Once you start digging into this world of ethanol’s relationship to the rest of agriculture, most would say “it’s complicated.” The one certainty is when people complain about the subsidies that flow into agriculture, corn and ethanol stand at the top of the heap.
I am critical of subsidies and the prediction is that 2025 will see a 342% increase in direct United States farm payments. With that knowledge, people can hardly be critical of the welfare mom when taxpayers are shoveling that kind of money into farm subsidies.
With all of that said, I am a fan of both ethanol production and consumption in our quest to be independent in our fuel production. In fact, it is rarely referenced, but the U.S. is the No. 1 producer of transportation fuel in the world. We have been a net exporter since 2018.
The subsidies are flowing at the expense of taxpayers. Now, in the name of carbon intensity, we are the most vulnerable we have ever been to complete dependence with the global oil companies lurking for control. Ethanol, an industry that was born out of farmer investments, is today barely owned by the farmer. In fact, Glacial Lakes, in South Dakota, is the only top 10 ethanol production facility that is still farmer owned. Poet Energy of South Dakota, owned by the Broin family, is the world’s largest production system, but it is not owned by farmers.
The Department of Energy gives us a glimpse into where ethanol production levels are early in 2025:
Production averaged 1.05 million barrels per day in 2024.
On a quarterly basis, fuel ethanol production is currently expected to average 1.06 million barrels per day during the first quarter of 2025, falling to 1.04 million barrels per day in the second quarter, and expanding to 1.06 million barrels per day in the third quarter and 1.07 million barrels per day in the fourth quarter. Moving into 2026, production is expected to average 1.06 million barrels per day during the first quarter, 1.04 million barrels per day in the second and third quarters, and 1.06 million barrels per day in the fourth quarter.
The EIA maintained its forecast that fuel ethanol blending will average 930,000 barrels per day in 2025, but lowered its outlook for 2026 ethanol blending to 920,000 barrels per day, down from the forecast of 930,000 barrels per day made in January. Fuel ethanol blending averaged 930,000 barrels per day in 2024.
How is it that the petroleum industry, which completely controls distribution of fuel in the nation, is able to allow the percentage of ethanol to increase yet it sells for 30 to 50 cents a gallon cheaper than straight gasoline? The truth of the matter is that petroleum blenders make more money on ethanol than they do on oil. As of January 2025, a 45Z tax credit is going to the middlemen (blenders and ethanol plants), but the farmer gets none of this benefit. On the day I am writing this column, the reported price of ethanol is just under $1.80 a gallon and if those in the middle get $1.25 a gallon, you can do your own math on how much the farmer makes.
Why can’t farmers buy straight ethanol back from the plant and capture this tax credit themselves? The program tells us that corn farmers must have their carbon intensity score right or they will have trouble marketing their corn. To accomplish an acceptable score and possibly supply SAF fuel, a producer needs to use the GREET model (Greenhouse gases, Regulated Emissions, and Energy use in Technologies), reduce tillage, plant a cover crop and use “high efficiency fertilizer.”
As long as farmers try to farm government programs instead of their fields, they will be sadly disappointed with the yield.
Editor’s note: The views expressed here are the author’s own and do not represent the views of High Plains Journal. Trent Loos is a sixth-generation United States farmer, host of the daily radio show “Loos Tales” and founder of Faces of Agriculture, a non-profit organization putting the human element back into the production of food. Get more information at www.LoosTales.com, or email Trent at [email protected].
PHOTO: Closeup of man pumping ethanol fuel in car at gas station. (iStock │ #426749865 – pancaketom)
