The Frozen Economy

March 26, 2020

Hello everybody out there in farm country. This radio commentary is brought to you by
the National Corn Growers Association, CropLife America, and Renewable Fuels Association.
They are all friends, supporters, and allies of a healthy farm economy and prosperous rural
America. Thank you.

And now for today’s commentary –

After months of uncertainty, the biofuels industry got some good news. The EPA had
been granting exemptions to small refineries so they were not required to blend ethanol with
petroleum fuel. A January ruling by the 10 th U.S. Circuit Court put a stop to EPA’s small
refinery exemption. Then we heard information from the Administration that the Justice
Department might challenge that Court decision. President Trump said this week the
Administration would not challenge the Circuit Court’s ruling. Thank you President Trump for
standing up for the ethanol industry. Thanks to Iowa Senators, Chuck Grassley and Joni Ernst
for their efforts. We are already suffering enough with the collapse of oil prices. The
Coronavirus has frozen the global economy and our farmers depend on global markets. A month
or two ago we had limited optimism about farm prices and income in this new year. USDA
projected net farm income to be up 3% to $96.7 billion. The President’s deal with China has
started to pay off. They are buying corn, wheat, pork and chicken big time. Still it’s hard to be
optimistic.

Zippy Duvall, American Farm Bureau President, reminded us, “the stress out there in
farm country is really high-level.” Corn and dairy prices have fallen. The milk market can’t get
any lift. The collapse of the oil market has hammered the price of ethanol and that has pulled
corn down. Remember – about half of our corn crop is used to produce ethanol. I know that
China will need some soybeans, but how much is the question since African Swine Fever has
killed half of their pigs. With the economy around the world shutdown to stop the spread of the
Coronavirus, how long can we afford to sit around like this? Europe is asking the same question.
French President Macron said, “It is impossible to live – even in self isolation – and to cure
people if we do not continue economic activity.” President Trump wants the U.S. to go back to
work by Easter. Let’s hope that we can. Last Tuesday was Ag Day – but under current
circumstances it wasn’t much of a celebration.

Until next week, this John Block reporting from Washington, D.C. If you would like to
review my radio shows going back more than 20 years, just go on-line to
www.johnblockreports.com.