WASHINGTON – In the final Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, the U.S. Environmental Protection Agency (EPA) today relaxed fuel economy and greenhouse gas emissions standards for model year 2021-2026 passenger vehicles.
When the rule was initially proposed a year and a half ago, National Farmers Union (NFU) urged EPA to incorporate greater access mid-level ethanol blends as a way to boost octane and increase vehicle efficiency. Despite widespread support from automakers and retailers for a higher minimum octane level for gasoline, the agency ultimately decided against the change. Additionally, EPA declined to adopt new incentives for the production of flex-fuel vehicles (FFVs) because such incentives were deemed outside the scope of the rulemaking.
NFU President Rob Larew issued the following statement in response to the rule:
“This news could not come at a worse time for American farmers and rural communities. Over the last several years, demand for billions of gallons of homegrown biofuels has been obliterated by the misappropriation of small refinery exemptions to oil corporations. And now a global pandemic has decreased demand further, bringing ethanol prices down to a record low. As a result, some ethanol plants stopped buying corn, while others have halted production altogether, costing family farmers millions of dollars and rural communities hundreds of good jobs. In the midst of these difficulties, the EPA’s lack of support for the American biofuels industry is a huge disappointment.
“But farmers aren’t the only losers here. Mid-level blends of ethanol offer a variety of benefits, including air emissions reductions, improved vehicle efficiency, and greater energy security. By failing to support such blends in the final rule, the EPA is doing a great disservice to American drivers as well as undermining efforts to improve air quality and mitigate climate change.“
DDgs & the Albion plant closing, ethanol, how long will all this last, will the corn market react. A lot of stuff we haven’t had to deal with before. Planting attentions report out tomorrow. Has it been overlooked? Self-isolation looked forward to for spring planting. Weekly export numbers. Beans have had some positive news to start out the week. South American Ports & COVID-19. Dollar movement how will that effect the trade. Cattle didn’t trade limit down on the day-so that’s a positive. Hogs unfortunately went lower on expanded limits.
U.S. fuel ethanol producer and refiner Valero is shutting down two of its ethanol plants, one in Nebraska and the other in Iowa. They’re also declaring “force majeure” on shipments for dried distillers’ grains or corn purchases, which means they won’t be able to meet contracted demands because of unforeseeable conditions.
The force majeure is because of a lack of storage availability for corn or ethanol as demand for fuel drops and storage remains limited due to the excess supply. The coronavirus outbreak is causing Americans to drive considerably less than usual, so the low demand and excess supply are forcing Valero to close plants in Albion, Nebraska, and Albert City, Iowa.
An Independent Commodity Intelligence Services website article says the supply of fuel ethanol remains ample while some producers are switching to industrial ethanol production as demand from that sector continues to climb. The state of the summer driving season is also uncertain, which is limiting fuel demand. The peak demand for fuel ethanol is during the summer.
Fuel ethanol demand is almost cut in half as the people who account for 45 percent of the overall demand are currently on stay-at-home-orders in the U.S., with those order numbers continuing to climb.
What is the current situation in the corn and soybean markets?
Do you think the worst of the Coronavirus is behind us? What could the signal that Coronavirus’s impact on the market is coming to an end? What does it take for the crude oil market to go higher?
How concerned are you about the ethanol Industry? Do you think today’s move higher in the markets means we are going higher from here? Do you think the short-term lows are in the corn and soybean markets? How much lower do you think we can go? What are some surprises the could help the corn and soybean market go higher?
WASHINGTON, D.C. – This week, Rep. Cindy Axne (IA-03), a member of the House Agriculture Committee and the House Biofuels Caucus, joined a bipartisan letter to President Donald Trump urging his administration to forgo an appeal of the 10th Circuit Court’s decision that invalidated three Small Refinery Exemptions (SREs) under the Renewable Fuel Standard (RFS).
The letter, signed by more than 20 members of the House Biofuels Caucus, also criticized the Environmental Protection Agency’s (EPA) abuse of these exemptions.
“EPA’s rampant and inappropriate use of SREs in recent years has reduced demand for American biofuels and weakened the RFS. We ask that you direct EPA to respect the unanimous court decision by applying its ruling nationwide and end the agency’s destructive interpretation of the RFS,” the lawmakers wrote. “Farmers and biofuel producers are hurting as a result of decisions made by EPA and action by your office is needed to uphold the law in a fair and consistent manner.”
Biofuel producers and farmers are facing increasing pressure as margins have become unsustainable due to the ongoing oil price war between Russia and Saudi Arabia and plummeting demand due to the outbreak of COVID-19.
In January, the 10th Circuit Court handed the biofuels industry a major victory by ruling that EPA exceeded its authority by inappropriately granting new SREs from RFS blending requirements. The Administration has indicated that it is considering an appeal of the 10th Circuit’s decision. Biofuel and agriculture groups are urging the Administration to let the ruling stand, as nationwide application of this ruling would boost biofuel producers and commodity growers across the nation.
The text of the letter is below:
Dear Mr. President,
As members of the Congressional Biofuels Caucus, we write to express our concern with reports that the Environmental Protection Agency (EPA) is considering an appeal of the unanimous 10th Circuit Court decision in Renewable Fuels Association et al. v. EPA. The 10th Circuit Court held that EPA exceeded its authority by inappropriately granting refiners free-standing Small Refinery Exemptions (SREs) that exempted them from blending requirements under the Renewable Fuel Standard (RFS), rather than granting extensions of existing exemptions as intended by Congress.
EPA’s rampant and inappropriate use of SRE’s in recent years has reduced demand for American biofuels and weakened the RFS. We ask that you direct EPA to respect the unanimous court decision by applying its ruling nationwide and end the agency’s destructive interpretation of the RFS. Farmers and biofuel producers are hurting as a result of decisions made by EPA and action by your office is needed to uphold the law in a fair and consistent manner.
European demand for denatured ethanol recently doubled. Cargill told Reuters the spike comes as denatured ethanol is an ingredient in hand sanitizers, and demand for hand sanitizers has surged in recent weeks amid the global outbreak of the new coronavirus.
The virus has spread to more than 105 countries across the globe, with more than 100,000 cases reported and 3,800 deaths, globally. The U.S. Centers for Disease Control recommends people use hand sanitizers with a minimum of 60 percent alcohol to combat the virus. However, the best precaution, according to medical experts, is regular and thorough hand washing.
A study released in September of last year reported the denatured ethanol market was projected to grow 6.8 percent in revenue by 2024, reported before the outbreak. At the time, MarketWatch said demand was low with excess supply. Since the outbreak, hand sanitizers have been quickly selling out on store shelves and online, as the global population seeks to protect itself from the virus.
America’s top biofuel and farm advocates called on President Trump to immediately speak out against reports from within the administration that the White House may bow to a misinformation campaign spearheaded by Senator Ted Cruz. The senator has urged the president to join a handful of oil refineries seeking to overturn a unanimous court decision that would halt the Environmental Protection Agency’s (EPA) abuse of Small Refinery Exemptions (SREs) under the Renewable Fuel Standard (RFS). The following joint statement was issued by the National Corn Growers Association, the Renewable Fuels Association, the American Soybean Association, the National Farmers Union, Growth Energy, the American Coalition for Ethanol, the National Biodiesel Board, the Iowa Renewable Fuels Association, and Fuels America.
“The president needs to understand that Ted Cruz doesn’t care about this administration or families across the heartland who are counting on the White House to keep its promises. Just days ago, thousands of farmers rallied behind Secretary Perdue, who expressed his confidence that we had finally reached the end of a long and painful fight against EPA demand destruction. Tearing open that wound, against the advice of rural champions and the president’s own advisors, would be viewed as a stunning betrayal of America’s rural workers and farmers. We cannot stress enough how important this decision is to the future of the rural economy and to President Trump’s relationship with leaders and voters across the heartland. Ted Cruz comes back year after year with the same lies about refinery profits, disproven over and over by economists, the EPA, and even by Big Oil. We urge the president to stand up now against this misguided effort to torpedo the rural recovery.”
Days ago, more than 20 farm and biofuel groups, including the American Farm Bureau and the National Farmers Union, also sent this letter asking President Trump to reject “an appeal of the court decision, given the clarity, unanimity, and strength of the ruling.”
What are the drivers of the markets at this time? What do you think the USDA Outlook Forum is going to say? Why is there such a big difference on opinions on market direction? Any updates on the Phase One Trade deal? How does the demand from the ethanol industry look?
Kansas Corn is partnering with Renew Kansas to host the Kansas Corn-Fed Ethanol Seminar. Happening on March 4 at American Ag Credit, 4105 N. Ridge Rd., Wichita, this seminar will provide attendees with updates and learning opportunities covering a broad view of the ethanol industry.
“With nearly one-third of Kansas corn going directly into ethanol production,” said Kansas Corn Director of Industry Relations Stacy Mayo-Martinez. “It is important for those in the corn and agriculture industry to understand the market, the opportunities and the hurdles to better grasp how it affects Kansas corn prices. This is a unique learning opportunity and we are proud to partner with Renew Kansas.”
The seminar will explore ethanol export opportunities; barriers to increased ethanol use and connecting consumers with ethanol blends. A fuel retailer panel and an expert panel on economic impact and plant innovation will round out the seminar.
Kansas is a significant ethanol producing state producing about 500 million gallons of ethanol per year and represents a significant market for corn producers. About one-third of Kansas corn is used to make ethanol and DDGS feed, the co-product of ethanol production.
Those interested in the event can find more information and register online at https://kscorn.com/cornfedethanol/.
Kansas Corn represents corn farmers in Kansas, while Renew Kansas represents the state’s ethanol industry. For more information, visit kscorn.com and renewkansas.com