Farmers’ loyalty to Trump tested over new corn-ethanol rules
Published 8:01 am Thursday, August 29, 2019
LACONA, Iowa — When President Donald Trump levied tariffs on China that scrambled global markets, farmer Randy Miller was willing to absorb the financial hit. Even as the soybeans in his fields about an hour south of Des Moines became less valuable, Miller saw long-term promise in Trump’s efforts to rebalance America’s trade relationship with Beijing.
“The farmer plays the long game,” said Miller, who grows soybeans and corn and raises pigs in Lacona. “I look at my job through my son, my grandkids. So am I willing to suffer today to get this done to where I think it will be better for them? Yes.”
But the patience of Miller and many other Midwest farmers with a president they mostly supported in 2016 is being put sorely to the test.
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The trigger wasn’t Trump’s China tariffs, but the waivers the administration granted this month to 31 oil refineries so they don’t have to blend ethanol into their gasoline. Since roughly 40 percent of the U.S. corn crop is turned into ethanol, it was a fresh blow to corn producers already struggling with five years of low commodity prices and the threat of mediocre harvests this fall after some of the worst weather in years.
“That flashpoint was reached and the frustration boiled over, and this was the straw that broke the camel’s back,” says Lynn Chrisp, who grows corn and soybeans near Hastings, Nebraska, and is president of the National Corn Growers Association.
“I’ve never seen farmers so tired, so frustrated, and they’re to the point of anger,” says Kelly Nieuwenhuis, a farmer from Primghar in northwest Iowa who said the waivers were a hot topic at a recent meeting of the Iowa Corn Growers Association. Nieuwenhuis said he voted for Trump in 2016, but now he’s not sure who he’ll support in 2020.
While Iowa farmer Miller saw Trump’s brinkmanship with China as a necessary gamble to help American workers, the ethanol waivers smacked to him of favoritism for a wealthy and powerful industry — Big Oil.
“That’s our own country stabbing us in the back,” Miller said. “That’s the president going, the oil companies need to make more than the American farmer. … That was just, ‘I like the oil company better or I’m friends with the oil company more than I’m friends with the farmer.’”
The Environmental Protection Agency last month kept its annual target for the level of corn ethanol that must be blended into the nation’s gasoline supply under the Renewable Fuel Standard at 15 billion gallons (56.78 billion liters) for 2020. That was a deep disappointment to an ethanol industry that wanted a higher target to offset exemptions granted to smaller refiners. Those waivers have cut demand by an estimated 2.6 billion gallons (9.84 billion liters) since Trump took office.
At least 15 ethanol plants already have been shut down or idled since the EPA increased waivers under Trump, and a 16th casualty came Wednesday at the Corn Plus ethanol plant in the south-central Minnesota town of Winnebago. The Renewable Fuels Association says the closures have affected more than 2,500 jobs.
The 31 new waivers issued this month came on top of 54 granted since early 2018, according to the association. While the waivers are intended to reduce hardships on small oil refiners, some beneficiaries include smaller refineries owned by big oil companies.
The administration knows it has a problem. U.S. Agriculture Secretary Sonny Perdue said at a farm policy summit in Decatur, Illinois, on Wednesday that Trump will take action to soften the effects. He would not say what the president might do or when, but said that Trump believes the waivers by his EPA were “way overdone.”
Geoff Cooper, head of the Renewable Fuels Association, said the heads of the EPA and Agriculture Department and key White House officials have been discussing relief, and that his group has been talking with officials involved in those conversations. He said they’ve heard the plan may include reallocating the ethanol demand lost from the exempted smaller refiners to larger refiners that would pick up the slack, but many key details remain unclear, including whether the reallocation would apply in 2020 or be delayed until 2021.