Study: Iowa corn and ethanol industry will 'continue downward trend' without new market access

   A recent study prepared for the Iowa corn and ethanol industries predicts that without expanded markets, the “best days for corn growers are in the past.” 

   The study, and industry advocates, said the passage of year-round E15, a 15% ethanol ratio blend of fuel, will provide relief to farmers in the short term, but access to ultra-low carbon ethanol fuels will be necessary to sustain corn growers past 2030. 

   The study follows what the U.S. Department of Agriculture called a record year of corn production, with Iowa farmers growing 2.77 billion bushels of corn in 2025. 

   In a call with reporters Wednesday, Iowa corn and ethanol leaders, referencing the study conducted by Decision Innovation Solutions, said the demand gap – or the distance between total corn use and total corn production – will continue to increase. A bigger demand gap means lower corn prices, assuming 2025 corn acreage figures persist, which would make it harder for farmers to stay in business. 

   The Decision Innovation Solutions study was “prepared for” Iowa Corn Growers Association and the Iowa Renewable Fuel Association, according to the report.

   Mark Mueller, Iowa Corn Growers Association president and a farmer near Waverly, said farmers are already working on “very very tight margins.” 

   “I am a fourth-generation farmer, and I am nervous that there won’t be a fifth generation Mueller farming on my family land,” Mueller said. “…The bottom line is that we have high input prices, we have low commodity prices, and we’re producing more corn all the time. We need more places to move our corn, and while Iowa corn is working towards that, it’s just a tough, tough road for the farming community.” 

   The study examined several potential trajectories for corn and ethanol industries. First, if production trends continue to increase, corn acreage planted remains at 2025 levels and ethanol demand is not increased by the nationwide, year-round sale of E15 fuel, the demand gap “rises sharply.” 

   Monte Shaw, the executive director of the Iowa Renewable Fuels Association, said this option puts the farm economy into a “capital C crisis” where farmers would be asking taxpayers for tens of billions of dollars in farm support payments. 

   If Congress is able to pass a bill permitting the year-round sale of 15% ethanol blends at gas stations nationwide, the study shows it would increase corn demand by about 2.1 billion bushels by 2031. 

   According to the study, the expanded ethanol market with E15 fuels would cause the demand gap to diminish, reaching almost zero by 2030. The electrification and improved fuel efficiency of vehicles, combined with farmers’ anticipated increases in production, would cause the gap to again increase after 2031. 

   Shaw said he hopes nationwide, year-round E15 can be included one of the final spending bills Congress has to pass this year. 

   “I think that’s going to be the single most important ag-policy decision that’s made this decade,” Shaw said. “It literally sets us up to move forward or to go into a very bad place.” 

   Dave Miller, chief economist with Decision Innovation Solutions, said ethanol production will have to turn to marine and aviation markets as the industries begin to transition away from fossil fuels. 

   “E15 is not a sufficient long-term solution,” Miller said. “It is a near-term solution that is very powerful, but in the long run, we need to be able to take, and access, two great big markets that exist.” 

   Ethanol and corn industry leaders say the best way for them to enter the ultra-low carbon ethanol market, which is the type of fuel the marine and aviation industries seek, is to obtain access to carbon capture and sequestration technologies. 

   Several companies have attempted to build carbon sequestration pipelines through Iowa to connect to ethanol plants for this purpose over the past several years. The Summit Carbon Solutions pipeline obtained a permit from the state regulating board, but the progress of the pipeline has been tied up in legal and legislative fights. 

   Environmental groups like the Sierra Club Iowa Chapter and groups of landowners argue the transportation of sequestered carbon dioxide is not a public use, and therefore that the pipeline should not be able to use eminent domain to obtain rights-of-way.

   The House is scheduled to debate a bill Wednesday that would ban the use of eminent domain for carbon capture pipelines, and Summit says, would kill the project. A bill in the Senate seeks to address the issue by allowing pipeline operators to deviate from their approved paths in favor of landowners who are willing to have the pipeline on their properties. 

   Shaw said this is the second battle the ethanol and corn industries have to fight. 

   “Right now there are people who are trying to slam the door on the future markets of Iowa agriculture, and we’re trying hard to say, no, let’s not do that,” Shaw said.

   According to the study, the ultra-low carbon ethanol markets are large enough to sustain continued growth in corn production. Per the study, the marine fuel market represents a 70-80 billion gallon per-year fuel market and sustainable aviation fuel has the potential for 35 billion gallons per year. 

   “Not all these fuel requirements will be filled with ultra-low carbon ethanol,” the study said. “But these new markets are sufficiently large to close the gap on corn demand through 2050, if only we have the foresight to do so.”