Long-Term Trump Farm Impact Could Be Loss of Biofuel Market

March 28, 2025

Print This Article Share it With Friends

by John Greig (Farmtario) U.S. analyst says the repercussions would be many, including lower prices for feed for livestock producers -- The largest threat of the Trump administration to the income of North American farmers is not tariffs but the potential loss of biofuels as a market, says an American agriculture analyst and trader.

Joe Kerns, of Ever.Ag, told the Ontario Swine Conference that the Trump era will be painful, but will have an end.

Why it matters: Chaos in the agriculture marketplace has made decision making challenging for farmers.

“It’s tough not to start to get a little downtrodden, a little confused and confusion is going to have to be part of your game for as far as the eye can see,” Kerns said. However, he encouraged farmers to “stay out of the ditches” and get through the next four years.

“I can’t emphasize this enough. Agriculture is not the tip of the spear,” he said.

Kerns pointed to the fact that there are indications that Americans are already souring on Trump, including long-time popular Republican Chuck Grassley being run out of some of his annual listening tour sessions and large crowds showing up for rallies Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez who he called “two of the most radical left folks we’ve got in Congress.“

...

The products will continue to flow, but the distribution will be less efficient.

There will be repercussions of the Trump government’s policies for agriculture, including the potential of a large fee proposed on Chinese original and built ships docking at American ports, which could significantly reduce United States crop exports.

However, Kerns said that biofuels, which “has made us really really wealthy” in agriculture, will be gradually marched back and future uses in biodiesel and sustainable airplane fuel are much less likely to happen.

Ethanol made some sense, he said, as it can create about as much power as fossil fuel gasoline per unit. Biodiesel and sustainable airplane fuel don’t hold nearly as much potential to replace fossil fuels one to one.

The 911 terrorist attacks on the U.S. drove the introduction of biofuels, he said, as a moment in time when Americans felt threatened and wanted to reduce reliance on Middle East fuels.

Now we’re in another inflection period in history and there’s little impetus to continue the focus on biofuels.

President Joe Biden didn’t implement the 45Z Clean Fuel Production Credit before the end of his term, leaving it to President Trump, who Kerns said is unlikely to move forward with it.

Now, close to half of the U.S. corn crop goes to biofuels. Biodiesel would have provided an outlet for soybeans. Canadian companies have added refining capacity for canola with an eye on the U.S. market, but recently canola was removed from the acceptable biofuel sources.

Kerns predicted that agriculture revenues are about to plunge in the grains sector.

Agriculture’s wealth has been driven by biofuels and that’s affected the appreciation of land values in North America, he said. In Iowa, land values have increased from about $2,000 per acre 20 years ago to $16,000 per acre. Eighty-four per cent of the 30 million farmland acres in Iowa are debt free, mostly because 60 per cent of that land is owned by people older than 65 and 35 per cent is owned by people older than 75. About half of it is owned by women.

That means there’s about $302 billion worth of land wealth that hasn’t been taxed.

...

Despite the negative sentiment around crops, Kerns is optimistic for meat, especially for the pork producer audience he spoke to in London, Ont.

...

He pointed to the large increase in Canadian pork that went to Mexico during the last round of Trump tariffs. He also said the European Union’s growth is done and it is rapidly decreasing as an exporter of pork, which can creates an opportunity for Canadian pork. Lower crop prices, which means lower feed prices are expected for at least four years, he said.

“Canada is not in bad shape in a world market as we roll here,” Kerns said. “The U.S. might be doing you a favour by accident.” READ MORE

Related articles

Are U.S. corn growers benefitting from Canada’s biofuel policies? This may be an ideal time to increase domestic production of renewable diesel and biodiesel (Western Producer)

Excerpt from Western Producer: About 60 percent of the ethanol in gasoline, at gas stations from Yarmouth, N.S. to Langley, B.C., comes from ethanol manufactured in America.

Last year, Canada imported about 2.4 billion litres of ethanol. The 12 ethanol plants in Canada produced around 1.8 billion litres.

“Canada is the second largest ethanol importer in the world, and nearly all these imports come from the United States,” says a U.S. Department of Agriculture Biofuels Annual report, published in December.

The report notes that U.S. ethanol exports to Canada have doubled over the last few years:

From 2017 to 2021, Canada imported 1.2 billion litres of ethanol from America
In 2023 and 2024, imports were approximately 2.4 billion litres

...

The data suggests that U.S. farmers and ethanol producers are benefitting from Canada’s clean fuel policies.

It’s not that simple, however, as Canada doesn’t produce enough corn and ethanol to supply the domestic market.

Canada’s 12 ethanol plants can produce about 1.8-1.9 billion litres of ethanol, per year.

“It (capacity) is under two billion litres. We really haven’t added to ethanol capacity, for years,” said Ian Thomson, past president of Advance Biofuels Canada.

The biggest plants are in Ontario, but ethanol production is also scattered across the Prairies.

Lack of corn in Canada

America has a massive advantage in ethanol production, mostly because of corn.

U.S. farmers grow 92-96 million acres of corn, while Canadian acres are approximately 3.7 million.

“We don’t have a lot of spare corn kicking around. (In) Ontario, some of the corn that goes into ethanol in Ontario is imported,” Thomson said.

“The feedstock in (the Prairies) is mostly wheat, (which) is not as effective as feedstock as corn…. Even ethanol plants on the Prairies import U.S. corn for production.”

America also has advantages around the scale of their ethanol plants, population density and the distance from corn production to ethanol plants.

“The Americans just have a more cost-effective set up,” Thomson said. “You look at a state like Iowa, the (ethanol) numbers are eye popping.”

Iowa has 42 ethanol plants and the state can produce 4.1 billion U.S. gallons (15.6 billion litres) annually, says www.iowacorn.org.

...

What makes more economic sense, are regulations and policies that support the conversion of canola seed to biofuels in Canada.

“In the case of canola, we’re a canola powerhouse,” Thomson said. “(Developing) more home-grown markets for canola is a complete no-brainer. The provincial and federal governments should be tripping over themselves to ensure that we’re using more domestic canola in domestic biofuel production.”

This is the ideal time to increase domestic production of renewable diesel and biodiesel, given the threat of U.S. tariffs on Canadian canola oil and Chinese tariffs on canola meal and oil, Thomson said.

“Canada really needs a strategic, domestic canola utilization policy,” Thomson said. “Am I saying we should have protectionist, made in Canada policies? No. But in the current context with trade rules out the window… Canada has to look as to how to protect its own interests.” READ MORE