It’s been a week since the meeting between President Trump and President Xi at the White House. Will the recent discussion lead to stronger trade relationships? Representatives from the ethanol and cattle sectors recently voiced what’s at stake for U.S. agriculture, zeroing in on fuel. Renewable Fuels Association President and CEO Geoff Cooper says one priority for the ethanol industry is restoring access to a market that was once a major buyer of U.S. products.
“China was once our second or third leading market for U.S. ethanol exports, and it was our largest market by far for distillers grains exports. That all changed when the phase one agreement came into place, and we were told that it was going to build upon the gains we’d seen 10 years ago. It has not. In fact, we’re effectively shut out of that marketplace today. We’re not exporting a drop of ethanol to China, and our distiller’s grains exports are way down to that market as well. Our message to the Trump administration ahead of this meeting was, please keep ethanol in the conversation.”
Cooper also weighs in on a possible diesel export ban and what it could mean for fuel supplies.
“We have looked at a lot of the analysis that’s been generated in the last week or a few weeks suggesting that banning diesel exports might help in the short term with fuel prices, but longer term could have the opposite effect and could actually result in higher prices, especially on the diesel side. Refiners don’t just make diesel. They take a barrel of crude oil and it becomes diesel fuel, gasoline, jet fuel, and a number of other products. So refiners have been pretty clear that, hey, if we can’t export diesel anymore, we’re going to reduce our production. We’re going to dial down our crude runs, and that means less diesel fuel, but it also means less gasoline, less jet fuel in the long term.”
Ethan Lane, the senior vice president of government affairs with the National Cattlemen’s Beef Association, explains that even speculation about major policy changes can have immediate consequences in the marketplace.
“That’s all it takes at this point to tank the cattle market for the day and cost producers a lot of money. But I think that, you know, that market reaction to simply the rumor of something like this speaks volumes about where ag is as far as this kind of stuff goes. You know, whenever you start stepping in the middle of the supply chain or trying to intervene in the free market, you start to see the ag industry really, you know, rightfully so, buckle there.”
Industry leaders say preserving trade opportunities and avoiding disruptions to supply chains remain top priorities.