Trump Ethanol Moves May Be Worse for Farmers Than Soy Tariff

[jpak]

Source: Bloomberg

Based on his own back-of-the-envelope calculations, Minnesota farmer Kirby Hettver could lose tens of thousands of dollars of earnings because of President Donald Trump.

But damaging as the brewing trade war with China may turn out to be for Hettver and other American soybean farmers, he says the greater financial impact could come if Trump moves ahead with changes to the U.S. ethanol mandate, known as the Renewable Fuel Standard, or RFS.

While proposed tariffs announced by China last week would apply to about $14 billion a year of U.S. soybean exports, the RFS accounts for 38 percent of the U.S. corn crop, valued at about $21 billion at current prices. And unlike the situation in the soybean market, where other buyers could pick up the slack for a drop in Chinese demand, the undoing of U.S. biofuel laws could lead to real demand destruction.

Farmers “thought they were voting for an administration that was supportive of rural America,” and now they’re anxious, said Wallace Tyner, an economist at Purdue University in West Lafayette, Indiana.

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Read more: https://www.bloomberg.com/news/articles/2018-04-10/trump-ethanol-moves-could-be-worse-for-farmers-than-soy-tariffs

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I will hold my tongue...

[CrispyQ]

1. "A billionaire New Yorker said he'd take care of us & we believed him."

[getagrip_already]

3. who wouldn't know a kernel of corn from a soybean.....

He doesn't eat fresh foods. As far as knows, all of his food came from a factory, not a farm.

He doesn't know where ethanol comes from nor does he care.

Besides, farmers just take up land that could be used to build hotels and resorts.

[Angry Dragon]

2. Trump is an egotistical low self-esteem racist bully

[Wounded Bear]

4. Trump loves the "rural" crowd...

You know Monsanto, Cargill, Tyson, etc.

Yep he just loves those "rural" folks.

[tanyev]

5. They knew damn well he was a snake before they voted for him.

[Lionel Mandrake]

6. As bad as he is, even Trump gets it right now and then.

Making ethanol from corn makes no economic sense. It distorts the economy. The ethanol mandate diverts corn, which is a valuable food, into fuel, which we should be using less of. This is the wrong way to reduce CO2 in the atmosphere. The right way is to adopt stricter fuel economy standards, but here Trump is doing what he does best: making things worse.

[benld74]

7. Those who FALL for grifters should be called ?

Desperate
Ignorant of facts
Ignorant of the obvious
Just plain ignorant

Any other ideas??

[JustABozoOnThisBus]

8. Many owners of 50-year-old carburetted vehicles would be happy ...

... to see the end of ethanol.

[Mopar151]

22. If you understand the stuff, E-10 is fine for most uses

Even with a carburetor! It is not very stable in storage, and water makes it do wierd things. There are good addatives to deal with this stuff, and storage-stable, non-ethanol gasoline fuel is readily available for stuff that sits and HAS to start.
In "ethanol country", e-85 is readily available, and the retrofit carburetors, etc. are well developed. Old, high compression hot rods, Harleys, etc LOVE the stuff.

[paleotn]

9. I won't hold my tongue....

Galatians 6 : 7 ....For whatever a person sows he will also reap....

The words they supposedly live by. Not mine.

[3Hotdogs]

10. My hyundai car dealer has a sign that says ethanol rots hoses.

I understand it also reduces gas milage.

Are we better off without it in our cars?

[IthinkThereforeIAM]

11. If the gasohol blend is over 20% ethanol it can deteriorate some rubber hoses...

... ie, ... fuel lines. Cars designed to run E-85 are supposed to have steel fuel lines or synthetic lines from the factory that are not affected by alcohol. I have not seen of this being an issue for 10 years. Not denying it may still be an issue, though.

[nature-lover]

14. Yes

[Owl]

16. Yes

[NickB79]

17. My 2012 Prius has a warning on the gas cap

Saying nothing higher than 10% ethanol.

This is important to know, as here in Minnesota they recently started putting in a lot of 15% ethanol pumps. Some stations have 85% ethanol pumps.

[ProfessorGAC]

25. It's Not Really A Reduction In Gas Mileage

Sort of i suppose, but commercially available ethanol (denataured with soft agents) is about $2.40 a gallon. At the volumes of the blending stations, it's closer to $2.20. However, these versions of ethanol are called CDA19, which means they are denatured with gasoline. That makes them even cheaper.

So, it's actually a little cheaper than the gasoline.

What happens is that the ethanol burns to give less BTU per pound than would gasoline. So, the total energy release upon combustion of the mixture is lower.

However, the blends we buy at the gas station are 10% by volume and since ethanol is denser than gasoline, it's higher than 10% by weight. So, the difference in energy per pound is lower, but a gallon weighs a little more.

The difference in mileage is real but it's not really that much.

Secondly, there are very few synthetic materials that would be more susceptible to chemical attack from ethanol vs. gasoline. Gas is a far less polar solvent so polymers would actually be more likely to soften from that than ethanol. So, if a hose is compatible with gasoline, it would be compatible with something less aggressive like ethanol, especially by now when there has been ethanol in the fuel mixture for 25 or more years.

[marble falls]

12. So, cheetolini kills the small family farms so big international, industrial fuel farmers can buy...

those assets cheap and companies like Archer Daniels, Monsanto etc, write off whatever taxes they may have with cheetolini's big tax cuts.

If we get out the vote we can at least cut a year off the pig trough.

[keithbvadu2]

13. Not just trade wars for Trump voters

Trade war - backfire or friendly fire?

[Rural_Progressive]

15. Unfortunately getting corn out the fuel business is a good thing

The idea of using corn, one of the worst crops for conserving water or soil fertility, to make fuel out of was an incredibly stupid one from the git go. There are a number of other materials one can make ethanol out of, in fact hemp not only requires a fraction of the water it leaves the soil in better shape that it was before you harvested your crop.

This bubble was going to burst at some point anyhow. Growing corn that way we do in midwest and central US is not sustainable. Nice thing is that DonnieO will get blamed for something that needed to happen anyhow even if he is doing it for the wrong reason.

Sucks to be the naked Emperor these days.

[Hortensis]

26. Yes. Like this, some of the mayhem is not all bad.

The need to repair and rebuild should allow restructuring in ways we needed to anyway but were blocked by other power centers.

[NickB79]

18. It will ruin most of my family members, but is probably the right thing in the long term

My entire dad's side of the family are all farmers. 7 uncles and their wives, along with a few of my cousins who are working to take over their parent's land when they retire or slow down in the years to come.

None of them are currently poor, as they banked a LOT of money during the good years when crop and livestock prices were sky-high, but all of them have been losing money for several years now. All the farmers in the area have, in fact. The cost of fuel, fertilizer, seed, equipment, labor, etc, have made it almost impossible to turn a profit with corn prices where they've been for the past few years. They just tread water and take out loans from the bank against their land to get by until good times return.

They've also found another coping mechanism: they're putting more land into production to get as many bushels as possible off their land. This means they, and pretty much every other farmer in the area, are clearing woodlots, draining wetlands (often illegally) and plowing up marginal grassland/conservation land at a breakneck speed. It's a fucking disaster for the environment. The flip side is that they were doing the same thing when prices were high, because the lure of bigger profits is greater for most farmers than their desire to be good stewards of the land for future generations.

Ethanol artificially inflated corn prices to levels they never should have reached, and farmers banked big that they'd stay up there by buying more land and newer, bigger equipment. Now that prices have fallen, and may fall further, the farmers are desperately tearing their land apart trying to make the payments, the water, soil and wildlife be damned.

And at the same time, climate change is finally starting to manifest itself just like predicted, with searing droughts crippling farms in the Southwest and Texas, right where the most ardent climate change deniers live and work.

It's a clusterfuck 30 years in the making. I remember the farm crisis and drought of 1988; my dad barely managed to hold onto the farm then, and the stress of it scarred him for life. I fear what's coming could be as bad or worse. The average farmer today is far older and less flexible than the farmers back then (50 yr then vs 58 yr today).

[greatlaurel]

20. This fall is going to be a difficult harvest season, I am afraid.

When I grew up farmers listened to the Soil Conservation guys and most used at least some soil conservation practices. All the progress made after the Dust Bowl has been reversed and the loss of soil in the area where I live is shocking. The ruts in the fields after rain storms are becoming easily 6 to 8/inches deep.

Thanks for the post.

[Hortensis]

28. Your and Greatlaurel's posts are fascinating, and sad.

Reading about these things touched on in various articles just isn't the same as people describing their own families and experiences. I'm afraid I don't see how what's coming couldn't be as bad or worse for many regions, and remain that way, because of climate change. I live in Citrus County, Florida. Almost no citrus are left from various causes, and now a weakened jet stream suggests killer blasts of arctic air will no longer be rare.

[truthisfreedom]

19. Ethanol? That's booze, boys. Never trust a teetotaler. He doesn't understand,

and you can't have a beer with him.

[greatlaurel]

21. This is another action that designed to damage the economy beyond repair.

While there is a good reason to debate the wisdom of using corn to make fuel, dropping this while corn prices are already dropping to below the break even point is a recipe for disaster for rural communities which will reverberate through the entire economy in a very ugly fashion.

Plus, farmers going broke and selling their lands to the oligarchs is not going to help the economy and just concentrate wealth further in the hands of a few.

[Achilleaze]

23. Excellent points

Comrade Casino and his KGOP cronies are pissing all over farm country, and will likely provoke another tsunami of Heartland "consolidation"

Mythical archetype Farmer Green Jeans & the Mzs have been taking it in the shorts since the Farm Crisis of the 80s - now the repubes have figured a way to make it even worse.

[greatlaurel]

29. You are spot on. The consolidation of farms into bigger and bigger units is at a crisis level

The big ag corporations encourage consolidation of farming as it makes their sales much cheaper rather than dealing to a large number of mom and pop operations. The big equipment manufacturers push bigger and incredibly more expensive equipment which is easier to use when there are no fencerows, windbreaks, or conservation strips

The farmers who want to farm need to start asking themselves who are they working for, the chemical and implement companies or themselves? Spending an additional $40 an acre for pesticides to maybe get an additional 10 bushel/acre yield is not going to keep them solvent this year. Integrated pest management and cover crops could save them almost all their chemical costs, but it takes brain power and management skills and means you might have to get off the tractor 3 or 4 times a day to take a look at the soil.

One of the disasters that happened to the family farms that survived the Reagan/Bush era was the lysine price fixing conspiracy of the mid-1990's. ADM was investigated by the FBI and several of their top executives were convicted. ADM was heavily fined, but that did not help the farmers who lost their livelihoods. This conspiracy investigated under Bill Clinton, but farm country ignores all the good that was done for them by the Clinton administration.

Small to mid-size farms are the most efficient as rotation of land from pastures to cropping, proper soil conservation, cover cropping and integrated pest management all take time, effort and knowledge of someone close to the land. It cannot be done by conglomerates.

[workinclasszero]

24. They thought a filthy rich, well known liar and con man was gonna only hurt

the poor, PoC and the libs. SUCKERS!

[hatrack]

27. Paying attention now, iowa? Focusing, Nebraska? Tuning in now, Kansas and Missouri?

Or looking for more Duck Dynasty reruns?