the reports, average trade estimates pointed to only minor adjustments, a typical pattern for January. Instead, USDA delivered one of the more consequential end-of-season revisions in recent years, triggering frustration among farmers who struggled with disease pressure and weather challenges during the growing season.

Key takeaways from the report:

Corn yield: 186.5 bu./acre, well above expectations
Soybean yield: 53 bu./acre; production at 4.26 billion bushels
Corn production: Record 17 billion bushels
Harvested corn acres: 91.3 million
Dec. 1 corn stocks: Over 13 billion bushels, above trade estimates
Soybean stocks: 3.3 billion bushels
Wheat stocks: 1.6 billion bushels

Ending stocks estimates from USDA were also higher than anticipated with corn at 2.2 billion bushels. Soybeans came in at 350 million bushels.

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The biggest surprise came as USDA raised corn yield despite expectations for a cut, driving record production and adding pressure to an already well-supplied market.

“Acres times yield,” says Joe Vaclavik of Standard Grain. “There were too many corn acres, and the yield was larger than what the trade had expected. And that combination left us with a U.S. crop estimate for 2025, north of 17 billion bushels, more than 1 billion larger than the previous record. So, the trade was caught totally off guard by the size of the crop.”

Vaclavik says not only did those changes surprise the market, but it also sparked debate.

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“There’s a lot of debate,” Vaclavik says. “Was the yield number accurate? Were the acres accurate? The acres ever been accurate? A lot of debate about that, but that was the big surprise.”

Accuracy of USDA’s Latest Reports in Question

The accuracy of the reports, and how USDA came up with such a large jump in acres, is what’s aiding the farmer frustration. USDA Deputy Secretary Vaden was asked about that while speaking to farmers during the Kentucky Bowling Green this week.

“Why does USDA continue to find corn acres and similar data that destroy markets as soon as they get too high,” was the question from one farmer.

“We may not like the report, but it is not necessarily inaccurate,” Vaden responded. “USDA market moving data will be more closely scrutinized going forward, and will begin to be held accountable for large revisions if it is a fault of the agency. We plan to have NASS staff available at the Ag Outlook Forum this year to answer questions as well. We will find out in September of 2026 if their current estimates were off based on revisions made at that time. If we notice a trend in errors we will review the way the statistics are calculated.”

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Industry expectations compared to what NASS published. (USDA NASS )

Small National Increase in Corn Yield, Big Regional Differences

Lance Honig, chair of the Agricultural Statistics Board and a senior official with USDA’s National Agricultural Statistics Service (NASS), also addressed those concerns in a one-on-one interview with Farm Journal this week, offering detailed explanations on how and why the January data changed so significantly.

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The Bigger Driver Came in Harvested Acreage Jump

While yield caught headlines, Honig says the most significant factor behind the production increase was harvested acreage.

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He says earlier in the year, USDA assumed the ratio of planted acres harvested for grain would remain consistent with what farmers reported in June, and consistent with how much of the crop went to grain versus went to silage or was abandoned, would be similar to past years.

“When we went back and surveyed 73,000 farmers after harvest and collected actual results, what we found was a much higher proportion of those larger planted acres went to grain than we had previously anticipated,” Honig says.

Final Planted Acreage Still a Surprise With Big Changes from June to January

USDA estimates farmers planted 98.8 million acres of corn, about 3.6 million more acres than expected back in March and June. Honig says that number was surprising not only based on what farmers told USDA and NASS earlier in the year, but also based on what most people watching the situation thought back in June, as well.

“This was definitely a larger change between June and January than we would typically see,” he says. “There’s really two components. You really have to break the acreage down though, because you’ve got your planted area and then, of that total, how many of the acres were harvested for grain. Obviously big changes from June to January in both cases, but from a planted perspective, we picked this almost all up back in August and September.”

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How the Data Was Collected

It’s also important to note how the data was collected for the January report. Honig emphasizes January estimates are built on actual, end-of-season results rather than projections.

“For the end of the season, it’s really largely driven by a large survey we do of producers, about 73,000. We do that in the month of December, which means it’s after harvest,” he says. “So we’re actually asking a large number of producers after everything’s in the bin.”

Those surveys are conducted after harvest and ask farmers directly:

How many acres they planted
How many acres they harvested
How many bushels they harvested
What their final yield was

USDA also incorporates final objective yield survey data, which comes from physical sample plots across key growing regions. So, it’s no longer forecast, and it’s actual data from the crop that’s harvested.

“We do also have final results from the objective yield survey work that we did as well, which means those sample plots that we lay out across the key growing area across the country,” Honig says. “And so a lot of data after the crop has already been not only grown but harvested that are really just giving us actual results.”

Survey Response Rate and Farmer Participation

The December producer survey had a response rate of about 40.2%, down from roughly 46% last year but still strong by industry standards.

“If you compare that to what most folks in the survey business are doing, that’s actually still quite good,” Honig says.

Still, he encourages farmers to participate whenever possible.

“My message to all farmers would be: The more response we get, the more data we have, and the more accurate we can be,” he says.

Acknowledging Farmer Frustration

Honig says he understands why producers are frustrated by large January revisions, particularly in a year when margins are tight.

“These are all data-driven decisions,” he says. “We have one purpose at NASS, and that’s to estimate everything as accurately as we can.”

He notes that earlier use of FSA data helped reduce the size of the January adjustment and says USDA will continue evaluating ways to improve the process.

“We’re going to dig in between now and June and see if there’s anything we can do to make the process even better,” Honig says.

The Part Not Many Are Saying Out Loud

Vaclavik says the changes were surprising, and whether you think they’re accurate or not, Vaclavik points out the USDA reports have produced unprecedented changes all year. He thinks there’s an underlying issue impacting the data from USDA and NASS.

“My personal opinion is that it’s not an opinion. USDA is understaffed,” says Vaclavik. “Understaffed to what degree, I don’t know. That is the simplest answer to the reason that the data has been, the word I’ve been using for acres is ‘janky.’ It’s kind of all over the place. You saw these big moves during the growing season that you wouldn’t typically see. And I know the survey response rates are never great. That was again, the case this year, but I think that the easiest and simplest and most obvious answer. Is that USDA has staffing problems. They’re doing relocations. They, I think, pay people to quit, basically. I think that’s where the problem is.”

What Comes Next

Beyond corn, Honig says winter wheat seedings came in roughly in line with last year, slightly higher than some expected, and emphasized that the March report will provide another opportunity to refine those estimates. READ MORE; includes VIDEO

Excerpt from Ag Web: he political climate might finally be right to pass year-round E15 legislation. Analysis from NCGA indicates E15 legislation would be one of the quickest ways to increase demand and work through the record pile of corn.

USDA’s projection of a record 17-billion-bushel corn crop is turning up the heat on lawmakers to get nationwide, year-round E15 legislation passed in Congress.

Analysis from the National Corn Growers Association (NCGA) indicates that would boost corn use by approximately 2.4 billion bushels annually and be one of the quickest ways to increase demand and chew through the record pile of corn in the U.S.

Is the Time Finally Right?

The political climate might finally be right to pass year-round E15 legislation. Biofuels leaders, including Geoff Cooper, president and CEO of the Renewable Fuels Association, are optimistic about attaching a bill to the mini-omnibus appropriations bill or the Continuing Resolution (CR) at the end of January.

“We know there’s going to be another CR bill at the end of January to hopefully avoid another shutdown, but the bottom line is we have to get it done,” Cooper says. “I don’t want to say it’s now or never, but the period between now and early 2026 is really our best shot at getting this legislation done.”

Bipartisan Support for E15

Cooper says there’s growing bipartisan support for E15 in Congress and even from the oil industry.

“We had 70 ag and biofuel groups at the state level, at the federal level, that sent a letter on that last week,” Cooper says. “It’s gotten a very good response. We’re hearing a lot more chatter on the Hill today about this being a priority. Senator Grassley’s been talking about this every chance he gets, but we also have Whip Emmer talking about E15.”

He adds that a year ago the biofuels industry was close to having that legislation done and across the goal line.

“We think we’re pretty close again this year,” Cooper says.

House Agriculture Committee Ranking Member and Minnesota Rep. Angie Craig, D-Minn., is leading efforts in the House co-sponsoring the Nationwide Consumer and Fuel Retailer Choice Act with Rep. Adrian Smith, R-Neb. She reiterated her support at the American Farm Bureau convention in Anaheim, Calif., this week.

“We need more domestic markets in this nation, and so I’m going to be looking for year-round E15, higher blends of ethanol, sustainable aviation fuel,” Craig says. “We have to be thinking about that.”

Similar legislation has been introduced in the Senate by Nebraska’s Deb Fischer, with bipartisan support including Senate Agriculture Committee Ranking Member Sen. Amy Klobuchar, D-Minn. READ MORE

Excerpt from Brownfield Ag News: An ag economist with the University of Missouri Extension says the current state of the ag economy could help shape ag policy this year.

Ben Brown says he doesn’t expect much movement for corn prices.

“Even if we look outside of 2026, I think we’re getting pretty close to an equilibrium unless we see major changes in policy,” he says. “We’ve got some more work to do on efficiency and input cost management to get to a point to where we’re making money.”

He tells Brownfield expanding ethanol demand could be an opportunity to help shape long-term market access for corn.

“E-15 has had a lot of discussion both in the U.S. and in other places around the world as they try to increase their ethanol mandates,” he says. “One of the perks of having $4.00 corn or below $4.00 corn for a period of time is it has reignited the discussion around E-15.”

Brown says farmers should take advantage of any price improvements and continue to monitor their balance sheets throughout 2026. READ MORE