By EMMA HOPKINS-O’BRIEN

Indiana Correspondent

INDIANAPOLIS, Ind. — Last week, Indiana Lt. Gov. Suzanne Crouch joined experts and industry leaders to discuss the state of the ethanol industry and how future events may affect it.

Ethanol accounts for $500 million of Indiana’s gross domestic product and supports 5,300 jobs. Crouch acknowledged ethanol kept agriculture afloat in the 2008 economic downturn, and pledged Gov. Eric Holcomb’s administration will support corn farmers and ethanol plants in the face of federal issues such as Renewable Fuel Standard (RFS) volumes.

“RFS is an important federal issue and is crucial to a strong rural comeback,” she said. “We have advocated for Indiana regarding the RFS, with a letter to the EPA administrator, and I am pleased that the EPA listened and issued its final renewable volume obligation (RVO) rule.

“This certainty in the marketplace will foster continued growth in the biofuels sector and benefit our Hoosier farmers.”

Ken Parrent, Indiana Corn Marketing Council’s director of biofuels, gave a review of the state’s 13 functional ethanol plants and how they have been faring in tough economic times.

“We have a healthy, dynamic ethanol industry here in Indiana. I think the future looks really bright as we move forward,” he said. “A number of plants have celebrated 10-year anniversaries since our last Ethanol Forum (a year ago).”

He said ethanol plants have created direct and indirect jobs such as nurses, electricians and truck drivers, which have provided a huge boost to rural economies.

“Several of our ethanol plants blend a finished product – E85 – and sell directly to farmers and fuel retailers, so they benefit consumers as well. We are really proud of what all these plants have accomplished in the last decade.”

Some plants, Parrent said, have efficient producer pathways acknowledged by the EPA, including those in Portland, Alexandria, Bluffton and North Manchester, Ind.

Corey Harris of the Indiana Corn Growers Assoc. (ICGA) presented a close analysis and overview of several policy-related issues affecting ethanol. He spoke on the now-familiar tune of global trade and farm bill concerns, as well as President Trump’s recent announcement to allow E15 to be sold year-round.

“Ethanol is one of ICGA’s most important focuses because it is a tremendous driver for Indiana corn, accounting for 40 to 50 percent of the annual corn crop,” he explained.

Harris addressed the farm bill, a vote on which failed in the House less than a week ago. He said it’s unlikely to pass by Sept. 30; however, he is hopeful the final bill will be good for producers, noting it “will be a little less polarizing and should receive a little less consternation.”

The larger issue, he said, is international trade policy, a big driver for corn and soybeans across Indiana and across the United States – 1.4 billion gallons of ethanol, specifically, were exported last year.

The latest concern regarding trade has been Section 301 tariffs, which China has threatened as retaliation against U.S. tariffs on steel, aluminum and several other items if a resolution cannot be met. (The forum took place before last weekend’s news about a potential agreement between the two nations.)

“China has come back with a proposed 25 percent tariff on U.S. corn and soy,” Harris said, “So it’s kind of terrifying to think about that from an economic standpoint and where we already are in the farm economy. It’s a tough time, and we need to make sure our foreign trade relationships are protected.”

Another major focus on trade policy is the North American Trade Agreement (NAFTA), now in renegotiation.

“President Trump came into office and decided that he wanted to, or that it was best that we look into, renegotiating the trade agreement,” Harris said. “Our concern has been some rhetoric over the past several months that we would consider completely withdrawing from the agreement.”

About 47 percent of Indiana exports go to a NAFTA partner: Mexico is the third-greatest trade partner for agricultural goods, and Canada is the first-greatest. He said negotiations are likely to continue for the next several months.

RINs may sort out well

In terms of policy more specific to ethanol, Harris said the latest happenings have included a series of White House meetings, with several conversations on Reid vapor pressure (RVP), a measure of emissions.

“Sometime in mid-March, we were told there would be a meeting to discuss ethanol,” he noted. “Out of those discussions have come a possible cap on the value of Renewable Identification Numbers (RINs).”

Harris said despite the RIN issue having been stirred up, it seems like it could end favorably for the industry as a whole. Out of seven meetings, he said the theme has been that Trump recognizes the value that RVP and year-round sales of E15 would play in lowering the value of RINs, and has promised to move forward with RVP relief.

“Trump has said a few times that he thinks this could happen by this year, and that we’ll be able to move forward and continue to sell E15 throughout the summer months,” Harris said. “But it’s yet to be seen whether or not that will happen. So that’s a big issue that has the potential to be a chance to move forward with a victory for the industry, or it could hang us up for a couple years.”

The next big issue involves RVO. It is unknown whether there will be RVP parity this summer or if those volumes would be included in this year’s RVO. He said another factor is oil refinery waivers handed out by the EPA. Crouch also mentioned the EPA’s recent activity granting dozens of waivers to oil refineries.

“I know the waivers have led to greater apprehension among producers already facing uncertainty regarding trade policy and the farm bill,” she said. “I am glad President Trump is considering year-round E15 sales. The EPA should follow through on his instructions, because those sales are a crucial market-oriented step in the right direction.”

Harris said these issues demand attention from the industry, and there are a few ways producers and industry partners can help.

“We need to make sure we support those who are our champions – both those who are in office and those who are seeking office that we value and appreciate, those who have done a great amount of work on this issue, those who have stood by our side and who have the best interest of the ag industry in mind.”

State Agriculture Director Bruce Kettler, who spoke later in the day, reinforced that idea. “The ability to engage seems to be more important now than ever,” he said. “Our legislatures want to make sure that we are keeping them informed, so I hope that you’ll do that.”

Harris said anyone in the ag industry wanting to make an impact on policy issues should start by reaching out to industry organizations supporting their commodities.

“We’re happy to connect anyone and help them build relationships with their elected officials,” he added. “Other organizations do a great job of this, as well. Any of the associations that represent their industries, whether that be pork, beef, dairy, corn, soybean – if they need guidance, they should reach out and we’d be happy to help connect them and help them find the answers that they need.”