From Rows to Roads

From Rows to Roads

Michael Dolch Director of Public Affairs

Last month, we continued to push the fight. This month, we will see where the rubber meets the road — quite literally, as we explore the importance of biodiesel to the soybean farmer.

As you’re well aware, soybean farmers’ entrepreneurial spirit and checkoff investment helped establish and grow the biodiesel industry. To spur additional growth, Congress in 2005 implemented a $1-per-gallon tax credit for U.S. fuel blenders who included biodiesel and renewable diesel into their fuel mix.

Since then, the U.S. biodiesel market has grown from about 100 million gallons to more than 2.6 billion gallons annually. Today, soybean oil is the most commonly used feedstock in biodiesel, making up more than half of what is produced across the U.S. Biodiesel is also credited with adding between 63 and 90 cents a bushel to the price

of soybeans. In short, biodiesel works for the soybean farmer. Unfortunately, this biodiesel tax credit — BTC for short — expired on Dec. 31, 2017, and has been in limbo ever since. Two years without the credit or any certainty about the future, biodiesel producers have been forced to purchase less feedstock, putting soybean farmers at a disadvantage.

Slowing feedstock procurement was one thing. Stopping procurement altogether is another. Well, it’s happening now. Since the start of the year, 10 biodiesel producers have cut or shut down production entirely, due in part to the expired BTC.

In a new report looking at the impact of the tax incentive, ABF Economics concluded that failure to provide the tax incentive with retroactivity (from the beginning of 2018 on) would lead to a reduction of the U.S. biodiesel industry and consequent loss of jobs and economic activity. The report’s data shows that the tax incentive over the last three years has lifted biodiesel producers — and the soybean farmers who supply them — closer to or above the breakeven point.

Armed with the findings, ISA Advocate Members and farmerleaders last month stormed the nation’s capital alongside nearly 100 National Biodiesel Board (NBB) members in the name of biodiesel. During the two-day meeting, farmers and biodiesel producers met with 88 Congressional offices to urge lawmakers to renew the BTC before year’s end.

As you make the last pass in the field, I encourage you to do the same. Fire up the computer or pick up the phone and ask your elected officials to urge Congressional leadership to act now. It’s time to pass a multiyear extension of the BTC!

Michael Dolch Director of Public Affairs, Iowa Soybean Association

MDolch@iasoybeans.com

Official Notice :

IOWA SOYBEAN ASSOCIATION ANNUAL MEETING

Jan. 28, 2020 | 1:30 pm | Embassy Suites, Des Moines

All ISA Farmer and Advocate members who market more than 250 bushels of soybeans annually are invited to attend.