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Monte Shaw grew up on a southwest Iowa corn and soybean farm, watched his family later leave the farm business, and is now a family farmer again. Corn and beans again, too.
There is a sign that he remembers as a boy in the 1980s that has always stuck with him and guides him today. “I used to hop on the school bus from where we lived in the country on the farm. I went by a billboard,” Shaw told American Farmland Owner.
“There was a 1-800 suicide hotline specifically for farmers,” he said. “It was not a fun time.”
The Farm Crisis of the 1980s reshaped much of the agricultural community. High interest rates, high oil prices, and high inflation took their toll. Commodity prices dropped. Many farmers could no longer afford to make payments on their loans.
Shaw’s family farm survived during that period, and he knows many others that didn’t. By the end of the decade, one in four farms in the state was no longer in operation. “That was a really tough time. I was lucky that we did not lose any of our land at that time. I did not go to bed hungry. I had…shoes on my feet. So…I’m not complaining.”
“We weren’t encouraged to stay on the farm,” Shaw recalled of his youth. “You hear the 80s…people forget the 90s weren’t any better. We were still producing corn for $2.80 and selling it for $2.30. And then we had to get a government check to stay in business. We just had better farm support programs in the 90s than we did in the 80s.”
A sign of the turnaround happened the following decade, Shaw believes. “It really wasn’t until the biofuels boom of the early 2000s that we pulled rural America out of that stagnation.”
Biofuels offered new economic potential for smaller communities like Shaw’s hometown. They also offered Shaw a way to stay connected to his family farm by finding opportunities for it across the globe.
Shaw is the executive director of the Iowa Renewable Fuels Association, an organization based in the state that produces more biofuels than another other with 42 ethanol plants and 11 biodiesel plants.
There is much attention in the Biden administration and the automobile industry about the promise of electric vehicles. But Shaw wants to make sure that biofuels are plugged into the plans, too.
And he again sees a sign of trouble ahead. “Corn’s dropped two bucks in the last year, the single largest drop in a year for over a decade.”
“Hey, we’re not in a stable situation right now,” Shaw said.
Production continues to climb. “We’re at two billion bushels. We’re going to be at 2.5. We’re going to hit three billion bushels. Those are not good numbers. Those are the numbers that send the price of corn back below the cost of production. I grew up during that time (the 80s). I do not want to go back to that time. And I think we have the tools in the toolbox to avoid it.”
Demand must increase to avoid overproduction. One of those tools to combat price drops and production increases is a continuation of the solution that brought stability to the industry, Shaw maintains. And that’s the biofuels industry.
RELATED: The U.S. Energy Information Administration reported that ethanol production and consumption rose nearly two percent last year. That reached their highest levels since 2019, according to this report from the Renewable Fuels Association. Part of the increase is fueled by continued expansion of E15, along with record sales of E85. Read the report here.
The potential of the biofuels industry is why Shaw is both encouraged and frustrated with a significant decision by the Biden administration. “We’re happy that we have certainty in these eight states going forward…2025…So I don’t want to minimize that. That is good…we appreciate that. And we thank the EPA (Environmental Protection Agency) for getting that done.”
Eight states can sell E15 (the 15 percent ethanol blend) year-round beginning in April 2025, instead of shutting down sales over the summer.
Illinois
Iowa
Minnesota
Missouri
Nebraska
Ohio
South Dakota
Wisconsin
The eight states represent the heart of U.S. corn and ethanol production. Most gasoline sold across the country is blended with 10 percent ethanol. But E15 is becoming more common. Eight states aren’t yet 50, but Shaw appreciates the progress.
The American Petroleum Institute wants certainty in a national standard. Will Hupman, the trade group’s vice president, said in a statement:
“We are concerned this piecemeal approach could weaken the resiliency of the region’s fuel supply chain. We continue to call on Congress to pass the bipartisan Nationwide Consumer and Fuel Retailer Choice Act, which would bring much needed consistency to the marketplace by allowing for the year-round sale of E15 nationwide, preserving access to E10 and eliminating the need for regional or state-specific waiver petitions.”
The EPA originally banned summer sales of E15 amid concerns that the fuel would contribute to smog, only to find out later that the higher ethanol blend lessens tailpipe emissions.
The states received emergency waivers to sell E15 over the past two summers as the Biden administration looked for ways to lower fuel costs (E15 can be 10-15 cents per gallon cheaper than E10 gasoline) following Russia’s attack of neighboring Ukraine.
The EPA cited supply concerns as a reason for delaying E15 sales until 2025, instead of allowing it this summer.
Shaw sees the delay as taking away money from corn growers and hurting communities like the one where he grew up. More E15 sales this summer would mean more demand for corn and, hopefully, higher prices.
“By delaying it, they’ve left us in the cold in 2024,” he said.
Shaw thinks that the biofuels industry has entered an era of what he calls “dramatic disruptions.”
1. Rise of electric vehicles
2. Rapid expansion of soybean crush capacity
3. Growth of Brazil’s corn ethanol production
4. Potential 35-billion-gallon sustainable aviation fuel market
Year-round E15 sales in 2025 could offer some certainty for the industry. He wants certainty sooner and the EPA can deliver it. “I don’t care how they do it,” Shaw said, “But they need to find a way.”
