By Ty Higgins, Ohio Ag Net
For how much talk that has been made about the decline in soybean demand due to many factors, corn demand has held its own through the second half of 2018. That was one of the points made at last week’s Agriculture Policy and Outlook Conference, hosted by The Ohio State University.
“Ethanol is the biggest component of corn use and we have exported a lot of it, including 33% of our ethanol to Brazil this year,” said Ben Brown, program manager for the Farm Management Program in Ohio State’s College of Food, Ag and Environmental Sciences. “The returns for ethanol plants aren’t overly strong so we have seen a pullback from ethanol production, but use was good this year.”
Those ethanol plants, corn industry groups and corn farmers across the country are applauding a recent announcement by President Trump that he has asked the Environmental Protection Agency (EPA) to propose the sales of E15 ethanol, or gasoline with a 15% ethanol blend, on a year round basis. Currently the availability of E15 is seasonal. But how soon would this proposal make an impact on the usage of American corn?
“We don’t even have a rule yet and all we know now is that the President has requested that EPA puts together a proposal for E15 sales all year long,” Brown said. “We actually don’t even have approval for E15 sales over the summer months and that is an important point in this because given the political timeline and given the hurdles that this rule will have to jump, EPA will be in a hurry to have this proposal by May. Then, we will see a public comment period and very possibly some litigation. The oil companies will more than likely get mad and say that this rule isn’t legal.
“Yes, I do believe the adoption of year round E15 sales will benefit corn usage, but at least for the next marketing year it is not moving corn on my balance sheet by one bushel.”
Even if the year round E15 proposal from EPA does become law, the challenges of logistics could remain.
“The next step would be to get the local gas station on the corner to offer E15 during the summer months,” Brown said. “Renewable Identification Number (RIN) prices are low right now and so getting funds in place to build an E15 infrastructure will be an issue.”
Overall, Brown sees the possibility of E15 sales all year as a positive sign for corn use, but patience will be needed by all involved.