Farmers Pushing for Biofuels Boost to Increase Crop Demand

By Ryan Hanrahan

Bloomberg’s Kim Chipman, Alicia Diaz, Erin Ailworth, and Ilena Peng reported late last week that “after losing their biggest export market due to Donald Trump’s trade wars, U.S. farmers are now counting on the president’s support for biofuels to prevent their next crop from piling up in storage.”

“The administration is set to soon unveil a plan for how much crop-based biofuels will be blended into fossil fuels starting next year,” Chipman, Diaz, Ailworth, and Peng reported. “A higher mandate, still opposed by some in the oil industry, would create a much needed outlet for crops after tariffs hit China — the top commodities buyer simply has no orders for corn, soybeans, or wheat from the next harvest on its books, according to the USDA.”

“‘If we don’t get this done, we’ll end up with a surplus of soybeans,’ Caleb Ragland, a Kentucky farmer who is also president of the American Soybean Association, said of the upcoming biofuels mandate,” Chipman, Diaz, Ailworth, and Peng reported. “‘I can store one good crop, I can’t store multiple years.’”

“Boosting demand at home is a key priority for growers, industry groups, and some of the top agricultural commodity traders. That’s because overseas sales of soybeans from the next crop are currently running 79% below the average of the past five years, USDA data showed. Corn sales are 49% lower,” Chipman, Diaz, Ailworth, and Peng reported.

Creating More Domestic Demand Easier Said Than Done

“Creating more markets at home is easier said than done. The U.S. cattle herd is already at the lowest since the 1950s, curbing demand for crops in feed rations. That’s leaving farmers reliant on the renewable volume obligation (RVOs) — a rule that’s been controversial since being enshrined into law two decades ago to safeguard energy security,” Chipman, Diaz, Ailworth, and Peng reported.

“Farmers benefit from a higher biofuels mandate, but oil refiners have historically opposed it. Some of that has since changed as Big Oil invested in biofuels in recent years as part of their decarbonization efforts,” Chipman, Diaz, Ailworth, and Peng reported. “‘We need a robust RVO to keep U.S. soybeans a profitable business to be in,’ said Greg Anderson, who grows the oilseed in Nebraska.”

RVO Proposal to Open for Public Comment Soon

Farms.com reported that “the Environmental Protection Agency (EPA) is expected to propose new RVOs, which regulate the use of biofuels. Farmers and agricultural leaders hope these mandates will increase significantly.”

“Farm groups and companies like ADM and Bunge are requesting no less than 5.25 billion gallons of biomass-based diesel for 2026 — 60% higher than 2025’s level. They also want the ethanol mandate to stay at 15 billion gallons,” Farms.com reported.

“Interestingly, the American Petroleum Institute is also supporting this push. However, some refiners oppose the plan, citing low gasoline sales and limited feedstock supply for biofuels,” Farms.com reported. “According to the EPA, the upcoming RVO proposal has already been submitted to the White House and will soon be open for public comment.”

Trump Admin May Also Clear Backlog of Small Refinery Biofuel Waivers

Reuters’ Jarrett Renshaw and Stephanie Kelly reported that “the White House is weighing a plan to clear a record backlog of requests from small refineries for exemptions from U.S. biofuel laws, which could include approving many current applications and requesting industry input to deal with older ones, according to three sources familiar with the plans.”

“The U.S. Renewable Fuel Standard requires refiners to blend biofuels like corn-based ethanol into the nation’s fuel supply or buy renewable fuel credits, known as RINs, from those who do,” Renshaw and Kelly reported. “Small refiners can petition the Environmental Protection Agency to receive an exemption if they can show financial hardship. There are more than 160 outstanding requests for exemptions that represent potentially billions of dollars worth of tradeable credits.”

“The White House is considering granting many of the 19 requests for exemptions from 2024, and issuing a rule seeking input on how to deal with the others, some of which date back to 2016, the sources said,” Renshaw and Kelly reported. “The Trump administration sees approving some requests and delaying others as less of a shock to the multi-billion-dollar credit market than deciding on all of them at once, the sources said.”

Farmers Pushing for Biofuels Boost to Increase Crop Demand was originally published by Farmdoc.