Trump ethanol moves could be bad for farmers

Based on his own back-ofthe-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.

The RFS accounts for 38 percent of the U.S. corn crop, valued at about $21 billion at current prices.

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, Ind.

The RFS requires oil refiners to blend ethanol, mostly made from corn, and biodiesel, derived from soybeans, with petroleum. In the 13 years since its inception, the mandate has been a key driver for grain demand.

Trump vowed his support for the RFS during campaign rallies in Midwestern states like Iowa, the leading U.S. corn grower and ethanol producer. He has repeated the pledge since taking office, and last fall ordered Environmental Protection Agency Administrator Scott Pruitt to back down on possible changes to the law.

Then in January, the largest U.S. East Coast oil refiner filed for bankruptcy and blamed the cost of complying with the mandate. That thrust the issue back onto the political agenda and spurred Trump to hold meetings — the most recent one on April 9 — in an attempt to carve out a deal between the oil and agriculture lobbies.