Iowa farmers could face another debilitating Farm Crisis without a proposed $5 billion carbon capture pipeline to allow them to tap into demand for ultra-low-carbon ethanol, the state’s corn and renewable fuels groups warn.
The Iowa Corn Growers Association and Iowa Renewable Fuels Association released a study on Wednesday, Jan. 21, that shows corn supplies exploding — and prices falling — without the pipeline providing access to the developing, 120 billion-gallon low-carbon jet and marine fuel market. They say allowing the year-round sale of E15, gasoline blended with 15% ethanol instead of the usual 10%, also is a critical need.
With Iowa farmers struggling after three years of financial losses, the pain could deepen into a 1980s-style Farm Crisis without an increase in corn and ethanol demand, Monte Shaw, the renewable fuels association’s executive director, said during an online news conference Wednesday.
“I grew up in the Farm Crisis … and I don’t want to go back there,” Shaw said.
Iowa is the nation’s top producer of ethanol and corn, with roughly half of the annual crop used to make about 4.6 billion gallons of the renewable fuel last year.
Gaining access to the sustainable aviation and marine fuel markets hinges on Summit Carbon Solutions’ proposal to build the pipeline, corn and ethanol leaders said. The Ames company seeks to capture carbon emissions from about 30 Iowa ethanol plants, as well as plants in neighboring states, and sequester it deep underground.
The pipeline project, however, has sparked intense opposition. Lawmakers at the Iowa Capitol this week are debating competing proposals: One would prevent Summit and other pipeline developers from using eminent domain to force unwilling landowners to sell access to their land for the project. Another, aimed at helping the project move forward, would widen the pipeline’s possible route to help it get around the need for eminent domain.
In addition to boosting demand for corn and ethanol, the pipeline could spur other development, said Kevin Studer, the Iowa Corn Growers’ government relations vice president. He said the group has fielded interest from sustainable aviation fuel companies that are interested in locating in Iowa — “possibly Fort Dodge, Council Bluffs, Newton.”
But “they won’t come here if we don’t have a pipeline,” said Studer. “It’s just that clear.”
He declined to name the businesses but called them “massive Fortune 100 companies.”
Here’s what to know about the study, conducted by Urbandale-based Decision Innovation Solutions and sponsored by the corn and renewable fuels groups.
Without expanded markets, farms will disappear, groups say
Shaw said increased demand from year-round E15 would provide a short-term solution to low prices that farmers are struggling with, while access to ultra-low carbon ethanol markets offers a long-term solution.
U.S. farmers have seen production costs outstripping the prices they receive for their crops. Congress agreed to provide farmers with $31 billion in disaster and economic assistance in late 2024. And last month, the Trump administration said it would provide about $12 billion in aid, in part to offset losses from ongoing trade wars.
But without expanded markets, many farmers may be forced to downsize or leave farming altogether, the Iowa Corn Growers said in a statement.
“Many of us don’t know what the future holds without access to new markets,” said Mark Mueller, a northeast Iowa farmer and the group’s board president.
The report shows Iowa farmers could see corn prices drop from around $4 a bushel to about $1.50 by 2050, a loss of nearly $9 billion a year in gross income.
“Iowa corn farmers face daunting times ahead if new demand, especially from year-round E15 and ultra-low carbon ethanol, do not happen,” it says.
That would tank the Iowa economy, given the role farming plays in it, Shaw said. Farming and industries tied to it — like equipment manufacturing, seed production and insurance — make up about 25% of the state’s $265.8 billion economy, experts have said.
Without year-round E15, corn supply gets ‘very large, very quickly’
Shaw said U.S. farmers are victims of their success, with corn demand unable to keep pace with rising yields.
And Iowa corn yields are outpacing the nation’s, “growing 15% faster than U.S. average corn yields,” the report said.
Last year, Iowa farmers grew a record 2.77 billion bushels of corn, averaging 210 bushels per acre. U.S. farmers as a whole harvested 17 billion bushels last year, averaging 186.5 per acre, also records, U.S. Department of Agriculture data shows.
The gap between U.S. corn production and demand “gets very large, very quickly” without year-round E15, the report says. “By 2034, we could be facing ending stocks that are nearly as large as a full year’s worth of demand (15-plus billion bushels), similar to the 1980s farm crisis.”
And “reducing corn acreage to manage prices will impact small family farms the most and increase further consolidation already seen in agriculture,” the report says.
Shaw said Iowa groups are urging the state’s congressional delegation to “lay in front of the train” to get national year-round access passed this year. Currently, the sale of E15 in warm weather is prohibited across parts of the U.S., given concerns it contributes to smog. Fuel with the 10% ethanol blend is sold year-round, and represents the bulk of gasoline sold in the U.S.
Should Iowa shift from corn to other crops?
If corn supplies outstrip domestic and global demand, wouldn’t Iowa farmers shift and grow other crops?
Mueller, who farms near Waverly, said he could grow other crops like sweet corn or sugar beets, but they’re unlikely to be as profitable as corn and soybeans, since Iowa has little processing or other infrastructure to support them.
And David Miller, chief economist at Decision Innovation Solutions, the data analytics company, said shifting Iowa acres to grow oats, wheat or other crops would swamp those markets, collapsing prices.
Shaw said idling farmland — as happened during the 1980s Farm Crisis — erodes the local economy. He said that’s what happened in some southern Iowa counties four decades ago and they’ve never recovered the tax base, industries or population they had then.
“It’s not a robust economic future for our economy,” he said.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com.
This article originally appeared on Des Moines Register: Would Iowa suffer another Farm Crisis without carbon capture pipeline?
Reporting by Donnelle Eller, Des Moines Register / Des Moines Register
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