The key to improving the farm economy and raising grain prices is not trade, but renewable fuels. Jeff Broin, with POET, says farmers must stop thinking of themselves as food producers but think of themselves as energy producers as well, “Farmers have thought of themselves as food producers, but today they need to think of themselves as food and energy producers.”
Broin claims the ethanol sector can single-handedly fix the farm economy, “Other countries have gotten very good at producing grain, especially during times of high corn prices, so we have a lot of competition out there today. The U.S., however, can process that corn we are growing into biofuels that we use here at home and even export.”
He points out that, in the past as surpluses have grown, it has been the biofuels sector that has used up the surplus. If ethanol demand can continue to grow, it can increase demand even more than growth in exports. “Ethanol can generate 2 billion bushels of annual demand and that is equal to total U.S. exports, and this would be new demand,” he stated.
Broin expects the EPA to finalize the rule on E-15 by June which will lead to a big jump in corn demand in the second half of 2019. “It will create 7 billion gallons of new ethanol demand which is equivalent to 2 billion bushels of corn,” he said. “This will help reduce world corn stockpiles that currently stand at 20 billion bushels.” He added this has the potential over the next few years to correct the current surplus of grain we have in agriculture.
Broin said agriculture needs to unite to take control of the fuel tank away from the oil industry.