LYONS – On Saturday, Congressman Marshall, M.D. met with ethanol producers and agriculture industry leaders at the Kansas Ethanol LLC facility to discuss the preservation of the Renewable Fuel Standard (RFS) and current Renewable Identification Numbers (RINs) structure. In the discussion, producers made it clear that a cap on RINs would have serious implications on the Big First.
“At the moment we’re at about a 12 year low in farm income,” said first generation Reno County farmer Geoff Burgess. “This coming season we’re just getting started, and it’s already projected to be a 6.7-percent reduction further. It’s gonna hurt demand for corn and drive our prices down even more, and that will be really hard to swallow. There’s a lot at stake here.”
It’s been recently reported that the administration is considering capping the price of RINs. Multiple studies indicate a RINs price cap would reduce ethanol demand by more than 750 million gallons and cost corn farmers as much as 25 cents per bushel.
“Back in 2000, we had roughly 3.4 million acres of corn. Last year we were at 5.3. We have basically gone from a corn importer to a corn exporter just due to the amount of corn that is being produced in our area. With that being said, for us, not having the ethanol plant as an end user in our area would be huge.” Dustin Campbell, from Team Marketing Alliance, said.
Based on current corn prices, a cap on RINs would mean a $4 billion decline in farm income at a time when producers earnings are already struggling to break event. This hit to our Kansas farmers would devastate our communities.
“I’m a fifth-generation farmer - came back to take over the farm when my father died. We’ve grown substantially in size, and a lot of it’s due to the ethanol plant. We’ve got a steady, reliable market that pays at levels we can make profitable on our farm,” said Matt Splitter, who farms in Rice County and sits on the board of the Kansas Association of Corn Growers and Central Prairie Coop.
Ethanol not only benefits Kansas farmers but provides a higher-octane, cleaner-burning fuel alternative for drivers across the country.
“The car makers are saying they want a higher octane fuel, and that’s the value of ethanol because it boosts the octane value of fuel,” said Kansas Ethanol CEO and President Mike Chisam. “We’re willing to work with (the refiners), and I think it’s in the best interest of both industries to work together to figure out a solution to all of this.”
With ten ethanol plants in the state and eight of them in Congressman Marshall’s district, Kansas is in a position to be a top ethanol exporter and leader in renewable fuel production. Tom Willis, CEO of Conestoga Energy, the largest ethanol producer in the state, was unable to attend the meeting but still expressed his concerns from possible RINs cap to the Rep. Marshall.
“This proposal would hit Kansas agriculture hard, lowering corn and sorghum prices when our farmers are already under water,” Willis said.
As members in the administration work to negotiate with oil refiners and ethanol producers, Rep. Marshall made it clear to the producers he met with that he shared their concerns with a RINs cap.
“These discussions between ethanol producers and refiners must lead to a win-win solution that support jobs across our energy industry,” Congressman Marshall said.