Farm Industry News

Ethanol takes a hit

It's Not often that farmers and their farm groups have the opportunity to put on a big party for politicians. So the AgNite celebration held in Minneapolis, MN, in conjunction with the Republican National Convention in St. Paul was a splashy, one-time deal. Plenty of agricultural leaders, companies and journalists attended the one-million-dollar-plus event. It featured products from ice cream to pork chops to grain vodka to showcase Midwestern farming.

Unfortunately, the Republican Party didn't treat agriculture quite as well that day. That afternoon the party endorsed Republican presidential nominee John McCain's opposition to ethanol in its national platform. McCain has been opposed to tax breaks and tariffs that support ethanol. But in its 2004 platform, the Republican Party endorsed ethanol, and President Bush has been a big supporter as well.

Clearly, the Republican Party's strike against ethanol does not bode well for the industry. The growth in ethanol production and the growing world demand for corn and soybeans have helped boost commodity prices. Without these higher prices, farmers would not be able to weather the meteoric rise in fertilizer, steel and other input costs. Survival would be the only subject on farmers' minds.

What does the future hold for ethanol after this fall's presidential election? The answer is uncertain. Although Barack Obama has been an advocate for ethanol, support for ethanol has become an unpopular position. Perhaps the one group that may still be in ethanol's corner after the election is Congress. It passed the Renewable Fuels Standard in the 2007 energy bill.

It will be an interesting fall.

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