Indiana farmers react to Trump plan to restore ethanol demand

Corn farmers impacted by declining ethanol demand

FRANKFORT, Ind. (WISH/AP) — Some Indiana’s corn farmers say they are struggling as demand for ethanol declines.

But, there was renewed hope Friday that things will change after a major federal announcement.

There are 53 years of joy and hard work on Mike Beard’s Frankfort farm.

“Oh, it’s a way of life,” said Beard, president of the Indiana Corn Marketing Council, while standing in one of his cornfields, which are taller than he is.

Beard’s heart and soul are in the land and what he grows from it. But, he’s struggled the last few years. He’s put off buying equipment for harvesting and planting that they need.

“We have to defer some opportunities because we don’t have the income to support them.” Beard said.

The reason why has to do with the fuel motorists buy at the pump. We’re talking ethanol. Ethanol is made from corn that grows on farms like Beard’s.

“It’s a clean burning fuel. It’s a very efficient fuel. It’s a renewable fuel,” said Steve Howell, director of allied industry affairs for the Indiana Corn Growers Association, the Indiana Soybean Alliance and the Indiana Corn Marketing Council.

The federal government has a standard requiring up to 15 billion gallons of renewable fuels, including ethanol, be blended into the nation’s fuel supply.
This summer, the U.S. Environmental Protection Agency granted exemptions to dozens of oil companies, which means they don’t have to use the ethanol.

“The exemptions has had a negative impact on the corn demand and corn growing we see here in Indiana.” Howell said.

The exemptions have had a big local impact.

“The Cloverdale (biofuels) plant shut down as a result of the decreased demand of ethanol and the decreased profitability of the plant.” Howell said.

The Indiana Corn Grower’s Association and several states including Illinois, Michigan, Ohio and Kentucky sent a letter to President Donald Trump. The letter asked him rethink those exemption waivers.

On Friday, the Trump administration announced its plan to implement new rules that will increase demand for ethanol, reversing the decline caused by exemptions.

“It’s great to know that the president has our back.” Howell said.

The farmer in Frankfort, Beard said, “That gives us some stability in our income.”

The Indiana Corn Growers Association said it’s going to wait, watch and see how the EPA announcement unfolds in the coming months.

The proposal announced Friday follows months of complaints by Midwestern farmers, politicians and the ethanol industry that the federal government’s granting of waivers to refiners had violated federal law and forced some ethanol plants to close. Roughly 40 percent of U.S. corn is used to produce ethanol, so declining demand for the fuel additive can depress prices for the grain.

Although the proposal by the EPA and the U.S. Department of Agriculture would not address the current loss of ethanol demand, it would ensure that beginning in 2020, the government would comply with the 15-billion-gallon standard already required under federal law.