Agriculture farmers in the U.S. have had one of the worst years in recent history. As farmers have been significantly behind on their planting schedule thanks to several weeks of terrible weather, many have chosen to opt out of farming altogether in favor of insurance payouts.
Those that have chosen to plant this season’s crops regardless of this setback are expected to see one of the smallest as well as lowest quality crops in many years.
One potential silver lining for farmers, however, has been President Trump’s move to increase the percentage of biofuel used in oil refineries.
On Thursday, Trump ordered members of his Cabinet to review the current biofuel waiver program that has exempted refineries from using biofuels, helping spur on demand for corn, to the benefit of farmers across the country.
According to Reuters, Trump has been hearing the complaints of farmers all across the country during his recent Midwest tour. After hearing these issues, the President has vowed that he will consider altering the small refinery waiver program that excepts many of these facilities from using biofuels.
“I think Trump realized he may have a political problem and told (EPA Administrator Andrew) Wheeler to fix it,” said one anonymous source familiar with the matter who was briefed on the matter and asked not to be named. Another expert who was mentioned by Reuters, Derrick Morgan, senior vice president of the American Fuel and Petrochemical Manufacturers, warned that there’s a competing factor in all this. Refineries see using biofuels as an attack on their businesses, which has effectively pitted the biofuel and petroleum lobbies against each other in trying to influence the administration. “The president has made promises to refiners, too. He promised to keep refineries competitive and he made promises to keep regulatory costs down, and we hope he keeps those promises.”
So far, the EPA has granted 35 exceptions in the year of 2017, up seven times from the previous and last year of the Obama administration. Many of those waivers weren’t for just small refinery businesses but rather those owned by major companies like Exxon Mobil and Chevron.
These exemptions represent over 2 billion gallons of potentially lost demand for biofuels. Currently, the EPA has postponed coming to a decision on the 39 pending applications for biofuel exemption filed in the 2018 calendar year.
Corn farmers have begun using new tactics to solicit the support of Trump in regards to overruling existing biofuel restrictions. The National Corn Growers Associated recently launched an advertising campaign on major networks such as Fox in an effort to gain attention. While the administration has historically been pro-petroleum, encouraging the country to move to an energy-independent stance which has resulted in the Permian Basin boom,
Trump’s move to embrace biofuel at the expense of the petroleum lobby is seen by many as a political move. As the 2020 elections loom distantly on the horizon, solidifying the support of the Midwest states remains important. As for corn farmers themselves, the increased demand for biofuels will lead to an increase in the price of agricultural commodities, specifically corn.