Iowa Farm Leaders Warn Trump Could Lose Rural Voters unless He Makes Good on Ethanol Deal

October 18, 2019

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by Donnelle Eller (Des Moines Register) Angry over proposed ethanol changes, Iowa agriculture leaders warned Wednesday that President Donald Trump will lose rural voters next year unless he makes good on a deal to restore millions of gallons of lost renewable fuel demand.

"No more Iowa nice. Now, it's Iowa pissed," said Craig Floss, CEO of the Iowa Corn Growers Association, repeating the reaction he got from an Iowa farmer after the U.S. Environmental Protection Agency proposed changes Tuesday to the federal mandate, called the Renewable Fuel Standard.

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On Tuesday, the EPA said it would account for waivers to the oil industry that frees them from using ethanol and biodiesel, based on an average of the gallons that the U.S. Department of Energy recommends exempting. But the Trump administration earlier this month told farm groups it would use an average of the actual number of renewable fuel gallons that have been waived, which is much larger.

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"It was a promise made, and a promise broken," said Grant Kimberley, executive director of the Iowa Biodiesel Board, which held a press conference Wednesday with the Iowa Corn Growers, the Iowa Renewable Fuels Association and the Iowa Soybean Association.

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Since taking office, the Trump administration has granted 85 waivers to oil refineries, freeing them from using 4 billion gallons of renewable fuel. The exemptions have killed demand for 1.4 billion bushels of corn used to make ethanol, industry officials say.

The EPA proposal "would not restart a single" plant that's been idled in Iowa and the U.S., Shaw said, adding that hundreds of investors in ethanol and biodiesel plants are farmers.

Nearly 30 U.S. ethanol and biodiesel plants have closed either temporarily or permanently because of the exemptions. Four are in Iowa. Dozens more have cut production.

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Iowa's farm economy has struggled in recent years, given large supplies of corn and soybeans, which have depressed prices. They were further lowered by the administration's trade wars with China, Mexico, Canada and other countries, and now a decline in demand for corn-based ethanol and soybean-based biodiesel.

Dave Walton, who farms near Wilton, said the use of soybean oil to make biodiesel adds about 90 cents to the value of a bushel. Last year, Iowa grew nearly 565 million bushels of soybeans.

"This is a huge financial issue for us," Walton said.

"Our ire is aimed at EPA and Wheeler right now ... but the buck stops with the president," said Walton, who adds Trump risks losing his support over his biofuels plan.

"If he doesn't fix this, my support will go away," he said. READ MORE includes VIDEO

Senator Lankford Disappointed with RFS Mandates: Lankford believes RFS should be repealed or reformed, not increased (Office of Senator James Lankford (R-OK))

Iowa farmers blame Trump for biofuels rule they view as betrayal (WQAD)

Farmers say biofuels proposal reneges on deal with Trump (Arkansas Democrat Gazette/Associated Press)

IOWA AG LEADERS RESPOND TO EPA’S BIOFUELS PROPOSAL (Brownfield Ag News)

Ethanol Report on RFA Reaction to EPA Proposal (Energy.AgWired.com; includes AUDIO)

Iowa Biofuel Leaders React to ‘Disappointing’ EPA Proposal (WHOTV includes VIDEO)

Iowa farmers blast Trump's dealmaking after EPA biofuel plan (Bloomberg/Grand Forks Herald)

Overnight Energy: Farmers say EPA reneged on ethanol deal | EPA scrubs senators' quotes from controversial ethanol announcement (The Hill)

Farmers blame Trump for biofuels rule they view as betrayal (Associated Press)

Trump Remarks Seem to Contradict EPA Plan (Energy.AgWired.com; includes AUDIO)

US biofuel makers say EPA deal does not fully account for refinery waivers (S&P Global Platts)

Lawmakers, groups slam EPA ethanol plan (E&E Daily)

Ethanol Groups Say EPA Proposal Contradicts White House Deal (Iowa Public Radio)

Trump Expected to Stand Behind RFS Deal: Agriculture, Biofuels Groups on Briefing Call Say EPA Not Following RFS Deal (DTN Progressive Farmer)

Nebraska leaders react to proposed RFS rule from EPA (NTV)

Wisconsin Farmers, Ethanol Producers Say EPA Proposal Won't Ensure Needed Demand -- Producers Say Latest Ethanol Proposal Falls Short In Making Up For More Refinery Exemptions (Wisconsin Public Radio)

EPA’s proposed RFS small refinery measures under fire (Ohio's Country Journal)

EPA ethanol ruling falls short for corn farmers (AgDaily)

ETHANOL PRODUCER QUESTIONS IF TRUMP ADMINISTRATION SHARES MIDWEST CONCERNS (Brownfield Ag News)

President’s biofuel policy is under fire (American Press)

Commentary: More ethanol means higher prices — and not just for gasoline (Bozeman Daily Chronicle/Heritage Foundation)

TRUMP RISKS ALIENATING 2020 VOTER BASE WITH BIOFUELS POLICY THAT ANGERS BOTH FARMERS AND MANUFACTURING WORKERS (Newsweek; includes VIDEO)

RFA BAFFLED BY EPA FORMULA IN SUPPLEMENTAL BIOFUELS PROPOSAL (Brownfiels Ag News; includes AUDIO)

EPA: 5 SRE applications filed for compliance year 2019 (Ethanol Producer Magazine)

GOVERNOR REYNOLDS: ‘I’M GOING TO HOLD THE PRESIDENT TO WHAT HE SAID’ (Brownfield Ag News)

Ethanol leaders: Product worthy, but regulations a problem (Fence Post)

Collin Peterson, Amy Klobuchar criticize Trump’s new ethanol rule (Twin Cities Pioneer Press/Forum News Service)

Trump’s Impossible Biofuel Dilemma (OilPrice.com)

Senators grill Censky on accusation Trump pulled biofuels 'bait and switch' (Politico)

BIOFUELS, OIL INDUSTRY, BOTH DISAPPROVE OF RFS PROPOSAL (News Dakota)

Whitehouse: API does oil industry's 'dirty work' on climate (E&E News)

Congresswoman Axne says EPA ‘bait and switch’ on RFS unacceptable (Radio Iowa)

New rule could effect local farmers (Our Quad Cities; includes VIDEO)

Environmental Protection Agency move threatens small farms in Iowa (Des Moines Register)

Outrage over federal agencies’ biofuel mandates (WAVY)

Minnesota Democrats take aim at EPA, White House over proposed biofuels rule (Grand Forks Herald)

Farm groups slam EPA’s biofuel plan: Renewable fuel supporters say EPA’s proposal fails to keep President Donald Trump’s promise. (Farm Progress)

“EPA Reneges on Trump’s Biofuels Deal”: Shocker details emerge on US oil industry waivers (Biofuels Digest)

Farm, renewable fuel groups angered by EPA plan to replace lost demand for ethanol, biodiesel (Des Moines Register)

Ethanol Futures Tumble on EPA Fix to Offset Refinery Waivers (Bloomberg)

Trump's latest plan to boost ethanol miffs both corn groups and the fossil fuel industry (The Hill)

THEIRS: SD ethanol facing challenging times (Rapid City Journal)

Cal Dalton: The EPA must honor Trump's promise to put biofuels back to work (The Cap Times)

PETERSON STATEMENT ON NEW BIOFUELS RULEMAKING (Office of Representative Colin Peterson (D-MN 7th)

EPA FACES PRESSURE OVER RFS REWRITE: (Politico's Morning Energy)

Siouxland ethanol industry reeling from oil refinery exemptions, trade wars (Sioux City Journal)

Amid impeachment inquiry, Iowa Republicans show support for President Donald Trump (Des Moines Register)

USDA deploys officials to defend ethanol policy, relocations (E&E News)

Missouri biofuel industry wades through policy, trade challenges (Associated Press/Kenosha News)

Refinery waivers cut into E15’s 2019 expansion (Associated Press/Kenosha News)

Murphy: Ethanol policies could hurt Trump in Iowa (Globe Gazette)

Iowa biofuels leaders put pressure on Trump administration (The Gazette)

EPA, Donald Trump come up short in plan to address renewable fuel standard waivers (Grand Island Independent)

Corn Board disappointed with new EPA, Trump plans (Columbus Telegram)

Editorial: Thumbs Up, Thumbs Down (Quad City Times)

Tariffs, trade tensions threaten growth in key US ethanol markets (AgriPulse)

More Questions than Answers on China, Biofuels Package (Farm Journal AgWeb)

Washington needs to put rural America back on track (Midland Daily News)

Nancy Pelosi visits Omaha, talks impeachment and Nebraska farmers; Pelosi spoke at a Nebraska Democratic Party fundraiser. (KETV)

Despite Trade Uncertainty, Many US Farmers to Back Trump in 2020 (Voice of America)

3 reasons farmers hurt by the U.S.-China trade war still support Trump (PBS)

Excerpts from The Hill: But farm and ethanol groups say the additional details released Tuesday by the Environmental Protection Agency (EPA) were never part of the package they discussed with the White House.

The fine print: The formula proposed by the agency for determining how many gallons other refineries would have to blend into their fuels would be based on an average of government projections rather than the actual number of gallons small refineries received waivers for.

Reaction: "We're being told that we'll trust that the EPA will treat you better in the future when they're the very agency that has caused the crisis and the economic hardships we see today. I'm sorry, but we don't need to," said Monte Shaw with the Iowa Renewable Fuels Association.

"We had a deal with the president. We stand by that deal with the president. And today we're calling on the president to step in and get the EPA back online. Don't let the EPA undermine your policy once again, Mr. President.

"You don't have to be good at math. You don't have to be a [renewable fuel standard] policy expert ... doesn't it just make common sense that if you're going to try to account for something that you should, I don't know, base it on the real numbers?" Shaw said.

EPA push back: The EPA said their announcement did not depart from what was negotiated by the White House.

"This proposal, which EPA will be taking comment for 30 days following the public hearing slated for October 30, is the text of the agreement negotiated by President Trump, USDA and EPA that was announced on October 4," EPA spokesman Michael Abboud said to The Hill by email.

More on the criticism from farmers here.

And there are signs the proposal might already be losing political support...

DISAPPEARING ACT: The Environmental Protection Agency (EPA) removed positive quotes from Iowa's two senators from a release with the latest details on its plan to boost ethanol use -- a proposal that is now being opposed by Iowa corn growers and ethanol producers.

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When the EPA made its announcement Tuesday, it included past praise for the ethanol policy from when it was first announced in early October, a detail the agency noted.

But the online version of that press release has since been changed to remove quotes from Sens. Chuck Grassley (R-Iowa) and Joni Ernst (R-Iowa).

"That quote was for the announcement on Oct. 4," Michael Zona, a spokesman for Grassley through the Senate Finance Committee said by email before referring further questions to the EPA.

The EPA did not immediately respond to questions about why the quotes from Iowa's senators were removed from the latest announcement, nor did Ernst's office respond to request for comment.

In early October, Grassley praised President Trump for delivering a good deal for farmers.

"These are promises made and promises kept by President Trump. President Trump has made clear that he is an ally of corn and soybean farmers as well as ethanol and biodiesel producers. He is fighting for the farmer. This announcement is great news for Iowa, the Midwest and the entire country," Grassley said on Oct. 4.

Grassley's team sent a new comment on the EPA's latest proposal Wednesday morning, saying the EPA would need to ensure biofuels actually get blended into traditional fuels if farmers are to be happy with any proposal

Read more here. READ MORE

Excerpt from Brownfiels Ag News: Geoff Cooper tells Brownfield it’s baffling the EPA would use Department of Energy recommendations to calculate a three-year rolling average instead of actual gallons lost to small refinery exemptions.

“It is frustrating and head-scratching. It isn’t what we were promised, and it just seems apparent that EPA is trying to mislead us here.”

He says the reason using DOE recommendations is problematic is because the EPA has always ignored them, instead granting an amount of exemptions that was virtually double what the DOE had recommended.

“So what we’re concerned about is EPA would use the DOE recommendations as the basis for this 3-year average, and then they would kind of do what they’ve been doing the last few years at the end of the compliance year and grant 1.3 or 1.4 billion gallons-worth of exemptions. And that takes us back down under 15 billion gallons.” READ MORE

Excerpt from Ethanol Producer Magazine: Actual SRE approvals over the past three years have been significantly higher than DOE recommended SRE approvals, according to data featured in the Oct. 15 supplemental notice of proposed rulemaking.

That data shows the EPA followed DOE recommendations for compliance year 2015, providing a total exemption of 290 million RINs. There was, however, a significant mismatch between DOE recommendations and EPA approvals for compliance years 2016-2018.

For compliance year 2016, the EPA said the DOE recommended the approval of SREs equating to 440 million RINs. In actuality, the EPA approved SREs accounting for approximately 790 million RINs. Similarly, the DOE’s compliance year 2017 recommendation reached 1.02 billion RINs, far lower than the estimated 1.82 billion RINs finalized by the EPA. For compliance year 2018, for which several SRE applications are still pending, the DOE has to date recommended the EPA approve SREs accounting for 840 RIN million RINs, far lower than the 1.43 billion RINs worth of SREs already approved by the agency.

Additional SRE data is available on the EPA website. READ MORE

Excerpt from Politico's Morning Energy: EPA FACES PRESSURE OVER RFS REWRITE:Biofuel producers and farmers want the Trump administration to rewrite its proposed fix to the Renewable Fuel Standard and they're willing to take legal action if EPA goes through with its proposed supplemental blending rule, Pro's Eric Wolff reports. "People are not happy," Sen. Joni Ernst (R-Iowa), a leading defender of the RFS, said last week. "They feel that once an agreement is reached, they should be standing by that agreement."

Producers and farmers say Trump pledged he would require large refiners to blend 15 billion gallons of ethanol, even after factoring in the impact of the economic hardship exemptions EPA grants to small refiners, Eric reports. The biofuels industry said administration officials led them to believe that the number of gallons assigned to large refiners would be a three-year rolling average of total exemptions, which would make the system self-correcting: If EPA gave out a lot of exemptions, they would be forced to reassign more gallons in future years.

Excerpt from Des Moines Register: But inside the barn, which was covered in decorative lights and prominently featured an Iowa flag on one wall, Republicans previewed their messaging on Trump ahead of the 2020 election.

(Republican Senator Joni) Ernst described to about 100 people how she had worked with Iowa leaders to urge the president to restore the market for billions of gallons of renewable fuel waived through small refinery exemptions. The full impact of Trump's latest deal remains unclear to some farmers in Iowa.

Ernst, who is seeking reelection next year, said she spoke to Trump by phone on Friday, hours before the nighttime event at a farming property in Fairfax, located near Cedar Rapids.

"I said, 'I want to thank you again, Mr. President, for working on this ethanol issue for us,'" she recalled.

As Trump faces an impeachment inquiry, Republicans in Iowa are praising the president for his work on ethanol, the economy and trade negotiations between the U.S., Mexico and Canada.

But even some of those topics are complicated. The Environmental Protection Agency proposed recently a plan that appeared to backtrack on the agreement with Iowa agriculture leaders. Some have now warned that Trump will lose rural voters if he doesn't secure the deal.

Iowa Gov. Kim Reynolds, who started a four-year term in January, was part of the three-person discussion inside the barn that included Ernst and Republican Party of Iowa Chairman Jeff Kaufmann. Reynolds noted that Trump's administration has visited Iowa frequently, including Vice President Mike Pence earlier this month.

"This administration is the most accessible administration that we have ever seen," Reynolds told the audience.

In describing her work with the president, she added that she wished more people could interact with him.

"He does listen, and he is very informed about the issues," she said.

Impeachment did not come up in the Friday night event. But in an interview later with the Des Moines Register, Kaufmann recalled the impeachment of former President Bill Clinton in the 1990s. The college professor said he still remembers what he told his students at the time.

"I said, 'Folks. Don't get excited about this. Bill Clinton is not gonna be convicted,'" he said. "And I would say the same thing: 'Folks. Don't get excited about this. Donald Trump is not gonna be convicted.'"

Kaufmann's based his prediction in part on what he said is Trump's transparency in sharing information about a July phone call that is at the heart of the impeachment inquiry.

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State Sen. Dan Zumbach, a Republican farmer from Ryan who is facing reelection in 2020, said he's focusing on how the president's actions impact agriculture. He said his constituents are asking about farming and trade, not the impeachment inquiry. READ MORE

Excerpt from PBS: America’s farmers have borne the brunt of China’s retaliation in the trade war that President Donald Trump launched in 2018.

One reason: China is the biggest buyer of many U.S. agricultural products, such as soybeans, grain sorghum, cotton and cattle hides, which made these products an obvious target for retaliatory tariffs.

The other related reason is more strategic: China hoped inflicting economic costs on U.S. farmers – who voted overwhelmingly for Trump in 2016 – would in turn put pressure on the president to end his trade war.

Although farmers have lost billions of dollars in exports, China’s strategy hasn’t created the intended effect, with surveys of farmers continuing to show strong support for the president.

We conducted our own survey of corn and soybean farmers. Published in October, it suggests three reasons farmers support Trump’s trade policies despite the costs.

Easing the pain

Undoubtedly, China’s retaliatory tariffs on almost all U.S. agricultural exports, most notably soybeans, feed grains and pork products, have been painful for farmers.

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But the Trump administration’s efforts to ease their pain have paid off. The administration gave soybean, sorghum and other farmers $12 billion in assistance in 2018, which the vast majority of our survey participants found useful.

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Long-term gains
We also found that farmers largely view the trade disruption as short-term pain for long-term gain.

While only 14% think their farm operations will be better off financially a year from now, more than half said they expected something good to ultimately come out of the trade war. And about 44% said they believe the U.S. economy will be stronger in three years.

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Frustration with China

Finally, we found a growing frustration with China’s erratic buying behavior.

For example, China shut out U.S. beef for 14 years over a mad cow scare in 2003, keeping the ban more than a decade after other countries like Japan and South Korea lifted theirs.

Chinese purchase of products such as distillers grains or corn sometimes just disappear. These may have been offshoots of adjustments China made to its corn support policy, but, from the perspective of U.S. farmers, Chinese demand for certain U.S. agricultural commodities has been annoyingly inconsistent.

Although we didn’t ask survey participants a specific question on this topic, many farmers provided their own unsolicited comments that voiced this frustration.

“The Chinese do not play by the rules,” one Illinois farmer said. “They cancel shipment orders that are not in their favor. They continue to steal our patents. Only President Trump has tried to stop these unfair trade practices.”

Or as a farmer from Minnesota explained: “China imposed the tariffs and refused to buy soybeans in an attempt to hurt our agriculture and get us to turn against a president they do not want. They have been stealing technology and jobs for too long and giving us back inferior goods. Prior to this, they manipulated our markets by buying and then canceling or refusing shipments of grain.”

The possibility of relief

Our survey showed that most farmers recognize that they will continue to be the biggest victims of the U.S.-China trade war and will likely lose markets – some permanently – as China diversifies away from American producers.

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Yet 56% still said they supported imposing tariffs on Chinese products, while only 30% oppose them. READ MORE