MALTA BEND, Mo. — It’s been a difficult year for Missouri’s ethanol producers due to a number of factors.
Ethanol plants near the Missouri River bottom have weathered overall demand challenges facing the industry, as well as widespread flooding that devastated thousands of acres. Chris Wilson is the general manager for Mid-Missouri Energy, an ethanol plant near here in Saline County.
“It’s been a challenging year for Mid-Missouri Energy, and I think most producers in Missouri would say the same thing,” he said. “We’ve been working on demand, and the weather has been a challenge.”
Prevent plant acres cut back on corn that could have gone to ethanol plants.
“Mother Nature wasn’t kind in the amount of moisture we received,” Wilson said. “It’ll have an impact to our company.”
On the north side of the river, Brian Pasbrig, general manager of the Show Me Ethanol plant at Carrollton, said the combination of demand and weather factors have led to adverse conditions.
“It’s probably been one of the worst years we’ve seen in the industry,” he said. “I’ve been in the industry 25 years, and it’s arguably as bad as I’ve seen it.”
Pasbrig said last year’s drought in Missouri hurt production this year, and the widespread flooding near the plant will cause continuing supply issues.
“We don’t see things returning to normal till harvest next year, providing we get a normal corn crop,” he said.
Geoff Cooper, president and CEO of the Renewable Fuels Association, said small oil refinery exemptions from the Renewable Fuel Standard (RFS) have been an obstacle for domestic demand.
“The amount of ethanol blended with gasoline has actually been slipping in recent years,” he said. “The Trump administration has been excusing oil refineries from their blending obligations. Roughly one-third of refineries have been excused from their ethanol blending obligations under the Renewable Fuel Standard.”
But Cooper said the early October announcement of a proposed biofuels package intended to address the damage caused by RFS refinery exemptions shows the administration has been paying attention to the concerns of rural American and the ethanol industry.
“Starting with the announcement that happened last week, the president directed the EPA to take steps to make sure those exemptions that are given to small refineries don’t undermine the RFS,” Cooper said.
Pasbrig said the refinery waivers have had a negative effect, and he is hopeful for a good revision to the rule.
“That’s been just devastating,” he said. “They say they’re going to address that now. That’s good news, but now we’re going to wait and see.”
Wilson said the details will be key.
“Really what we received was a commitment from the Renewable Fuel Standard to follow the law as it was written,” Wilson said. “… The concern that I have, the devil’s in the details. There’s some of us that are cautious. We don’t want to claim a victory until we see how the rule is written.”
Cooper said the Renewable Fuels Association wants the RFS upheld.
“The bottom line, we want to make sure that the volumes that Congress specified to be blended are upheld,” Cooper said. “We want to make sure the law is followed.”
The Missouri Corn Growers Association thanked Trump for “following through on his promise to correct the small refinery exemptions erroneously granted by the EPA,” Mike Moreland, president of the Missouri Corn Growers Association, said in a news release.
“It’s no secret corn farmers need every possible domestic and international market for our grain. We’ve worked hard to build an industry that not only provides drivers with a high performance, cleaner-burning renewable fuel, but also provides a local market for our corn,” he said.
Moreland said the goal is the continued implementation of the Renewable Fuel Standard.
“We weren’t asking for a deal,” he said. “We were asking the EPA to follow the law and uphold the federal Renewable Fuel Standard. We will continue to do our part to ensure that happens as additional details are made available.”
Wilson said growing domestic demand has met challenges.
“It’s taken our industry 10 years to get from 10% to just be able to sell 15%,” he said.
Increasing exports will be crucial to growing ethanol demand.
“There’s been a lot of focus, continued focus, on growing our export demand,” he said. “Unfortunately for me, that seems to be the best outlet where we can grow it.”
Cooper said trade disputes and barriers have hurt ethanol exports and demand.
“In the export market we’re seeing some barriers to trade,” he said. “We’re down 10 to 15% this year (in ethanol exports).”
Brazil had been the top ethanol export market, Cooper said, but that has declined due to tariffs. He said China was another key ethanol export market, but the flow of U.S. ethanol there has stopped with trade disputes and tariffs.
Cooper said the six ethanol plants in Missouri remain in operation, but 18 plants nationwide have shut down, either permanently or temporarily. He said losing an ethanol plant means losing a corn market, lowering the local corn price as reflected in the basis, costing local jobs and the related economic impact, and taking away distillers grains for local livestock producers.
Overall, Wilson said the success of ethanol plants is important for communities.
“It’s a huge impact for the local community,” he said. “We buy 20 million bushels a year from local growers.”
Mid-Missouri Energy has been open for 15 years, employing 40 people, Wilson said.
“Ethanol plants do have a large footprint in their local communities,” he said.
Pasbrig said ethanol plants have been success stories for their communities and regions, providing a corn market with local ownership and adding to the fuel supply.
“I don’t think the ethanol industry has done a great job of promoting and celebrating,” he said.