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Farmers urge support for biofuels, infrastructure during trip to Capitol Hill

Article cover photo
Karey Claghorn, ISA COO and Jeff Frank, a farmer from Auburn, discussed legislative priorities with Denise Fleming, legislative director for Congresswoman Cindy Axne during a trip to Washington, D.C. last week. (Photo credit: Bethany Baratta/Iowa Soybean Association)

By Bethany Baratta, ISA senior writer


Iowa soybean farmers want a resolution to trade deals, an extension of the biodiesel tax credit and ongoing support in developing and maintaining new markets, they told lawmakers on Capitol Hill last week.

The biodiesel tax credit was extended for one year, retroactively for 2017, but not for 2018. The biodiesel tax credit has been issued previously to provide a $1-per-gallon credit to companies that blend biodiesel with petroleum. The tax credit expired and was not included in the House’s government funding bill. Farmers said the extension of the tax incentive is important to the industry’s continued growth.

“We would really like some push to see that backfill for 2018 and an extension for 2019 to give our producers some certainty with their market and what they can do with their infrastructure,” said Morey Hill, a farmer in Madrid.

Approximately half of U.S. biodiesel is produced from soybean oil that is a by-product of soybean production, which is driven by demand for protein meal.

“We have this mountain of soybeans out there, we process it for livestock feed and then we have this oil that’s perfect for the biodiesel market,” Hill noted.

Infrastructure funding

Increased funding in transportation infrastructure would help increase the efficiencies of delivering soybeans by rail and by ship, farmers said.

They urged lawmakers to secure $118 million for federal share of the project to deepen the Mississippi River Ship Channel from 45 feet to 50 feet.

“When you get into the whole world markets, you realize that buyers still buy based on price. And part of the price is still based on infrastructure and freight. We strongly encourage the dredging of the lower Mississippi down to that 50-foot level because with the Panama Canal being enlarged, we can’t benefit at all from that unless we make our ports accessible to the bigger ships,” said Wayne Fredericks, a farmer in Osage.

A recent Soy Transportation Coalition (STC) analysis by Informa Economics found that this deepening offers great potential to significantly benefit the competitiveness of the U.S. soybean industry and individual farmer profitability. If the channel is dredged to 50 feet, shipping costs for soybeans from Mississippi Gulf export terminals would decline 13 cents per bushel or $5 per metric ton because a deeper river would allow ships to be loaded with more freight, research found.

“Shipping is a big opportunity in looking at ways to increase efficiencies,” said Lindsay Greiner, ISA president and farmer from Keota.

The 256-mile stretch of the Mississippi River from Baton Rouge, Louisiana, to the Gulf of Mexico accounts for 60 percent of U.S. soybean exports—along with 59 percent of corn exports—easily the top export region for both commodities, according to Mike Steenhoek of the STC.

Market competitiveness

In addition to passing the U.S.-Mexico-Canada Agreement (USMCA) and negotiating a deal with China, Iowa soybean farmers pushed for additional funding for the Market Access program (MAP) and the Foreign Market Development (FMD) program in the 2018 Farm Bill.

While the programs received an increase, doubling the funding should be a top priority this year, farmers said.

Annual MAP funding has remained at $200 million since 1990 and FMD funding has been limited to $34.5 million per year for even longer than that, the American Soybean Association noted.

In absence of negotiated and formalized trade agreements, these market development programs could help increase the demand for soy, Greiner said.

“We’ve spent millions of dollars in farmers’ money (through the checkoff) trying to find new markets for these beans. We’re getting beans into the Middle East and northern Africa where we hadn’t been before. Increased funding in MAP and FMD really goes along well with those farmer dollars we’re investing,” Greiner said.

“There’s never been a more important time to get more beans out into regions where we haven’t been before, in the absence of a good China market. We look at it as a partnership that would benefit everybody,” he said.


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