Nebraska Corn Farmers Are Not Happy With Trump

Corn farmers have received a double-whammy from Donald Trump, and they are hurting. Not only are they continuing to be hurt by the trade war with China, but Trump has changed the renewable fuel rules which is hurting the farmers that provide corn for ethanol.

The following is a statement released by the Nebraska Corn Board.

As harvest approaches after an extremely difficult year for agriculture, many Nebraska corn farmers are outraged by the Trump administration’s lack of support for the American farmer. The Nebraska Corn Board and the Nebraska Corn Growers Association call upon the administration to fulfill its promises and to abide by the law and uphold the integrity of the Renewable Fuel Standard (RFS).

President Trump’s administration continues to erode the RFS by granting 31 unjustified refinery waivers, destroying demand for corn and ultimately choosing to bail out the oil industry rather than helping American farmers. Corn farmers are already suffering from ongoing trade disputes, uncertain weather and continued low prices.

“I’ve never experienced anything like this,” said David Bruntz, chairman of the Nebraska Corn Board and farmer from Friend. “All we’re getting is lip service. At one moment, we think President Trump is on our side, and then the refinery waivers come through. It’s truly a slap in the face. Farmers are hurting and it just keeps getting worse.”

Along with undermining the RFS, the U.S. has made little progress in trade. A new deal between the U.S., Mexico and Canada still has not been reached and tensions continue to escalate between the U.S. and China.

“Many of our corn farmers have stood with Trump for a long time, but that may soon change” said Dan Nerud, president of the Nebraska Corn Growers Association and farmer from Dorchester. “Trump needs to uphold the law and his commitment to our nation’s corn farmers by making the RFS whole and bringing trade agreements to the finish line.”

Nebraska Corn urges you to stand up for our state’s corn and ethanol industries by telling the Trump administration to stop stripping the RFS. Rural America is under attack and now is the time to act. Submit a letter to President Trump by clicking here. Submit comments before the August 30 deadline.

Republicans To Cut Ethanol Subsidies ?

A few months ago the Republicans blocked an attempt by the Democrats in Congress to abolish about $20 billion in subsidies given to the big oil companies. At the time, the Republicans said they would not agree to any kind of tax increases (and they considered eliminating subsidies to be a tax increase). Now it looks like they may be changing their minds.

Several Republicans are now talking about abolishing the subsidies for corn-based ethanol (which is about 45 cents-a-gallon). Even some Republicans from agricultural states are ready to go along with this as they hunt for new ways to cut the deficit -- like Sen. Tom Coburn (Oklahoma) and Sen. Dan Coats (Indiana). The ethanol subsidy costs the U.S. government about $6 billion a year.

It's about time for the Republicans to come up with some real cuts to the budget after increasing the deficit by nearly $400 billion a year with their tax cuts for the rich -- cuts that don't involve slashing programs that help ordinary Americans. I doubt if they can get enough of their Republican cohorts to go along with these cuts (since it would take money away from big business), but the subsidy cuts actually make a lot of sense.

There was a time when these subsidies were needed to get the ethanol industry off the ground -- to help pay for research and plant construction. That time is now over, and it is time for the industry to pay their share of taxes. There are those who think this would inhibit the production of ethanol since it would make each gallon a bit more expensive. But this is unlikely to happen thanks to the government's Renewable Fuel Standard which mandates an ethanol mix in gasoline through the year 2022.

And even if it did reduce the use of corn-based ethanol, would that necessarily be a bad thing. The use of corn to make fuel has contributed to food shortages (both for humans and animals) and resulted in higher food prices. As a nation we should be weaning ourselves off of corn-based ethanol and on to ethanol made from waste products.

However, if the Republicans actually get in a subsidy-cutting mood they shouldn't stop with corn-based ethanol. The president recently called for a $4.5 billion cut in subsidies for the big oil companies. I think that should be a minimum figure for cutting those subsidies -- I personally like the $20 billion cut the Democrats had tried to make a few months ago. After all, the big oil company profits amounted to nearly a half-trillion dollars last year, and it is obvious they no longer need the subsidies.

Far too many corporations paid little or no taxes last year due to subsidies and loopholes. It would help bring the deficit down to make them pay their fair share, and it would also help to create new jobs. Currently these corporations don't need to re-invest their profits to lower their tax bills, but if the subsidies and loopholes disappear there will once again be an incentive to re-invest much of their profit (and that re-investment will produce new jobs).

This country is still hurting from the jobs lost by the recession. It makes no sense to give the corporations a free ride while ordinary Americans are hurting.

Was Corn Ethanol A Good Idea ?

Whether they will admit it or not, everyone has known for a few years now that America (and the world) must find an alternative for fossil fuels. One of the biggest uses of fossil fuels is the gasoline that powers our automobiles.

Recently there has been a push to replace much of the gasoline with ethanol derived from corn. The rising price of oil has made ethanol very feasible. In addition, ethanol burns much cleaner and therefore produces less damaging pollution.

It sounded like a great solution. I have to admit, it even sounded good to me. Last year the United States produced 6.5 billion gallons of corn-based ethanol. But in 2007, a new energy bill up the ceiling to 15 billion gallons. It sounded like a win-win situation. Farmers get a new market for corn, and consumers get a cleaner burning fuel.

But there was an aspect that was not considered. What would it do to the food supply? The first person to express doubts was Fidel Castro. Months ago, Castro warned that this would add to world food shortages -- especially in third-world countries. But Castro is not well-liked in this country, so no one listened.

Now it looks like he could have been right. But the effect is not being felt only in third-world countries. Food prices are rising everywhere. The 6.5 billion gallons produced last year did not reduce exports of corn (for food and feed) last year, but it did contribute to rising prices because their was less corn available for bidding on.

Imagine what production of 15 billion gallons will do (and even that is only a fraction of what would be needed if we were serious about replacing gasoline).The more ethanol we produce from corn, the more the price of corn will rise -- both food and feed corn.

When food corn rises in price, it creates more demand for other grains and their price also begins to rise. When feed corn rises in price, it will also drive up the price of meat. As the prices rise, the third-world cannot buy as much and shortages will be larger. The rest of us will feel the rise in prices when we go grocery shopping.

Now this is not the only factor in the rising food prices. Higher energy costs, droughts, and the rising consumption of meat and dairy foods in many places (like China) are also contributing factors. But the production of corn-based ethanol is becoming a major factor.

Maybe it's time to rethink food-based ethanol. While those who came up with the idea didn't take it to its logical conclusion, the marketplace certainly did. If ethanol is to be a real alternative, it must be made from non-food sources.