Surprise USDA Crop Report Underscores Urgent Need to Unleash American Ethanol

August 13, 2025

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(Renewable Fuels Association) The U.S. Department of Agriculture reported today (August 12, 2025) that American farmers are expected to harvest a record-large corn crop of 16.7 billion bushels this fall, while the corn surplus is projected to rise to its highest level in eight years and prices are set to sink to six-year lows. According to the Renewable Fuels Association, today’s USDA report clearly highlights the urgent need to remove artificial regulatory barriers that are undercutting demand and constraining market opportunities for both corn and ethanol.

“Alarm bells are ringing across rural America following today’s USDA report, and they should be ringing in the halls of Congress,” said RFA President and CEO Geoff Cooper, noting that this year’s crop is forecast to be nearly 2 billion bushels larger than last year’s crop. “Our nation’s farmers are doing their job—they are sustainably and efficiently producing the largest corn crop in history. But antiquated policies and regulations—like the summertime prohibition on E15, outdated pump labeling obligations, and needless equipment certification requirements—are stifling demand and failing America’s farmers.”

Cooper continued, “The best way to boost demand for U.S. crops is to truly unleash American ethanol and open the market to higher blends. Over the long-term, year-round availability of E15 nationwide presents a new demand opportunity for more than 2 billion bushels of corn and sorghum. Opening the door to that opportunity now would provide a badly needed shot in the arm for farming communities across the Heartland, while also helping consumers save an additional 10 to 30 cents per gallon at the pump.”

RFA said the following policy and deregulatory actions are needed to help avert an economic crisis in the farm economy.

Congress should pass the Nationwide Fuel Retailer and Consumer Choice Act, which would allow E15 to be sold year-round, nationwide without the need for ad hoc emergency waivers.
Congress should adopt the Ethanol for America Act, which would streamline regulatory requirements related to E15 pump labeling and equipment compatibility.
Congress and the Administration should eliminate century-old “denaturant” requirements, which obligate ethanol producers to poison their clean, renewable fuel with dirty, toxic substances. These requirements create challenges for using ethanol to make renewable jet fuel, and they ultimately reduce demand for corn by displacing ethanol with low-quality hydrocarbon “denaturants.”
The Administration should finalize strong RFS volumes, limit small refinery exemptions, and reallocate any exempted volumes. Once finalized, the 2026 and 2027 RFS volumes proposed by EPA will help boost demand for U.S. farmers. But those gains can only be realized if the volume requirements are not destabilized with unrestored SREs. Notably, the last time corn prices were this low and the corn surplus was this high was in 2018/19, when the massive issuance of SREs destroyed demand for ethanol, biomass-based diesel, corn, and soybeans.

“Congress and the Administration can take these simple steps to strengthen America’s agriculture sector and stave off an impending crisis in farm country,” Cooper said. “We urge our nation’s leaders to act quickly to open new market opportunities for America’s farmers by removing barriers to increased ethanol consumption.”

USDA is forecasting that direct government payments to farmers will hit $42.4 billion in 2025, more than quadruple the 2024 level and the second-highest ever (trailing only the $45.6 billion distributed in 2020, when the COVID pandemic cratered global demand for farm products). According to RFA, opening new market opportunities for corn and ethanol—like year-round E15—would restore demand-driven dynamics in the grain market and significantly reduce the need for government assistance. READ MORE

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USDA Shocks the Market With Eye-Popping Corn Yields -- If USDA predictions hold true, a massive U.S. corn crop is on the way. (AgWeb)
As USDA Reports Record Corn Crop, Growers Call for Immediate Action to Increase Markets (National Corn Growers Association)
USDA Raises Record Projections for Corn Yield and Production (National Corn Growers Association)
Ethanol Blog: Predicted Record 16.7B Bushel Corn Crop Prompts Ethanol Industry's Urgent Call for E15 Expansion, 'Strong' RFS (DTN Progressive Farmer)
More Corn Shows Need for Ethanol Expansion (Energy.AgWired.com)
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August WASDE boosts outlook for 2025-’26 corn use in ethanol (Ethanol Producer Magazine)
USDA predicts increased corn production, record high corn yields (Ethanol Producer Magazine)
Crop report alarms corn growers, ethanol industry (Fence Post)
Gorgeous Corn Crop Masks A Tough Reality For Central Illinois Growers: Corn yield estimates in seven counties surrounding the community of Bloomington indicate farmers there will harvest an average crop, at best. That’s counter to what USDA predicts for Illinois yield results statewide. (AgWeb)
Corn Growers Call for E15 Legislation -- Corn Growers Point to Devastation if USDA Estimate of Record Crop Materializes (DTN Progressive Farmer)
High Yields, Poor Profits: Corn Farmers Search for New Demand to Drive Prices -- The National Corn Growers Association has issued a call to action to Congress and the Trump administration to help find demand for the 16.7 billion bushel corn crop. (AgWeb)
A Wake Up Call: RFA says demand is not keeping up with the corn supply (RFD TV; includes VIDEO)
MO farmer: more corn markets needed soon (Brownfield Ag News)
Record corn harvest: Why farmers aren’t celebrating (News Nation/MSN; includes VIDEO)
Huge crops in Corn Belt hit cash-strapped farmers with more unease (Wall Street Journal)
Corn and Soybeans Rule the American Farm. Why That’s a Growing Problem, in Charts (Wall Street Journal)
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Corn Futures Rise as Traders Shrug Off WASDE Results — Daily Grain Highlights (Morningstar)
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Rising Ethanol Demand Creating Rising Corn Prices (Hoosier Ag News)
Corn prices rise despite record harvest forecast (Indiana Public Media)
Let’s Remove E15 Roadblocks (Renewable Fuels Association/Ethanol Producer Magazine)

Excerpt from Bloomberg/Transport Topics: Cheaper Grain Welcomed by Livestock, Poultry Producers and Other Food Makers but Limits Farmers’ Spending Power and Hits Demand for Machinery -- Chicago corn futures fell to the lowest level in nearly a year after the Department of Agriculture raised its already record-large outlook for the American harvest.

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Farmers favored corn this spring in part due to the potential demand risks for soybeans, with the world’s top soy importer China avoiding U.S. crops amid the trade dispute with President Donald Trump. READ MORE

Excerpt from AgWeb: “So, we raised corn production by a billion bushels month over month, the estimate,” Vaclavik (Joe Vaclavik, Standard Grain) says. “We raised demand by about 500 million but it’s going to be tough to get to those demand numbers.”

However, corn yield was not based on field data but on satellite imagery and farmer surveys. Vaclavik says while he’s not sure if this is the biggest yield of the season, he also points out the crop isn’t in the bin yet. READ MORE

Excerpt from National Corn Growers Association: The anticipated market year average price dropped from $4.20 to $3.90 per bushel which is very close to where the December corn futures contract is now trading.

USDA projects an average cost of production for corn at $897 per acre. With a 188.8 bushel per acre yield, the average cost to grow a bushel of corn this year is $4.75. A farmer selling their corn for the $3.90 price projection-also coinciding with market prices for new crops today- is facing a $0.85 per bushel loss. This follows $0.60 per bushel losses in 2024 and $0.58 per bushel losses in 2023, marking the third consecutive year of worsening negative margins. And the outlook for 2026 is even worse.

Demand growth is the only way farmers can dig out of this economy and there are plenty of solutions. Pass national year-round E15. Enact policy that ushers in higher octane fuels. Incentivize a corn-ethanol pathway for SAF that adequately attracts industry investment. Remove foreign and domestic barriers to corn production, trade, and innovation. U.S. farmers have been promoting these actions for years – they and rural economies need action now. READ MORE

Excerpt from AgWeb: As (Jerry) Gidel and Scoville (Jack Scoville, an analyst with The Price Futures Group) scouted central Illinois corn, they saw the results of poor pollination throughout the seven counties.

“When you get in there and pull husks off the ears, we found smaller ears and a lot of tip back, and that’s really what seemed to do this crop in,” Scoville says.

“That’s how you end up getting our averages for our central Illinois tour,” adds Gidel.

Flory honed in on Gidel and Scoville’s yield estimates from three Illinois counties that show how significantly they are off this season versus last year:

Ford County: 221.5 bu/a in 2024; 207.6 this year
Iroquois County: 236 bu/a in 2024; 221.9 this year
Woodford County: 257.2 bu/a in 2024; 213.6 this year

“These three are the biggest-yielding counties you guys have seen over the past couple of years,” (AgriTalk Host Chip) Flory told Gidel and Scoville. “That is a fairly consistent reduction on top-end yields from a year ago, and it certainly makes me think that that the central Illinois crop is not going to be what it was a year ago.” READ MORE

Excerpt from Brownfield Ag News: Jay Schutte from Audrain County says corn prices are already low and while new trade deals are a good solution, negotiations can take time and not every trading partner is reliable.

“A lot of people want to talk about China, China, China. We’ve got to develop markets outside of China. Southeast Asia is one of the big places. Mexico and Canada have also been good trading partners.”

He says a more immediate solution would be for Congress to pass legislation to expand the ethanol market, not just year-round E15, but also setting a higher-octane standard.

“We’re pushing for a 95 RON, which is Research Octane Number. In the old days, when you’d step on the accelerator of your car and it would start knocking, that’s predetonation. If you have a higher RON number, that knock won’t occur. It’s a better fuel for the engine, much gentler for the engine.” READ MORE

Excerpt from News Nation/MSN: That sounds like good news, but for farmers, the surge in supply threatens to push prices down further at a time when they’re already near five-year lows.

“We’re probably looking at, if we sold at current prices, losses between $80 to $100 per acre,” said Stu Swanson, a third-generation family farmer and president of the Iowa Corn Growers Association.

Farmers weigh Trump’s trade war like they watch the weather, waiting to see how things go

This year’s record-breaking harvest is the result of a perfect storm: farmers increased their corn acreage while favorable growing conditions pushed the projected yield higher than ever.

“It’s a double whammy — we planted more and we’re getting more than we usually get,” said Chad Hart, an agricultural economist at Iowa State University.

Demand has been high, but with everybody using about as much corn as ever, it’s hard to see how total usage can rise enough to match the growing supply, Hart noted.

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The question now is what to do with it all.

Farmers sound the alarm on US-China trade war

Even a nationwide corn-on-the-cob campaign wouldn’t be enough to move the needle. Nearly 40% of corn was used for animal feed in 2023, roughly 37% went toward fuel production and about 15% was exported around the world. Cereals and food made up just 1.5% of the pie.

The NCGA has called on Congress to pass legislation allowing year-round consumer access to higher ethanol blends — a move that matters because most U.S. biofuel comes in the form of ethanol, which is made from corn starch and then blended into gasoline.

The trade association is also asking President Donald Trump to broker deals that will open new foreign markets for corn. Mexico is the biggest importer of U.S. corn, with trade totaling roughly $5.5 billion last year.

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“We might see a little bit of relief, but it’s going to be relatively muted,” said Joe Janzen, an agricultural economist at the University of Illinois.

That’s because there are so many other factors that determine grocery prices, many of which are facing upward pressure right now.

Flesh-eating screwworms can boost high beef prices

Take beef, for example. The average price of a pound of ground beef hit a record $6.25 in July — up more than 13% from a year earlier.

In theory, lower corn feed costs should make raising cattle less expensive, but a host of other factors, like tight supply and the emergence of a flesh-eating pest in Mexico, have pushed prices higher.

...

In the short term, uncertainty around President Trump’s tariffs may have boosted demand for U.S. corn, with countries front-loading their purchases to avoid higher prices down the line.

“As far as the number of bushels leaving the international markets, we will set a record this year,” Hart said.

The big question is whether that record export pace is sustainable with tariffs in effect. That issue is especially critical this year because exports are the quickest adjusting part of the demand structure, Hart noted.

Janzen thinks trade uncertainty is part of the reason corn prices are down, with expectations that exporting the crop could be more difficult down the road. If trade barriers persist, other suppliers could move in to fill the gap.

“We have competition and that competition is ready to step in and supply corn to places like China, Europe and other major destinations,” Janzen said. READ MORE

Excerpt from Hoosier Ag News: Even though USDA’s latest crop forecast says we’re going to have a record corn harvest of almost 17 billion bushels this year, corn prices here lately have been on the rise.

As of Tuesday, Sept. 16, the December corn contract closed at $4.29 1/2 per bushel, which is an increase of $0.35 per bushel since the close of trade on August 12 ($3.94 1/2 per bushel).

Seth Meyer, Chief Economist with USDA, says there are a couple of reasons why corn futures have been climbing higher recently.

“They’re pushing a lot of that corn into ethanol production. We had a record corn export program last year. And we actually reduced carryout stocks this month for the coming crop year, or the current crop year, because we raised exports.”

The U.S. Energy Department says ethanol exports were up 36 percent by the first week of September, having earlier crossed the 1 billion-gallon threshold.

Troy Bredenkamp, Vice President of Government and Public Affairs with the Renewable Fuels Association, says it’s important to continue pushing your lawmakers to approve the year-round nationwide sales E-15, in order to give a further boost to corn and ethanol demand.

“You’re going to add at least six billion gallons of new ethanol demand to the American fuel market,” according to Bredenkamp. “That certainly helps soak up a lot of this carryover, and this massive crop that’ll be coming in this fall.” READ MORE

Excerpt from Indiana Public Media: Geoff Cooper, president and CEO of the Renewable Fuels Association (RFA), said ethanol demand is a key driver. “Ethanol is helping to keep a floor under corn prices right now,” Cooper said. “We’re on pace to make a record amount of ethanol this year, which means we’re going to use a record amount of corn—about 5.6 or 5.7 billion bushels.”

The U.S. Energy Department reports ethanol exports are up 36 percent. Cooper said about 12 to 13 percent of U.S. ethanol is being exported, with growing demand from countries including Canada, India, and Japan.

For farmers, that demand is critical as they prepare for a massive harvest. Cooper said ethanol exports alone create demand for nearly 800 million bushels of corn — the equivalent of about a third of Illinois’s crop. He added that communities near ethanol plants often see stronger competition and better local prices for their grain.

Looking ahead, Cooper pointed to year-round nationwide sales of E-15 as a potential game-changer. “If Congress passed this legislation, it would open up a significant new market opportunity, reduce surplus, and positively impact prices,” he said.

Cooper added that E-15 could also help consumers, with prices often 10 to 30 cents per gallon cheaper than regular gasoline. READ MORE

Excerpt from Renewable Fuels Association/Ethanol Producer Magazine: Across America’s heartland, corn farmers have begun to bring in a record harvest—only to face some of the lowest prices in years. They’ve done their job; now Washington needs to do its part. Outdated federal rules—like obsolete pump labeling and unnecessary equipment certifications—are suppressing demand for ethanol and, by extension, undercutting a new market opportunity for our nation’s farmers.

The clearest way to boost crop demand is to expand access to higher ethanol blends, especially E15. Nationwide, year-round E15 availability could create demand for over 2 billion bushels of corn and sorghum, while saving consumers 10–30 cents per gallon at the pump. That’s why we need Congress to pass the Nationwide Fuel Retailer and Consumer Choice Act this fall, which would finally put E15 fuel regulations on a level playing field with E10.

But the need for legislative action goes beyond that. In August, a bipartisan group of senators and representatives introduced the Ethanol for America Act. This bill would require the EPA to finalize a long-stalled rule—first proposed in January 2021—to modernize E15 labeling and equipment standards. Originally proposed at the end of the first Trump administration, the rule sat idle under President Biden. It includes commonsense steps: updating or removing E15 pump labels, allowing flexibility in underground storage tank requirements and ensuring future fuel infrastructure is compatible with higher ethanol blends.

Finalizing this rule should be an easy win—and we urge policymakers and the administration to get the job done as soon as possible. In 2024, President Trump said gas stations should be able to “use the existing pumps” for E15. We agree, and recommended these steps in a recent letter to the president:

• Eliminate E15 Misfueling Mitigation Plan requirements.

• Establish a presumption of E15 compatibility for all fuel dispensers, underground storage tank systems, and hanging hardware installed after 1998. Existing equipment should be deemed compliant with applicable compatibility regulations.

• Offer safe harbor for retailers that follow EPA guidance.

• Provide technical support to help local authorities enable E15 infrastructure use.

Congress and the Trump administration can take these simple steps now to strengthen America’s agriculture sector and stave off an impending crisis in farm country. We urge our nation’s leaders to act quickly to open new market opportunities for corn and ethanol—like year-round E15. Doing so would restore demand-driven dynamics in the grain market and significantly reduce the need for assistance in the form of farm program payments. READ MORE