IRFA: Study shows impact of stagnant corn demand hitting agriculture economy
A new study shows Iowa’s biofuels industry remains strong but faces reduced economic impact due to falling corn prices and stagnant demand. Despite this, 2024 saw record fuel production: 4.6 billion gallons of ethanol and 353 million gallons of biodiesel. Experts urge support for carbon capture to access global low-carbon markets and stabilize farm income.
According to a new economic contribution study released today, Iowa biofuels production has begun to reflect stagnant corn demand throughout the agriculture economy. The direct impacts of biofuels still remain strong, but the multiplying effects of corn and soybean purchases have been reduced as commodity prices fell.
Decision Innovation Solutions (DIS) conducted the study, commissioned by the Iowa Renewable Fuels Association (IRFA). The study found: “Even though a variety of factors converged in 2024 that created stresses for the biofuels industry in Iowa and lowered the economic contributions of the industry to the Iowa economy compared to prior years, Iowa’s renewable fuels industry set another record for fuel production.” Specifically, biofuels production contributes the following to Iowa:
- Accounts for $5.7 billion, or about 2%, of Iowa GDP
- Generates $2.6 billion of income for Iowa households; and
- Over 34,000 jobs throughout the entire Iowa economy
“Renewable fuels production continues to be a core part of Iowa’s economy,” said IRFA Executive Director Monte Shaw. “Yet, as farmers continue to produce more and domestic demand has leveled off, we saw commodity prices fall. That means the indirect impacts of converting corn and soybeans into renewable fuels also fell. Simply put, Iowa farmers need growing markets. The best way to open new ethanol markets around the world is with carbon capture and sequestration (CCS). That is the most cost-effective and impactful tool we can provide our farmers and producers.”
In 2024, Iowa ethanol plants produced 4.6 billion gallons of ethanol and continues to lead the nation in ethanol production. Iowa biodiesel facilities produced 353 million gallons, up from 350 million gallons in 2023.
“Over the last couple of years, we have been warning of the coming economic storm in agriculture,” said Shaw. “In fact, as corn and soybean prices fell, American farmers lost $90 billion in net income over the last two years. Production has been steady in Iowa, but the impact of $7 corn is just bigger than $3.50 corn. Today’s study highlights why Iowa legislators need to stand up for Iowa farmers and renewable fuels producers’ ability to gain access to the massive ultra-low carbon markets before things get worse for farmers and our state economy.”
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Source : Ethanol Producer Magazine
