A downturn in the ethanol industry has a direct effect on farmers, and agriculture advocates in South Dakota say the fix lies in putting an end to special waivers for oil companies and improving trade relations with other countries.
“The industry is in crisis mode,” said Lisa Richardson, South Dakota Corn executive director.
Coronavirus kept people at home and off the roads this spring and summer, putting a damper on demand for gasoline and diesel. That’s a big deal for South Dakota farmers who produce 800 million bushels of corn – more than half of which is made into ethanol, Richardson pointed out. She worries about the excess stocks of corn, even after China made its largest corn purchase in history.
East River Electrical Cooperative hosted a panel discussion about the ag economy following the farmer’s appreciation lunch at the Sioux Empire Fair Wednesday, Aug. 5. On the panel with Richardson was Congressman Dusty Johnson, R-S.D., and Brian Jennings, CEO of the America Coalition for Ethanol.
As Congress works on its next round of coronavirus relief funding, those connected to the ethanol industry want to make sure there is funding for them. Debate continues on how to calculate for the compensation – by gallons produced or others means – but Richardson said what matters is that the money comes.
Ethanol supporters are also looking for changes in policy to improve markets for biofuels. Waivers for a small oil refineries are still an issue after January‘s lawsuit that said the Environmental Protection Agency overstepped its authority in granting exemptions to Renewable Fuel Standards.
After two rough years for the ethanol industry, Jennings was hopeful for 2020, he said. President Trump had approved year-round sales of E15 ethanol blends, and the lawsuit win pointed toward more ethanol use domestically. Jennings is also focused on foreign market for growing ethanol demand.
With 14.5 billion gallons of ethanol used domestically, the US Could stand to export more than 1 billion gallons if biofuels weren’t so disadvantaged in world trade, he said.
“It’s important we get back on track with trade, “Jennings said.
The downturn in the ethanol industry affects more than just plants making ethanol. Panelists noted the current crisis caused corn prices to fall, to the detriment of farmers in the Midwest, as well as the loss of ethanol byproducts such as dried distillers grains for livestock feed and CO2 used in the beverage industry.
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