In The News

Apr 8, 2024

Author: Krista Swanson

Motor gasoline use is expected to decline in the future even under a baseline case, but new tailpipe emissions rules really put the pedal to the metal – rapidly accelerating that process. This would be a major shock on demand for corn used to produce ethanol spurring potentially devastating impacts on farmers and the rural economy.       The New Tailpipe Emissions Rule The Environmental Protection Agency recently released its final rule for multi-pollutant emissions standards for model years 2027 and later light-duty and medium-duty vehicles with heavy reliance on the use of electric vehicles. The ruling dictates that sales of non-electric vehicles will drop from over 92% of new vehicle sales in 2023[i] to under 30% of new vehicle sales in 2032. In the EPA central scenario, that translates to a 6.9-billion-gallon reduction in motor gasoline use in 2032, a 5.7% decline from the baseline projection for that year. Motor gasoline use is expected to decline in the baseline, but...

Feb 16, 2024

Key Issues: Production

Author: Krista Swanson

USDA released the Grains and Oilseeds Outlook this week providing an initial look at the 2024/25 marketing year projections that include lower production, greater domestic use, increased exports, and higher ending stocks as compared to the current 2023/24 market years. The following is a summary and some additional context for five projections from the latest outlook.   Yield Corn yield is projected at 181 bushels per acre. Yield projections depend on the modeling approach and time series used. While a 3.7 bushel per acre increase over the 2023 record 177.3 bushels per acre may seem like a stretch, a regression on annual yields from 2023 to several different historical points including 1934, 1980, and 1996 all predict 2024 yields within about one bushel of the USDA projection.   Trendline yields are a reasonable expectation at this point. Adverse weather is generally thought to have a negative impact on yields but in 2023 a record yield was achieved in a year with widespread...

Feb 9, 2024

Key Issues: Trade

Author: Krista Swanson

A combination of climate, conflict, and currency values are factors in cost competitiveness that impacts transits and overall U.S. corn exports.   Climate Climate conditions brought widespread drought to the United States Corn Belt in 2023. Dry conditions in the Mississippi River basin led to record low water levels. As a result, barge weight and traffic restrictions were imposed, and the 7.7 million tons of corn moved by barge on the Mississippi River in 2023 was 30% lower than 2022 and 54% lower than 2021. Ultimately, the cost of added time and weight restrictions were factors contributing to a higher corn price at port but also meant pace of getting grain to the port was slowed.   Climate-induced waterway challenges for U.S. corn don’t end at the Gulf. Extreme drought has forced substantial scaleback of shipping through the Panama Canal, a key global maritime channel. The Panama Canal Authority (ACP) has reduced traffic to 24 ships a day, about two-thirds of the normal...

Dec 1, 2023

Key Issues: TradeTransportation and Infrastructure

Author: Krista Swanson

For the second year in a row, drought conditions are impacting transportation on the Mississippi River at the peak shipment point of the year. Shallower river levels mean barge weight restrictions, slower barge traffic, and higher costs to ship commodities on the river. Ultimately, this translates to a relatively lower price at the farmgate and higher cost for the world buyer.   Drought Slows Grain Barge Traffic in 2022 and 2023 The Mississippi River is an important channel for commodity transportation. The USDA reports the final mode of transport was barge for 13% of U.S. grains in 2020, and 46% of exported U.S. grains[i]. There are normally two peaks in grain barge movements, one in late summer leading up to the end of the marketing year for corn and soybeans, and the other emerging in the fall harvest season and into the post-harvest months.   The impact of low water levels on grain barge movements was notable in 2023, marking the second consecutive year of drought...

May 14, 2021

Key Issues: Transportation and Infrastructure

Author: Liz Friedlander

The American Jobs Plan, the Biden Administration’s $2 trillion infrastructure proposal, includes several provisions directly impacting corn growers. Rural Americans rely on reliable and safe infrastructure to compete in the global marketplace and access to a fast, reliable broadband connection is critical for all Americans.   Technology is a part of nearly every aspect of the farming operation, allowing farmers to be more efficient and sustainable on their operations. But, 14 million Americans living in rural communities lack access to reliable internet.   The Biden plan proposes $100 billion to expand high-speed internet to enable 100 percent access across the entire country. This proposal will prioritize support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and cooperatives. This will also reduce the cost of broadband internet service and promote more widespread adoption.   The broadband industry supports jobs in rural America...

May 13, 2021

Key Issues: Transportation and Infrastructure

Author: Liz Friedlander

The American Jobs Plan, the Biden Administration’s $2 trillion infrastructure proposal, includes several provisions directly impacting corn growers.   Sixty million rural Americans live and work in rural communities. They rely on reliable and safe infrastructure to effectively move their products and compete globally and roads, bridges, highways and waterways provide the first and last links in the supply chain. America’s inland waterways system provides the most fuel-efficient, lowest cost, and environmentally friendly method of transporting products.   Included in the Biden Administration plan is a proposed $17 billion for inland waterways, coastal ports, land ports of entry, and ferries. The inland waterways system is essential to getting U.S. corn to export, with more than 60 percent of the grain produced in the United States being transported by barge, but work needs to be done to bring the nearly 12,000 miles of commercially navigable channels and 240 lock sites up to...

May 10, 2021

Key Issues: Transportation and Infrastructure

Author: Liz Friedlander

The American Jobs Plan, the Biden Administration’s $2 trillion infrastructure proposal, includes several provisions directly impacting corn growers. Rural Americans rely on reliable and safe infrastructure to effectively move their products and compete globally and roads, bridges, highways and waterways provide the first and last links in the supply chain.   The proposal’s $115 billion to modernize 20,000 miles of highways as well as roads and bridges would target the most economically significant large bridges and repair the worst 10,000 smaller bridges.   If approved by Congress, this funding would meet the needs of our crumbling infrastructure. The nation’s rural roads and bridges have significant deficiencies due to underfunding. 15 percent of the nation’s major rural roads have pavements rated in poor condition, 21% in mediocre condition, and 10 percent rated structurally deficient.   Congress will ultimately decide, and vote on, the provisions included in any...

Apr 6, 2021

Key Issues: COVID-19Farm Policy

Author: Liz Friedlander

The U.S. Department of Agriculture (USDA) announced on March 24 Pandemic Assistance for Producers (PAP). The new initiative will bring financial assistance to farmers, ranchers and producers who felt the impact of COVID-19 market disruptions.   The Consolidated Appropriations Act of 2021 passed by Congress in December 2020 included additional Coronavirus Food Assistance Program (CFAP) assistance of $20 per acre for producers of eligible crops, including corn. The Farm Service Agency (FSA) will automatically issue payments to eligible producers based on the eligible acres included on their CFAP 2 applications. These payments should start being distributed this month.   The Consolidated Appropriations Act also granted USDA with the authority to provide support for ethanol producers who were impacted by a drop in ethanol demand. USDA is expected to share details of this assistance in a proposed rule likely to be released in the next few months.   USDA will be holding a webinar...

Mar 31, 2021

Key Issues: Transportation and Infrastructure

Author: Liz Friedlander

President Biden today unveiled his American Jobs Plan, a $2 trillion infrastructure proposal investing in a wide range of infrastructure areas. The White House describes the American Jobs Plan as “an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.”   The proposal includes: $115 billion to repair roads and bridges $100 billion to expand high-speed broadband across the country $100 billion to upgrade and build new schools Investment in climate and clean energy infrastructure   Congress will ultimately decide and vote on, the provisions included in any infrastructure legislation. Discussions on Capitol Hill regarding an infrastructure package are currently taking place and NCGA is sharing corn farmer priorities with members of the House and Senate.   The proposal’s $115 billion to modernize 20,000 miles of highways as well as roads and bridges would target the most...

Mar 17, 2021

Key Issues: TradeFarm Policy

Author: Liz Friedlander

The U.S. Senate today confirmed Katherine Tai to serve as U.S. Trade Representative (USTR), overseeing the development and promotion of U.S. trade policy.   In her prior role as Chief Trade Counsel for the U.S. House Committee on Ways and Means, Tai was closely involved in negotiations between the House and USTR to reach an agreement on a U.S.-Mexico-Canada Agreement (USMCA) implementing bill that received strong bipartisan support in Congress.   For generations, America's farmers and ranchers have built strong trading relationships to help maintain a competitive edge in the global economy and bolster job creation across the United States. Today, exports are responsible for 33 percent of U.S. corn farmers’ income and more than 20 percent of the U.S. corn crop is exported annually when accounting for corn and value-added products like ethanol and distillers dried grains with solubles (DDGS).   U.S. corn exports for the current marketing year are on track to surpass...