More Questions than Answers on China, Biofuels Package

09:25AM Oct 28, 2019
Gas pump biofuels
Gasoline pump offering a variety of grades, including biofuel
( Wes Mills )

Can the biofuels debate find a solution for farmers and small refiners? By the same token, can Chinese and American governments reach a trade agreement?

Farmers are looking for answers and it seems like the government is playing a balancing act, said two agricultural economics analysts to AgriTalk host Chip Flory. The topic of renewable fuels has two unique perspectives.

“We typically think of policy as a way to respond to risk,” said Brad Lubben, associate professor of agricultural economics at University of Nebraska Extension, about recent biofuels announcements. “In this case, policy is the risk.”

Reaching a compromise may be challenging.

“You certainly have an administration that has heard both a farmer perspective and also a petroleum industry and refinery perspective,” Lubben said. “It’s difficult to reconcile the two.”

Flory said providing small refineries waivers would bring challenges to reaching the goal of 15 billion gallons of ethanol. While EPA Admnistrator Wheeler has yet to make a final decision, the industry would like to see three-year rolling averages on SREs, Flory said.

“I don’t know if we know all the details of exactly how it’s going to play out yet,” Flory said.

Cory Walters, associate professor of agricultural economics at the University of Nebraska, said farmers need answers.

“I go back to the farmer right now trying to make ends meet,” Walters said. “You can only trade what you’re facing.”
China-U.S. trade talks have a hint of optimism for U.S. agriculture.

Flory says while current trade talks are similar to agreements discussed in May when China pulled away due to enforcement issues, the conversation is slightly different this time.

“We’ve seen some things happen in the Chinese media,” Flory said. “They’re talking about buying U.S. agricultural products again. I think that’s different.”

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USFR 10/26/19 - RT1