Ethanol Industry Warns Iowa Farmers Of Plummeting Prices
Iowa is a state where so many livelihoods depend on corn production. However, a recent study found that farm income is in jeopardy of dropping more than $1 billion annually.
On Monday, the Iowa Renewable Fuels Association, IRFA, released phase two of its study looking into the ramifications of blocking carbon capture and sequestration, CCS, projects. The study is being completed by Decision Innovation Solutions or DIS.
In phase one of the study, it concluded that up to 75 percent of Iowa ethanol production would be in jeopardy if the state were locked out of carbon pipeline projects.
In phase two, DIS says that without CCS projects or pipelines, corn leaving the state of Iowa without added value would jump from 6 percent to 44 percent by the end of the decade. On top of that, regions of the state would experience up to a 75-cent per bushel reduction in local corn basis prices. The ethanol plant premium of 16 cents per bushel would also disappear.
The report says that this would mean that the profit on corn production would plummet an average of 85 percent when compared to the status quo. For a typical 1,000-acre farm that is split 50/50 between corn and soybeans, farm income would drop $43,000.
On top of that, the statewide net farm cash income would decline by $1.1 billion per year.
CCS projects are currently being threatened by pending legislation that would impose new restrictions on the use of the eminent domain. On top of that, many landowners have spoken out, voicing their concerns over the projects.