Even with a warm sun bearing down, area corn farmers are feeling a chill from a summer downturn in prices.
The drop is largely due to a decrease in demand by oil and gas refineries that have been given a reprieve from adding ethanol, of which corn is a major ingredient, to their products.
President Trumps most recent round of exemptions came Aug. 9 for an additional 31 refineries.
Since June, corn prices have fallen 21%. This is the third year in a row the Trump administration has issued the waivers at unprecedented numbers.
A federal mandate to blend ethanol into gasoline was the countrys answer in 2005 to help free us from dependency on Mideast oil.
Here in the U.S., the law also helps ease our dependency on non-renewable fossil fuels.
For their part, oil producers resent the mandate, which increases their costs. Over the almost 25 years of the program, the federal mandate to include biofuels has ballooned from 4 billion to nearly 20 billion gallons, of which four-fifths is based on corn. That is due to persuasive lobbying and the power of our venerable members of Congress, principally U.S. Senators Tom Grassley, R-Iowa, Dick Durbin, R-Ill., and Pat Roberts and Jerry Moran of Kansas.
About 38% of U.S. corn goes to the production of ethanol. Locally, many producers use Garnetts East Kansas Agri-Energy plant, which annually processes 16 million bushels of corn.
Kansas has 13 ethanol plants a $838 million industry.
But because of the mandate loophole, U.S. consumption of ethanol has dropped for the first time in 25 years.
President Trump says not to worry, that hes got a giant package just around the corner to please both corn and petroleum producers, but as yet his words hold no water.
TO QUALIFY for the ethanol exemption, oil producers are supposed to be be small-scale and prove a disproportionate economic hardship, to include a biofuel blend.
Unfortunately, the Environmental Protection Agency has not held true to the guidelines, granting oil giants such as Exxon Mobil and Chevron waivers at some of their refineries.
Since the Aug. 9 exemptions, two more refineries have sidled up to the trough. In the last three years, 63 waivers have been issued, a 61% increase. This has translated to a loss of 4.03 billion gallons in biofuel sales.
