Several members of the Iowa Corn Growers Association and Iowa Soybean Association spoke directly with U.S. Secretary of Agriculture Sonny Perdue when he was in Iowa on Sept. 3 to survey crop damage. They talked to Perdue about assisting farmers who are suffering from the devastating drought and the derecho windstorm that has impacted most of the state in 2020. The ICGA and ISA farmers presented several ideas for immediate financial relief.
In addition to drought and derecho concerns, farmers are frustrated that the Trump administration is again considering dozens of requests by the oil industry for small-refinery exemptions from complying with the Renewable Fuel Standard. Last year those exemptions cut billions of gallons from the amount of ethanol and biodiesel the oil industry is required to blend into the nation’s fuel supply.
“Iowa farmers wish they didn’t have to request government assistance, as they’d rather have a crop to harvest and have market access,” said ICGA President Carl Jardon, a farmer from Randolph in southwest Iowa. “Unfortunately, that is not our reality this year with natural disasters, trade disputes and a global pandemic on top of waiting to hear the outcome of President Trump’s promise to speak with EPA Administrator Andrew Wheeler about the refinery waivers. Iowa farmers need immediate aid so they can begin to rebuild for next year.”
RFS waivers hurt biofuel use
About 10% of the motor fuel used in the U.S. is ethanol. Roughly half of Iowa’s nation-leading corn crop goes to produce ethanol. Trump won praise from farmers in 2019 for approving year-round use of gasoline with 15% ethanol, but that move was overshadowed by the Environmental Protection Agency’s approval of 85 small-refinery exemptions. The biofuel industry says the exemptions have cut an estimated 4 billion gallons of renewable fuel demand since 2016.
This year EPA has almost 100 more requests even after a federal appeals court ruled in January that EPA had exceeded its authority in granting certain exemptions.
Soybeans use to produce biodiesel is also hurt by EPA granting small-refinery waivers. “USDA has supported Iowa farmers and helped us manage during the worst of times with much-needed disaster assistance,” said Iowa Soybean Association President Tim Bardole. “This approach stands in stark contrast, however, to the EPA and its continued mishandling of the Renewable Fuel Standard.”
Bardole says EPA’s consideration of granting another 98 refinery exemptions to the RFS “is wrong and couldn’t come at a worse time.” Such action, says the farmer from Rippey, would multiply the damage to Iowa’s biodiesel and soybean industries at a time they can least afford it. “Our farm was in the path of the derecho so our economic outlook for this growing season is bleak,” he adds. “Granting more illegal RFS waivers to oil companies will drive biodiesel production lower and turn the economic situation for farmers like me from bad to worse.”
Halt approval of RFS waivers
The Iowa Biodiesel Board (IBB) calculates the RFS accounts for 13% of the market value of a bushel of soybeans — or nearly $1.15 in today’s market. “That’s an economic return Iowa farmers can’t afford to lose, especially when picking up the pieces after a natural disaster and continued trade friction with top international buyers of U.S. soybeans,” Bardole says.
Bardole implored Perdue to join Trump in speaking with EPA and resolving the RFS waiver issue, which has consumed an enormous amount of time, energy and resources. “Trump committed to Iowa farmers that he would speak to the EPA about the exemptions and resolve the situation in favor of America’s farmers, not big oil,” Bardole says. “It’s long past time for EPA to end its delay of the annual RFS proposed rule and close the gaping hole in the statute it has created by granting small-refinery exemptions.”
IBB Executive Director Grand Kimberley says USDA plays a vital role in the RFS program, so Perdue is an ideal champion to advocate for homegrown fuels. “We’re deeply frustrated that, while USDA supports Iowa farmers and biodiesel producers with one hand, EPA directly undercuts that support with the other. It would be helpful to have both USDA and EPA on the same page.”
Let Trump, Wheeler know
Kimberley says the flood of small-refinery exemptions EPA has approved since 2017 has destroyed demand for more than a half-billion gallons of biodiesel. “That’s equal to more than a year’s worth of Iowa’s biodiesel production,” he says. “One of Iowa’s biodiesel producers was forced to shut its doors a year ago, due to the small-refinery exemptions, and others cut back production. It’s long past time to get it right on biofuels policy. We urge USDA to join farmers in putting pressure on the administration and EPA to act.”
Farmers are encouraged to contact Trump and Wheeler, asking them to immediately reject the small-refinery exemptions as invalid and illegal, and urge EPA to finalize its annual future volume obligations under the RFS. The National Biodiesel Board offers a form to email to Trump and Wheeler.
Iowa farm and renewable fuel leaders recently sent Trump a letter telling him that without action on ethanol and biodiesel, he risks losing rural voters, which are vital to his reelection bid. “Iowa may very well hang in the balance,” they wrote. Read the letter at the Iowa Renewable Fuels Association.