A Trump Policy Shift Gives Farmers in Key 2020 States ‘Exactly What We Wanted’

Source: By Mitch Smith, New York Times • Posted: Monday, October 7, 2019

Daryl Haack, a corn and soybean farmer from Primghar, Iowa, said the administration’s new ethanol policy was welcome news after a difficult growing season.
Jenn Ackerman for The New York Times

PRIMGHAR, Iowa — In measured but increasingly impatient tones, Midwestern farmers and politicians delivered a message to President Trump: Fix the policies hurting corn prices and prompting ethanol plants to close, or risk alienating one of the most loyal parts of your political base.

And last week, after a flurry of pressure from senators and criticism from agricultural groups, the Trump administration relented, saying that it would put forth rules designed to increase ethanol demand. The decision, which was cheered in a Corn Belt that has also been battered this year by tariffs and floods, underscored the importance of the rural Midwest to Mr. Trump’s re-election hopes and gave a boost to farmers at the end of a difficult growing season.

“It’s exactly what we wanted,” said Daryl Haack, a corn and soybean farmer from Primghar, in northwest Iowa, who supports Mr. Trump but had previously criticized his approach on ethanol.

The turnabout by the administration came amid a backlash at its decision over the summer to exempt more oil refineries from a requirement to include ethanol, a biofuel often derived from corn, in their blends. About 40 percent of the country’s corn crop goes to ethanol, and a drop in demand for the product quickly rippled through the rural economy in places like Iowa, Michigan, Minnesota and Ohio, all politically mixed states that Mr. Trump hopes to carry next year.

Since the latest exemptions were announced in August, Midwestern Republicans in Congress pressed the president to reverse course in a series of closed-door meetings, and farmers, who helped Mr. Trump sweep to victory in 2016, voiced their anger in unusually blunt terms.

Darrel McAlexander, a southwest Iowa farmer who met Mr. Trump at an ethanol plant in June, said in an interview last week that he felt betrayed by the exemptions that lessened demand for ethanol. Mr. McAlexander, a registered Republican, also wrote a pointed op-ed in The Des Moines Register.

“The president and his advisers recognized that they had a political problem and quickly sought to put the genie back in the bottle,” said Geoff Cooper, president of the Missouri-based Renewable Fuels Association, an ethanol trade group. “To hear that level of frustration and anger and angst from part of the base that had been supportive of this president really did get his attention.”

In recent weeks, six ethanol plants had closed or been idled, at least temporarily. In Winnebago, Minn., where production stopped and all but a few employees of the Corn Plus ethanol plant were laid off, that meant the sudden loss of one of the town’s three largest employers and an added expense for nearby farmers who had planned to sell their harvest there. On Monday, a representative of the plant said it was uncertain whether the new administration policy, announced on Friday, would mean production could start again.

“It’s 30-or-so less people driving through town every day, 30 less people visiting the gas station,” said Jake Skluzacek, the city administrator in Winnebago, population 1,350, where the soybean harvest has just started and the cornstalks are turning from green to brown.

Production of ethanol at Corn Plus in Winnebago, Minn., was halted earlier in the year.
Jenn Ackerman for The New York Times
The ethanol plant was one of Winnebago’s top three employers.
Jenn Ackerman for The New York Times

Even without the disruption to the ethanol market, farmers have faced a difficult year. Rain delayed planting. An ongoing trade war with China siphoned off profits. And rivers busted through levees and swallowed fields this spring, a result of extreme weather patterns that scientists have linked to climate change.

“It’s hard to make a living out here on the farm,” said Doug Jenkins, who raises hogs and grows corn and soybeans about a mile from Winnebago’s shuttered ethanol plant.

After tending to piglets on a drizzly recent morning, Mr. Jenkins said he did not expect much profit from this year’s corn and soybean crops. Some of the land he farms, overtaken by the Blue Earth River, sat empty this season. He said he expected to have to pay more to haul the corn he harvests to a different ethanol plant. And his investments in the shuttered Corn Plus facility, once a source of reliable income, were now worth much less.

But Mr. Jenkins said he did not fault the president for his problems, even before the administration’s shift. Ethanol waivers for small oil refineries were granted by the Environmental Protection Agency — whose leader is appointed by the president — but not Mr. Trump himself, he said.

“The liberals and media want to blame everything on Trump,” said Mr. Jenkins, a Republican who plans to vote for the president again next year. “My opinion is the E.P.A. did this and I think it has very little to do with the president.”

Doug Jenkins, who raises hogs and grows corn and soybeans, stood in a grain silo.
Jenn Ackerman for The New York Times

Since the start of his term, Mr. Trump has had to balance the conflicting wishes of two supportive constituencies — workers in the agriculture and oil industries — in developing his ethanol policies. Farmers generally want more ethanol in the fuel supply, while those in the oil industry often bristle at higher ethanol mandates.

Earlier this year, Mr. Trump received praise from farmers for taking steps to allow E15, a gasoline blend with 15 percent ethanol, to be used year-round. But his administration has also frequently exempted small refineries from requirements to blend ethanol into their fuels.

Under the proposed rules announced by the administration on Friday, the E.P.A. will seek to expand to 15 billion gallons the amount of ethanol blended into the fuel supply, starting in 2020. The announcement also called for easing the process for selling E15 and expanding the export market for ethanol.

The Trump administration’s new approach on ethanol followed weeks of pressure on the administration from elected officials in the Midwest and warnings from some farmers that their support for Mr. Trump next year was not assured.

As those negotiations stretched on, and as more ethanol plants stopped operations, Representative Rodney Davis, Republican of Illinois, introduced a bill targeting the exemptions. Senator Joni Ernst, Republican of Iowa, spoke repeatedly about the issue with Mr. Trump. And the governors of Minnesota and South Dakota — one a Democrat, the other a Republican — sent a joint letter to the president asking him to reconsider his approach.

Finally, on Thursday evening, not long after corn farmers and ethanol industry officials held a conference call pressing their case with reporters, the White House organized a call of its own to tell agricultural groups and politicians that a deal had been reached.

The next morning, as news of the announcement spread, so, too, did relief among farmers.

With the state of the farm economy, any viable market for grain producers is key,” read a statement issued by Representative James Comer, Republican of Kentucky.

Mitch Smith covers the Midwest and the Great Plains. Since joining The Times in 2014, he has written extensively about gun violence, oil pipelines, state-level politics and the national debate over police tactics. He is based in Chicago.  @mitchksmith