Iowa farmers and rural communities are facing another round of uncertainty this fall. Low commodity prices, trade wars, new small refinery exemption (SRE) waivers, and the potential for an early freeze are threatening to put Iowa farmers out of business and thousands of Iowans out of work.
It’s also bad news for Iowa’s economy overall. According to the Iowa Renewable Fuels Association, the biofuels industry generates $2.5 billion of income for Iowa households and more than 48,000 Iowans have a job tied to renewable energy.
Unfortunately, we’re already seeing the devastating results of the turmoil in our farm economy.
Earlier this summer, an ethanol plant in western Iowa was forced to shut down. Last month, the Siouxland Energy ethanol plant and W2 Fuel biodiesel plan both shut down production, which puts more jobs at risk and lowers demand for crops.
POET Energy, which operates seven biofuels plants in Iowa, also announced this summer that they are scaling back ethanol production because of the huge increase in SRE waivers approved by the Trump Administration. They said the largest drop in production will occur here in Iowa and are reducing corn processing overall by 100 million bushels.
Last year, US ag exports to China dropped by 50% and now China is threatening to ban all agricultural imports from the United States.
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With sinking commodity prices and trade wars mounting up to big losses for farmers, John Deere is putting 150 workers in the Quad Cities on an “indefinite layoff” starting in October after scaling back production by 20% earlier this year due to low demand. That means fewer jobs for Iowans in communities around Waterloo, Dubuque, Ottumwa, and the Quad-Cities.
Instead of opening markets and raising demand for crops and biofuels, the only action from the Trump Administration so far has been federal bailouts, which is just a short-term band-aid approach. While the infusion of cash directly to farmers will mitigate some losses, farmers and our local economy need a permanent, long term plan that grows trade and opens new markets for our crops.
The first step is forcing the EPA to lift the SRE waivers or at least redistribute and reallocate the lost volume of ethanol to mitigate the losses in Iowa. The EPA should also guarantee that there will be no additional SRE’s waivers for the next two years to stabilize the market.
It’s time for action to protect farmers, jobs, rural communities, and Iowa’s economy.
Rep. Bruce Bearinger (Ranking Member of the House Agriculture Committee), Rep. Todd Prichard (House Minority Leader) and Rep. Andy McKean from Anamosa, Iowa.