Trump raises ethanol prices and promises to increase biofuel blending to support farmers

The White House on Friday announced a series of measures aimed at supporting the agricultural sector amid the problems caused by the war with Iran. The authorities promise to raise ethanol prices, increase the mandatory share of biofuels (in particular ethanol) in other types of fuel for 2026 and 2027, provide loan guarantees and relax pollution monitoring requirements.

The blockade of the Strait of Hormuz has led to higher prices not only for fuel but also for fertilizers, which has hit farmers hard. However, Trump has said that he will “give farmers much better than a level playing field.”

He also called on Congress to lift restrictions on the sale of gasoline with high ethanol content in the summer. Some lawmakers from “corn” states tried to lift those restrictions earlier this year through a spending bill, but lawmakers agreed to consider a compromise bill.

Amid political pressure on the administration caused by rising energy costs due to the war in Iran, Trump said he “trusts” Speaker Mike Johnson (R-Louisiana) and Senate Majority Leader John Thune (R-South Dakota) to “find a deal that is good for farmers, consumers and refiners.” After all, biofuel issues have divided the Republican Party along regional lines, as they pit corn producers against refiners.

Farmers are a major part of Trump’s rural electorate, so Trump has vowed to “never forget that” and support them. He has promised to loosen EPA regulations on pollution sensors for tractors and other equipment (which the administration says will save farmers $14 billion), saying it will “cut down on a huge amount of the crap that is necessarily put on your tractors and trucks and costs a lot of money.”
At the same time, Trump once again expressed his disdain for environmental issues, saying that farmers have to spend too much time reviewing “garbage environmental impact statements.”

Meanwhile, the Small Business Administration is introducing loan guarantees for the agricultural and logistics industries in an effort to lower food prices.

Small businesses eligible for assistance include producers of grain, fruit, nuts, vegetables, poultry, eggs, pork, beef, etc., as well as companies involved in refrigerated transportation and agricultural equipment. Food wholesalers will also be eligible for assistance.

But food prices in the US were rising even before the war with Iran. In February, they rose 3.1% from a year earlier, while overall annual inflation was just 2.4%.

Tags: USA, biofuel