Last week was the annual Kansas Commodity Classic, for which corn, soybean, wheat and sorghum farmers gather. Annual meetings are held, and officers are elected for a few of the commodity groups. Speakers are brought in to give market and weather outlooks, or to talk about a few specific policies that Kansas farmers need to monitor this year.
Probably chief on the minds of many in that room was the current situation surrounding year-round E15 approval on Capitol Hill.
Kansas Corn CEO Josh Roe updated Kansas corn growers about the situation. Pushback from small and medium refiners led to year-round E15 approval being stripped from the most recent funding package, and in its place, a committee will be created to explore its feasibility.
It wasn’t so much about E15 itself, Roe said. Rather, it was a negotiation tactic on their part to try to get something for their industry.
He said right now there is support from Speaker of the House Mike Johnson, Senate Leader John Thune and President Donald Trump after his comments earlier in the week at a stop in Iowa. The problem, he explained, is Congress is having trouble keeping the government open right now.
And getting year-round E15 into legislation that will pass is going to be tough.
Here’s the crux of the situation, as Roe put it. Year-round E15 approval could not only save an average family money, but it also would significantly increase corn demand domestically, and that would be a significant factor in domestic market demand. And it would cost the government nothing.
“The average family, the average miles they drive, if they switch from E10 to E15 at current fuel prices, even with lower fuel prices, they will save $170 a year,” Roe said. “For every 1% higher ethanol content we can move the gasoline mix in the U.S., it’s just under 500 million bushels of corn that we produce.”
Roe said unlike other farm bill programs or ad-hoc relief programs that cost the government billions of dollars, implementing year-round E15 would not cost the government a dime. It is a market-based solution that would support corn demand here at home.
When do we ever see something like that in policy discussions?
Friends, I get that there are pockets of this state where the oil and gas industry has built towns. But our state also has a lot of corn — and sorghum — to move every year. Year-round E15 is a compromise.
Remember those?
Look, we need to explore options for expanding our domestic markets. Livestock producers can only feed so much corn and sorghum. And the global trade landscape is changing, so we can’t really rely on export demand like we did a decade ago.
Now is the time to put every idea to work and build our demand here at home.