Arguments Go Off the Rails When Tying Ethanol Policies to Russian Invasion of Ukraine

Source: By Chris Clayton, DTN Ag Policy Editor • Posted: Tuesday, March 15, 2022

Focusing on the energy debate, U.S. ethanol production has the capabilities to offset the loss of Russian oil imports. That was a repeated theme last week at Commodity Classic. The capacity of the country’s 208 operating ethanol plants is large enough to add at least another 1.5 billion gallons of liquid fuel into the supply stream. Allowing year-round E15 and converting one-third of all fuel pumps to E15 would fill that gap.

Frum wrote any benefits of ethanol over gasoline “are nullified by ethanol’s terrible toll on world food output.”

He dismisses, discounts or doesn’t consider the 22.2 million tons of distillers dried grains, of which about half are also exported, that come as a byproduct from ethanol production.

Frum concludes that “If food-importing nations in Asia and the Middle East could be assured that more American wheat, barley, and sunflower oil would be headed their way in 2023, and more corn would be available for animal feed rather than burned up as automobile fuel, wiser U.S. farm policy could even help consolidate global support for Ukraine.”

Yet, Frum negates to mention that the U.S. also is the world’s largest corn exporter, expected to ship out 2.5 billion bushels for animal feed and other uses in the 2021-22 crop. The closest U.S. competitor on corn is Brazil at just under 1.7 billion bushels exported. Ukraine is a big player in this space as well and would be in a normal year expected to export about 1 billion bushels of corn as well.

Having mentioned sunflower oil, Frum overlooks 2.09 billion bushels of soybeans — 47.5% of the crop — that will be exported as well as an additional 1.625 billion pounds of soybean oil. The U.S. will still carryover another 2 billion pounds of soybean oil as well.

Frum also doesn’t delve into beginning stocks or ending stocks of crops. U.S. wheat producers and grain elevators will carry out 653 million bushels as well, or roughly one-third of total usage of wheat. The 653 million bushels of U.S. ending stocks would make up about three-quarters of the lost global exports from Ukraine. According to USDA, the U.S. will carryover the largest ending stocks of any of the major global exporters. Russia is second.

In corn, the U.S. right now is projected to carry over 1.44 billion bushels from the 2021-22 corn crop, or about 9.6% of total use. The U.S. again has the largest expected ending stocks of any of the world’s largest corn exports as well. Nobody else comes close.

Frum didn’t have the capacity in his article to highlight other energy subsidies, but he champions that “North American oil and natural gas can carry the world through the transition to an energy future based on wind, sun and the atom.” While advocating for increased reliance again on fossil fuels, Frum’s piece gives a distorted, oversimplified picture of U.S. ethanol policy — “Ethanol has become a Washington joke.”

In the end, Frum uses a rare, generational crisis in which a global breadbasket is invaded as rationale to attack a single U.S. renewable energy policy built through a diversified set of refinery operations scattered across rural America. Frum also fails to understand that farmers and agribusinesses built the biofuels industry at least in large part as a way to diversify how farmers sell their commodities to stay in business.

The Atlantic: “The U.S. Subsidy That Empowers Putin”…

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