Insight Focus
USDA forecasts record 16.7 billion-bushel corn harvest. RFA urges Congress to scrap E15 restrictions and other rules to boost ethanol demand and ease farm dependence on subsidies. Senators introduced the Ethanol for America Act to improve labelling and confirm equipment compatibility for nationwide E15 sales.
Record Corn Harvest Triggers Ethanol Policy Debate
The US Department of Agriculture (USDA) reported on August 12 that US farmers are poised to harvest a record corn crop of 16.7 billion bushels this year. The department also projected that the corn surplus will rise to its highest level in eight years, with prices set to sink to six-year lows.
Source: USDA
According to the Renewable Fuels Association (RFA), the report highlights the urgent need to remove artificial regulatory barriers that are undercutting demand and constraining market opportunities for both corn and ethanol.
“Alarm bells are ringing across rural America following the USDA report, and they should be ringing in the halls of Congress,” said RFA President and CEO Geoff Cooper, noting that this year’s crop is forecast to be nearly 2 billion bushels larger than last year’s.
“Our nation’s farmers are doing their job,” Cooper said. “They are sustainably and efficiently producing the largest corn crop in history. But antiquated policies and regulations—such as the summertime prohibition on E15, outdated pump labelling obligations, and needless equipment certification requirements—are stifling demand and failing America’s farmers.”
Cooper said that over the long term, year-round availability of E15 nationwide presents a new demand opportunity for more than 2 billion bushels of corn and sorghum. “Opening the door to that opportunity now would provide a badly needed shot in the arm for farming communities across the Heartland, while also helping consumers save an additional 10 to 30 cents per gallon at the pump.”
RFA Presses Congress to Tear Down Ethanol Barriers
RFA has said the following policy and deregulatory actions are needed to help avert an economic crisis in the farm economy:
- Congress should pass the Nationwide Fuel Retailer and Consumer Choice Act, which would allow E15 to be sold year-round nationwide, without the need for ad hoc emergency waivers.
- Congress should adopt the Ethanol for America Act, which would streamline regulatory requirements related to E15 pump labelling and equipment compatibility.
- Congress and the Administration should eliminate century-old “denaturant” requirements, which obligate ethanol producers to poison their clean, renewable fuel with dirty, toxic substances. These requirements create challenges for using ethanol to make renewable jet fuel and ultimately reduce demand for corn by displacing ethanol with low-quality hydrocarbon denaturants.
“Congress and the Administration can take these simple steps to strengthen America’s agriculture sector and stave off an impending crisis in farm country,” Cooper said. “We urge our nation’s leaders to act quickly to open new market opportunities for America’s farmers by removing barriers to increased ethanol consumption.”
The USDA is forecasting that direct government payments to farmers will hit USD 42.4 billion in 2025—more than quadruple the 2024 level and the second highest ever (trailing only the USD 45.6 billion distributed in 2020, when the COVID pandemic cratered global demand for farm products).
Source: USDA
According to RFA, opening new market opportunities for corn and ethanol—like year-round E15—would restore demand-driven dynamics in the grain market and significantly reduce the need for government assistance.
Senators Unveil Ethanol for America Act
As the US ethanol industry, corn growers, and Congress celebrated the 20th anniversary of the Renewable Fuels Standard (RFS) on August 8, a group of legislators introduced the Ethanol for America Act in the Senate.
The legislation would require the EPA to revise rulemaking from 2021 to make the E15 fuel label clearer and more consumer oriented. It would also confirm the compatibility of E15 with existing underground fuel storage and dispensing equipment.
