Frustration Brews in the Ethanol Industry

by Dan Looker (Successful Farming) Lawsuits and EPA petitions are in the works. -- ... “I would say the status quo right now is unacceptable for the industry,” says Emily Skor, CEO of Growth Energy. “If he’s (President Donald Trump) supportive of year-round E15, let’s do it. Let’s see it.”

1. Skepticism is growing about the Trump administration’s support for E15. In order to open markets to E15 by next summer’s driving season, the EPA needs to issue a rule this fall that waives vapor pressure restrictions on blends above E10 in certain markets. It takes months to field comments from affected industries before a final rule kicks in.

2. All see continued growth in ethanol exports reaching a new record in 2018. That’s in spite of a trade dispute already blocking sales to China. But two strong markets, Mexico and Canada, are at risk if NAFTA talks go poorly.

3. Ethanol demand destroyed by former EPA Administrator Scott Pruitt hasn’t been restored yet. Ethanol groups have had to sue the EPA, as well as petition the agency to reallocate lost ethanol volume in the U.S. market when Pruitt allowed some refiners to stop blending.

So far, exports have been the industry’s escape valve, even after three rounds of tariff increases closed off the market to China.

Two groups, Renewable Fuels Association and ACE, joined the National Corn Growers Association and National Farmers Union to challenge the legality in federal court for three of the exemptions granted under Pruitt. Growth Energy and most of the industry also have petitioned EPA to reallocate the blending volume to the rest of the oil industry not affected by the exemptions.

If that fails, “there may well be more litigation in the future,” Skor says. READ MORE

Excerpt from DTN The Progressive Farmer: Ag leaders in the Trump administration may have thought the announcement a couple of weeks ago of a $12 billion aid package might quell some farmer voices of unrest, but farmers remain split over the damage done by tariffs that have reduced agricultural trade.

Pushing back on the White House tariff strategy, the group Farmers for Free Trade announced Wednesday its plans to buy advertising in radio, television and print that will run in Iowa, Indiana, Kansas, Michigan, Minnesota, Nebraska, Ohio, South Dakota and Wisconsin.

"Farmers are feeling the pain from President Trump's trade war," one radio ad begins. Indiana farmer Brent Bible then says, "Free trade is essential to the ag economy. This is not a war that I signed up for. It's not a war I want to be drafted for. Our farm and many others like ours will be the first casualties of a trade war." The announcer then finishes, "President Trump, stop the trade war."

Farmers for Free Trade is a bipartisan group started by former Sens. Richards Lugar, R-Ind., and Max Baucus, D-Mont. The group's board president, Sara Lilygren, said the ads will speak to farmers who are seeing tariffs force down the price of their crops and livestock.

(Bart) Ruth has worked on trade for commodity groups such as the American Soybean Association going back to the 1990s. He noted that roughly $1 billion has been spent just over the past five years on USDA programs such as the Market Access Program and Foreign Market Development Program.

"Unfortunately, there are going to be some farm families whose livelihoods are on the line and who won't survive this," Ruth said. He added that bankers running cash flows now would not have approved some loans last spring under current price conditions. "So even if we get this scenario resolved by the end of the year, the repercussions are going to last longer than that." READ MORE