Farm-State Fury Creates Pressure for Trump as Trade, Energy Pain Collide

October 02, 2019

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by David J. Lynch (Washington Post) ... After two decades, Siouxland (Energy Cooperative) this month halted operations following the Environmental Protection Agency’s decision to exempt 31 small oil refiners from a federal law requiring them to blend ethanol in their gasoline. The waivers, which the Trump administration has approved almost four times as often as its predecessor, have undercut demand for ethanol and the corn used to make it, farmers said.

“The waivers are what pushed us over the edge,” said Steve Westra, 46, the plant manager. “It absolutely killed the potential for anybody to make any money at this.”

For Iowa farmers already suffering from an extended trade war with China, the ruling has made ethanol the focus of their growing ire over President Trump’s policies.

The trade war has cost farmers potential Chinese orders for the corn-based fuel as well as for a byproduct that is used as animal feed. Now, the refinery exemptions are compounding the financial pain — and threatening political consequences for the president, who won this state and its six electoral votes in 2016.

“I supported Trump in the last election. Today, if the election were held, I don’t think I could vote for him,” said Kelly Nieuwenhuis, 60, a corn and soybean farmer in Primghar, about 40 miles east. “It’s definitely growing, the displeasure with the Trump administration.”

...

Many of those grumbling about Trump today concede they are unlikely to vote for a Democratic presidential candidate next year.

But Democrats flipped two of the state’s congressional seats in the 2018 midterm election, and Barack Obama won Iowa twice, so Republicans are attentive to any signs of eroding support.

...

But this year, as hopes for an agreement with China rose and fell, and multiple rounds of Chinese retaliation for U.S. tariffs destroyed their export sales, farmers’ support curdled into impatience.

“Something needed to be done with China. It always felt like we were being taken advantage of,” said Jolene Riessen, who grows corn, soybeans and alfalfa in Ida and Sac counties. “But President Trump always talks about ‘The Art of The Deal.’ Well, it’s time to make the close. It’s time to get something done.”

...

The trade war erupted as farmers were counting on a major increase in Chinese orders for U.S. ethanol and an ethanol byproduct called distillers dried grain (DDG.) Those potential sales for the past two years have now become casualties of the trans-Pacific conflict, Nieuwenhuis said.

...

In recent years, he has added wind turbines to his fields.

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China in 2015 had purchased more than 5 million metric tons of DDG, a high-protein animal feed, valued at $1.4 billion, according to the U.S. Grains Council. By the following year, China was the No. 3 export market for American ethanol, purchasing more than 200 million gallons, worth almost $350 million, the industry group said.

Since then, DDG sales have plunged by roughly 98 percent; ethanol orders are virtually nonexistent.

...

Multiple farmers said the Agriculture Department payments that the president bills as full compensation for lost Chinese sales, while better than nothing, still leave them in the red.

Farmers are growing exhausted by the president’s alternating suggestions of an imminent deal or an indefinite stalemate. “People thought it was going to be about a two-round fight, and we’d show them who was boss,” said Eric Walhof, president of Northwest Bank. “Now, we have fatigue. Are we in this for another two years? Five years?”

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In Sioux Center, meanwhile, the economics for the local ethanol plant grew dire. Siouxland spent $3 million on an upgrade just a few months ago, expanding annual capacity to 80 million gallons.

But the waivers drove the facility into the red. To cut their losses by two-thirds, officials extended indefinitely an annual maintenance shutdown. They continue to pay Siouxland’s 42 employees, hoping the administration will reassign the lost refinery requirements to other facilities and allow them to reopen.

Roughly a dozen other plants across Iowa are close to making the same decision, according to Westra, the plant manager.

...

Farmers who otherwise would have sold their crop to the plant now will have to pay to dry and store it. READ MORE

IS TRUMP'S LONG BIOFUELS NIGHTMARE OVER? (P0litico's Morning Energy)

Trump Officials Agree on Plan to Boost Ethanol, Biodiesel (Bloomberg)

Trump administration close to finalizing biofuel deal: sources (Reuters)

What Happens When an Ethanol Plant Shuts Down? (Renewable Fuels Association)

Wisconsin corn growers, ethanol producers opposing small refinery exemptions (WisBusiness)

Farmers fed up with broken promises (Wallaces Farmer)

ND ethanol industry feeling the heat (KFYR TV)

EPA stops work on a deal meant to help farmers battle big oil industries (FOX Business)

JONI ERNST VOTED FOR EPA LEADERS UNDERMINING ETHANOL (Iowa Starting Line)

Midwest Farmers Continue to Support Trump, Part 234 (Mother Jones)

Cruel Summer (Biodiesel Magazine)

Farm industry leaders speak out against SREs (Ethanol Producer Magazine)

Minnesota farmers need D.C. to restore ethanol market (Star Tribune)

U.S. EPA pauses biofuel deal over oil states' demands, impeachment probe -sources (Financial Post)

PERDUE AND REYNOLDS ON UPCOMING BIOFUELS PACKAGE (Brownfield Ag News)

Trump's EPA may use partial refinery waivers under biofuel deal: sources (Reuters)

Iowa’s governor still awaits details of Trump’s biofuels deal (Radio Iowa)

As harvest begins and biofuel plants idle, ethanol backers grow impatient for deal (Omaha World Herald)

Axne, Klobuchar hold ag roundtable (KMALand)

Klobuchar, Axne listen to farm economy concerns: 'We’re going to be out there fighting every day' (Daily Nonpareil)

Ethanol demands are down, farmers and producers point to EPA waivers (KTIV)

In Iowa, Climate Change Is Shaping the Presidential Race — Other Early Primary States Too (Our Daily Planet)

TUESDAY TOPIC: Grassley: Open lines of communication are essential (Sioux City Journal)

Tough times for our local Ohio farmers (Advertiser-Tribune)

Ethanol economics: industry experiences volatility (KEYC; includes VIDEO)

Trump's mounting troubles in Iowa could spell doom for Republicans (The Guardian)

China Ties Agriculture Binge to Trump Reducing U.S. Tariffs (Bloomberg)

Farm Giants Slog Through Trade War (Wall Street Journal)

US biodiesel production likely to continue declining on lapsed tax credit (Independent Commodity Intelligence Services)

Excerpt from Poltico's Morning Energy: IS TRUMP'S LONG BIOFUELS NIGHTMARE OVER? Ethanol producers and oil refiners are waiting with bated breath to see if the Trump administration will follow through on a reported breakthrough on biofuels. According to Bloomberg , the deal would follow contours that have been much discussed for weeks, with small refinery waivers limited to the number represented by a three-year rolling average of previous waivers, but no cap on compliance credit prices. Hill and oil industry sources say to also expect a boost in biofuel volume requirements in the blending mandate EPA must produce by Nov. 30.

For real for real? The Trump administration has been on the cusp of delivering a biofuels package to help Midwestern farmers for months, and the delay has left everyone nervous, especially with the White House tied up trying to defend Trump from impeachment. As one Republican Senate aide told ME, "We haven't seen paper." READ MORE

Excerpt from Biodiesel Magazine: “You need to understand,” Sen. Chuck Grassley, R-Iowa, tells Biodiesel Magazine, “Trump’s the only one in the White House who cares about biofuels. He’s the only one who understands anything about the industry. It’s fair to say he doesn’t understand all the details—he leaves that to the EPA—but EPA is not enforcing the law. That’s the worst thing—when you have someone in the White House who is supportive but those in his administration are not carrying out the president’s direction.”

As that fateful August decision was announced, U.S. biodiesel producers entered the 20th month without the blenders tax credit—the longest lapse since the important incentive first went into effect in 2005. For five years, the tax credit was successful in helping grow the biodiesel industry before RFS2, the second installment of the RFS passed in 2007 that included advanced biofuels and biomass-based diesel whose implementation finally began July 1, 2010. READ MORE