Top 5 stories from Agriculture Dive

The chances of passing a farm bill this year appear more unlikely as election year politics scramble negotiation efforts and threaten delays that could last well into 2025.

Congress returned to Washington on Monday with a little less than three weeks to approve the sweeping $1.5 trillion spending bill, which includes management of the Supplemental Nutrition Assistance Program and the farm safety net. While House negotiators had planned a concerted effort to approve the legislation before the Sept. 30 deadline, the threat of yet another government shutdown could throw farm bill discussions into disarray.

“I think we’d be better off if we had a five-year farm bill, but we don’t, that isn’t going to happen,” Sen. Chuck Grassley told reporters last week, with the Iowa Republican adding that he expects a one-year extension to be included in the continuing resolution to keep the government funded.

Funding for the federal government expires Sept. 30 — the same day as the farm bill — and Republicans in the House are threatening a potential shutdown in a push for voting registration restrictions at the urging of former President Donald Trump. If the farm bill is not extended, agricultural safety net programs would be thrown into chaos beginning at the end of the year.

However, even with an extension, it could be well into 2025 before Congress is again picks up the farm bill. The election will bring in a new crop of lawmakers that could dramatically alter the makeup of Congress, including party control of the House and Senate.

A new Congress could lead to new challenges in negotiations. But it also would bring practical delays at the start of 2025 as lawmakers ease into their new positions and committee assignments are made.

"That's why it's so important to do this now," House Agriculture Chairman Glenn "GT" Thompson, a Pennsylvania Republican, said at the Farm Progress Show last month, adding "the reorganization in the House always takes some time and … there's some delay until the committees are actually appointed."

Farm groups have made a concerted effort over the last few months to energize lawmakers to pass a deal. Over 300 organizations wrote to House and Senate leaders this week saying it is "imperative Congress act before year's end" in order to address financial challenges facing farmers amid a steep decline in commodity prices.

"Failing to reauthorize a farm bill without meaningful investments in commodity programs and crop insurance, or settling for a simple extension of current law, would leave thousands of family farms with no options to continue producing for this nation in 2025 and beyond," according to the letter, which was signed by groups including American Farm Bureau Federation.

Another extension of the 2018 farm bill would mean producers are stuck with an outdated safety net system that is not in touch with current economic conditions, agricultural groups say.

"[M]any producers are facing multiple years of not being profitable and this is causing their overall financial situation to deteriorate," groups wrote in their letter calling for a new farm bill. "Some will have challenges as they seek operating credit for the 2025 crop year."

At Farm Progress, Thompson said he was "optimistic" that a farm bill could get done without the need for an extension, noting that the legislation's passage could provide Republicans a boost ahead of the November elections. Senate Agriculture Chair Debbie Stabenow, who is retiring this year at the end of her term, told Successful Farming she will do “everything in my power to pass a farm bill” before 2024 comes to a close.

However, U.S. Department of Agriculture Secretary Tom Vilsack cast doubt on a speedy resolution to current hurdles in farm bill negotiations. Vilsack said the House Republicans' draft contains funding challenges and makes changes to safety net programs that unfairly benefit certain farmers depending on the crop.

"I know that Chairman Thompson has exercised his enthusiasm and optimism for getting a farm bill done," Vilsack told reporters at Farm Progress. "I share that hope, but I think, frankly, we're going to have to get practical about this.”

A snapshot of prices received by farmers for their crops reveals broad profitability challenges in the agriculture sector as producers brace for a record drop in income.

Prices paid to soybean and corn growers in July plummeted over last year, depending on the type of grain. Specialty crops like lettuce, broccoli and cantaloupes also experienced sharp declines.

In most cases, farmers are expecting bountiful harvests this year, but heightened global competition and weakening demand has depressed commodity prices and limited producer returns. A barometer of farmer sentiment by Purdue University and the CME Group found that producers' economic expectations dropped to levels last seen from fall 2015 to winter 2016, the start of a significant downturn in the U.S. farm economy.

Primary concerns among farmers are also shifting, with more producers worrying about lower prices compared to higher interest rates or increased input costs.

"Farmers are concerned about the possibility of extended weakness in farm incomes, similar to what took place from 2015 to 2019,” James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, said in a statement.

Here's a brief look at farm prices in July:

Grain and oilseed

At $11.30 per bushel, soybean prices are 50 cents lower than June and $3.40 lower than the previous year. Record global growth in soybean production is increasing competition and hurting profits especially as top buyer China moves to purchase more commodities from Brazil.

A similar story is playing out in corn, which is down $1.98 from July 2023 to $4.24 a bushel. Prices for food grains such as rice and wheat are also down, with wheat $2.09 below last year's prices and rice $5.20 lower.

"Unless conditions change, I believe we’re heading into a perfect storm, a storm that I don’t think will be fully appreciated until early next year when farmers try to get loans but are unable to do so because they cannot demonstrate the ability to cash flow," Dana Allen-Tully, president of the Minnesota Corn Growers Association, told Congress during a hearing on farm income.

Specialty crops

Prices received by fruit and tree nut producers were more of a mixed bag in July, with some growers enjoying higher prices as a result of higher export demand and more favorable weather conditions.

Prices for oranges, strawberries and peaches all increased in July, as did returns for tomatoes and cucumbers. Orange prices rose to $20.82 a box, a significant jump from last year's $14.03.

However, prices declined for broccoli, celery, cantaloupes, grapes, apples, grapefruit and lemons. In some cases, like grapes and lemons, prices in July were lower than the previous month but higher than what they were in 2023.

Growers of almonds, walnuts, pistachios and other tree nuts again saw lower profits on their crops, with higher production depressing prices. However, increasing export opportunities in India and elsewhere could give the sector a boost in the future, according to a USDA outlook.

Meat and dairy

Cattle prices are significantly higher as smaller herds tighten overall supply. The July beef cattle price of $193 per hundredweight is $12 higher than last year. Strong prices have encouraged ranchers to sell livestock rather than expand herds, which could shrink supply even further.

Chicken prices have also risen over a year ago, bolstering meat giant profits as they contend with beef supply issues. The July broiler price hit about 77 cents per pound, roughly 10 cents above last year.

Meanwhile, robust hog supply has pushed pork prices lower. The July hog price of $68.40 per hundredweight is $5.90 lower than last year, as producers report more pigs per litter and face other challenges such as increased U.S. regulation.

In dairy, prices increased $5.50 over last year but remained unchanged compared to June. Lower projections for the number of milking cows as well as the expected milk per cow have pushed prices up. The dynamics are expected to push up prices for cheddar cheese, nonfat dry milk, and dry whey.

A bird flu outbreak in U.S. dairy cows is raising alarm bells for public health officials, who have recently called on the government to ramp up efforts to prevent the virus from spreading to humans and potentially causing another COVID-like pandemic.  

Epidemiologist Katelyn Jetelina, a popular science blogger and one of Time 100’s most influential people in health, recently spoke with Agriculture Dive about the rapid, novel development of avian influenza in livestock and how farmers and stakeholders should think about the outbreak in order to be safe.

While the viral emergence has echoes of the recent COVID-19 pandemic, Jetelina, a scientific advisor to the Centers for Disease Control and author of the newsletter Your Local Epidemiologist, said there are several key differences between the two in terms of timeline, transmission and effects on animals and humans. 

Here's what she had to say about the virus' risk to farmers, the government's response so far, and whether it's time to start thinking about vaccinating livestock.

AGRICULTURE DIVE: In terms of bird flu transmission, what are the biggest unknowns right now? 

KATELYN JETELINA: One big question is how big is the true outbreak? We truly don't know. We're basically flying blind. The second big question is how, where and when is H5N1 mutating? 

USDA recently shared a few viral sequences from animal infections. However, data was incomplete. We need to do a whole lot more testing to understand how this virus has changed over time, and therefore predict where it might end up. 

Another big unanswered question is wastewater surveillance. We created this wastewater surveillance during the pandemic which was a huge tool in understanding what areas need action. And we are starting to see H5N1 spike in wastewater, but there's a lot we don't know: Is this due to animals (we think so), versus humans? Is this from milk dumping? Is it from animal sewage? We certainly need more data and more visibility into that.

Is this outbreak more widespread than what's been reported?

Oh, yeah, definitely. It's definitely more widespread. And for two reasons. One is that it was found in the milk supply, right? And this was surprising because milk from known infected cows was not going into the market. So this confirms that the cow outbreak is much bigger than previously known. 

Second is genomic surveillance. We had a few scientists, citizen scientists walk through what they found analyzing the raw USDA data and what they found was there's an estimated spillover to dairy cows starting in December. So we think it's been spreading under our noses for a while and is bigger than what we're currently reporting right now.

Experts have made it clear that the virus is a low public risk, but what about farmers who interact with poultry and dairy cows every day? How should they be thinking about the virus and what precautions should they take?

So the risk to the average Joe on your corner in the city is very low. But I am more concerned about farmers, workers, emergency responders, really on the front line who are working with livestock every single day that are in direct and close contact. 

They should really be protecting themselves right now, especially since we don't know how big this outbreak is. We don't know how effective it’s spreading to humans. Well, yes, we have one confirmed case, but we haven't been doing more systematic or asymptomatic testing. 

And so there are a number of precautions that they can take. Unfortunately, I think a lot of people are going to roll their eyes, but one of them is wearing an N95 mask, wearing gloves and really taking those precautions seriously.”

As an epidemiologist who followed COVID-19 closely, how is this outbreak similar or different in terms of government response?

There's a lot of similarities, but there's really important differences too. I mean, some of the similarities that are kind of haunting us, and I think I think that's why a lot of us are so frustrated, is the lack of transparency, data collection and communication, right off the bat. 

This is slowly changing with H5N1, but we need to be better at that from day one. And there's a lot of differences too. One example you brought up is vaccines and treatments, right? We're not starting from zero. We have a stockpile of vaccines. We know Tamiflu works. We have some of these tools ready to engage. That was very different from COVID-19.

The other really big difference is that, I hate when people say 'this feels like March 2020,' because it's not an alarm fire emergency like we saw in March 2020 or even January 2020. I would say this is more like October 2019 where we're witnessing a spillover event and we don't know if it's gonna cause a pandemic or not. 

So the actions we are asking the public are very different from COVID, but again, the government response could certainly be better, faster.

Do you feel as though the government has been too slow to release data or is not being transparent enough? 

I think that's what has been the main frustration is that information from that response has not been easy to find, if it has been able to be found, it's not necessarily complete and not necessarily backed with data, leaving a lot of us to kind of piece together a very fuzzy picture.

I don't think it's malice, but what I do think is that there are just multiple players involved. Right? We have animals, we have humans, we have viruses, and all of these players have their own priorities only to authorities, agility, experience, politics, etc., that is really hindering a coordinated one-stop shop of information or communication. 

I will say though, that after a lot of pressure, government agencies have started finally hosting briefings for the media, as well as scientific experts, which I do think is a positive step in the right direction. 

And we can't take this long to respond because viruses spread a whole lot faster. And there's just so many practice runs we get before this starts costing lives.

There has been talk about how the U.S. is prepared to distribute vaccines if humans become infected with bird flu. But should we be thinking about vaccinating livestock and poultry?

Yeah, this is such a heated debate right now. Because there are pros, obviously to vaccinating animals. There are negatives though.

For example, it's really tough to know the difference between vaccination and infection and screening. The other thing is that this makes it, if an animal is vaccinated, it's more likely to have asymptomatic spread, right, so we're less likely to find it if there's a signal to be found. 

The other very real challenge on the ground is that exporting cows and chickens and livestock is much more difficult if they're vaccinated rather than unvaccinated. There's lots of rules and regulations around that.

What's not clear is what is the line, or that point where we have to start doing something? When is that? And it's not clear from the animal perspective, it’s certainly not from the human perspective.

I think if we start seeing human-to-human transmission, we certainly need to start really ramping up our vaccine manufacturing. I would even argue that if we start seeing this in pigs, I would start getting even more concerned because they’re such a good mixing vessel for viruses. 

What would be the concern if the virus moves to pigs?

So pigs are always kind of on our epidemiologists’ mind as somewhere we do not want the flu going. And that is because pigs are known to us as mixing vessels. 

They have both human and avian flu receptors, which makes it really easy for viruses to swap mutations. It’s really playing with fire where a virus could figure out how to adapt a lot easier to humans. 

We don't think that cows have the same level of risk of viral mutations harming humans. But again, we have so many unknowns, right? We're trying to learn as quickly as we can.

 

Cooks Venture was supposed to be a difference maker in the chicken industry. 

Instead of the typical bird raised, slaughtered and sold for the masses at grocery stores, the company contracted farmers, also known as growers, to care for a special heritage breed that had access to outdoors and grew at a slower rate. Some consumers believe these changes improve the animal welfare and its taste, according to a study.

The Arkansas-based company, initially founded in 2019 by Matthew Wadiak, the former chief operating officer at Blue Apron, launched with a focus on regenerative agriculture and touted practices to combat climate change. The company paid growers more for raising a premium product. 

Cooks Venture chicken sold for about $5 per pound, more than double the typical grocery store prices. Despite the high price tag, customer reviews were glowing, with one Reddit user saying there was never a “woody or poor quality breast” in their years of purchasing the chicken. Another reviewer touted Cooks as “by far the best” on the market, according to the company’s website.

By 2022, Cooks secured $50 million in funding to expand its poultry genetics program and operations infrastructure. As early as last summer, the company was taking on new chicken growers.

One of these new recruits was Dustin Maybee, a former construction worker from Green Forest, Ark. He told Agriculture Dive he didn’t know much about Cooks before joining but liked the idea of raising free-range chickens. Becoming a farmer was important to him as it meant more time with family and less travel for work.

“Everything was going good,” Maybee said. Then he received the letter. 

In November, Cooks notified Maybee and other growers that it was experiencing a “financial difficulty” and would close by the end of the month if it couldn’t find an investor or adequate funding.

“If this happens, we are committed to winding down the company responsibly. All outstanding fees for services already rendered will be paid as part of this process,” Blake Evans, executive vice president of the company, wrote in the letter dated Nov. 17.

Soon reports of production layoffs emerged and growers began raising questions about the hordes of chickens on their land: Would this flock get picked up for processing? If not, what would happen? What about utility bills and mortgages? Would the birds starve once the feed and water ran dry? Is there another processor available to help? 

Arkansas state Sen. Bryan King, a long-time poultry grower, thought the state should step in and offer financial support to impacted farmers. He sought for an emergency declaration, raising animal welfare, disease and environmental concerns. 

But the governor’s office declined King’s request stating that “the proper role of government does not include state assumption of private debts,” according to a letter dated Dec. 8 from Arkansas Secretary of Agriculture Wes Ward.

Even though the state dismissed helping the growers financially, the Arkansas Department of Agriculture’s Livestock and Poultry Commission assisted Cooks in the aftermath of the closure. The agency sent field workers to affected farms to smother the birds with foam to address animal welfare and disease concerns.

The deal was for the state to euthanize the birds and Cooks to handle the disposal and cleanup. This agreement led to a series of missteps and miscommunication that resulted in more than 1 million dead chickens across Northwest Arkansas and several upset, financially stressed poultry growers, who felt they were on the hook for cleaning Cooks’ mess.

Poor communication

The day before Thanksgiving, the livestock commission got a call from Cooks about the closure and what that meant for the state’s poultry growers. 

The commission “bent over backwards” through the break working nights and weekends, trying to help and answer questions from legislators and the public to the best of its ability, Ward said in testimony at a joint agriculture committee hearing on Feb. 9. But three growers in attendance countered this, saying communication from Cooks and the state was rather poor through the process.

Cooks, which was not present at the meeting, ignored multiple requests for comment from Agriculture Dive.  

“There was never any indication that they were going under,” testified Leslie Harp, a former poultry grower from Clifty, Ark. “An hour and a half after they brought me birds, they told me they were closing the company down.”

On Nov. 17, Cooks brought Harp enough chickens to fill more than two houses around 5:30 p.m. She was scheduled to get birds for three more houses the following week. In her testimony, Harp said she unloaded the last batch around 7:30 p.m. and received a call from a production manager that she would not get any more birds.

The state eventually called Harp with plans to foam her chickens. Five cases of highly pathogenic avian influenza, also known as bird flu, have been detected in Arkansas since Halloween and her farm was near another farm that tested positive for the disease, according to the livestock commission. However, she refuted these claims.

“I was not in an [avian influenza] zone,” Harp said. “I was in Madison County. AI was present in Carroll County at that time, not Madison County. I’m 35 miles away from the Carroll County line.”

The birds were about 13 days old and the grower had plenty of feed in storage to keep them fed — 144,000 pounds worth — when the field workers arrived with trucks and equipment. 

Harp said she got a 12-hour notice beforehand. “I had 72,000 birds on my farm the day they came.”

Once the euthanizing foam had settled, the birds remained untouched for 11 days. Harp said she was told that Cooks would help with the cleanup. She made phone calls, but no one answered and no one came. An overwhelming stench lingered by the houses. 

And so Harp and her husband got to work covering the dead, rotten chickens so they could decompose properly.

The rise and fall of Cooks

During the company’s launch in 2019, Cooks marketed itself as a next-generation food company rooted in “regenerative agriculture and transparency.” 

After purchasing hundreds of acres of farmland in Decatur, Ark., including a hatchery, dozens of barns, pedigree birds and more, Wadiak sought to not just sell pasture-raised, heirloom chickens, but to build a better food system. 

“There is no longer the option to continue the status quo of industrial agriculture and combat climate change,” Wadiak said in an interview with the Arkansas Democrat-Gazette in 2019. 

Cooks encouraged its growers to adopt sustainable agriculture practices. It partnered with third-party firms to assure consumers that the animal welfare claims on the package were true. The company reportedly even had USDA-approved labeling that stated its poultry came from healthier animals compared to conventional brands.

In short, Cooks was ahead of the curve. The New York Times, Bloomberg, Fast Company and other national media outlets took notice and wrote about the small but mighty chicken upstart’s efforts.

So what happened? 

A former corporate employee, who wished to remain anonymous out of fear of retribution, chalked it up to years of what they considered “business mismanagement.”

“It’s difficult to make a high-welfare bird business profitable,” the former employee said in an interview. Cook’s did not respond to specific requests for comment on their business operations.

The broiler chicken industry is complex, highly concentrated and stacked against the smaller companies, the employee said.

Typically, contract poultry growers participate in what is known as the “tournament” payment system, in which they receive bonus incentives or deductions based on the quality of their chickens. Cooks sought to deviate from this practice. 

In 2019, Wadiak told the Democrat-Gazette that poultry growers would be paid double what they typically received from other chicken companies and reward them for making modifications to their operations. He also set a goal to report on carbon sequestration and environmental efforts.

“We really wanted the people with us behind a movement,” Wadiak said to the newspaper. “There isn’t a single grocery site in the country where literally everything you buy is held to the same standard…We’re really focused on doing one thing, the right way, at scale.”

In the months before Cooks shuttered, the company made several executive changes. Wadiak quietly exited in August and John Niemann, a former Cargill executive, stepped in to usher in a new phase of growth. The company also hired a chief commercial officer to build its retail presence. 

Additionally, Cooks had invested heavily to expand a deboning facility in Jay, Okla., and sent a news release about a new certification for its chicken products with an embargo dated Nov. 14.

At that point in time, there was no outside indication that the company was struggling financially to the point of collapse.

"Food is fuel," as the old saying goes. And with agriculture playing a larger role in a global desire to move to renewable energy, that adage is becoming quite literal. 

To reduce carbon emissions and industrial practices on farmland, an increasing number of producers are finding ways to get the most out of their operations using sustainable methods that also carry revenue opportunities.

Farm renewables are expected to grow this year following the latest U.N. climate summit, COP28, where some of the largest food companies committed billions of dollars and outlined plans to cut methane emissions, transition away from fossil fuel use and support farmers adapting their operations and practices to accomplish their sustainability goals.

Despite pushback from critics who claim that many of these solutions are “greenwashing,” farmers are making a number of unprecedented changes on the farm. With new funding available, farms are harnessing electricity from wind turbines or solar panels to power their operations, transforming dairy cattle waste into rich biogas or growing crops to be crushed into biofuel for aviation.

Here is what to look for when it comes to renewables on the farm in 2024.

Farming off the grid

As more capacity comes online, wind and solar is expected to grow by a combined 39% in 2024, overtaking electric power generation from coal for the first time ever, according to the U.S. Energy Information Administration. But getting there is going to take a lot of land.

Agrivoltaics, or farming and generating electricity on the same land, is one part of the solution. The practice can not only help farmers diversify their income, but also reduce their energy consumption in the face of climate change.  

Developed by two European researchers in 1981, agrivoltaics can involve growing crops and raising livestock on the land beneath or between solar panels. Still a relatively new practice in the U.S., the most common applications include apiaries or sheep grazing operations, but farmers are also raising vegetables, chickens and rabbits.

“There’s lots of innovation in the space,” said Stacie Peterson, energy program director at the National Center for Appropriate Technology, an organization focused on farm and sustainability solutions. “And we’ve seen a lot more growth this last year.”

The National Renewable Energy Laboratory identified 477, agrivoltaic projects representing nearly 7.2 gigawatts of solar capacity, with more than 150 projects added over the last nine months.

These projects create new revenue streams for farmers. Those who install their own panels can lower their own energy costs while selling excess power to utility companies or co-ops. Additionally, farmers can lease out their land to solar companies, reducing some of the upfront infrastructure costs.

In addition to generating enough electricity to power nearby residences, the solar panel infrastructure could actually improve farming operations. 

Solar panels act as shade for crops and livestock, creating a cooling effect that can reduce overall water usage. This can be useful for water-intensive crops grown in California, Oregon and other states, Peterson said. 

However, farmers must do plenty of research to ensure agrivoltaics is the right fit for them. Federal grants and loan opportunities have made it more cost-effective to build renewable infrastructure, but it also depends on what farmers do with the land, Peterson said.

“It can be a lot more expensive in some cases,” she said. For example, cattle co-location requires more steel for additional fencing, while harvesting honey or raising sheep can be less costly.

Other challenges can be policy or grid-related. Utilities infrastructure varies across the country, creating limitations for what farmers can do with their generated electricity. Some agrivoltaic operations are too small to sell directly to power companies, so instead they sell to cooperatives or third-parties. Farmers also can store their own electricity for later use.

Depending on the size of the operation, the site could be classified as an agrarian or industrial site, creating serious tax implications. And although agrivoltaics is meant to ease land use conflicts, community buy-in will still be key to getting projects off the ground. 

“You have to think about the impact it has on a local community,” she said in regards to changing the cultural landscape of a place.

Biodigesters

It’s no secret that cows have a methane problem.

Livestock accounts for about 33% of the nation’s methane emissions, according to the U.S. Environmental Protection Agency. Most of that comes from enteric fermentation, the process by which cows digest food, but a good amount is also traceable to how animal manure is stored and managed. 

One way farmers are working to solve the issue is through a process called anaerobic digestion, which diverts methane emissions by transforming waste into rich biogas.

John Forcier, a biogas and anaerobic digestion expert, said he sees the technology not only as a way to improve the environment, but also as a potential revenue stream to help save small- to medium-sized family farms in his home state of Vermont.

The digesters themselves are airtight vessels in which bacteria breaks down organic matter, such as manure, to create usable gas. Once captured, biogas can produce heat or electricity for use in engines, turbines or fuel cells, according to the Environmental and Energy Study Institute. It can also be further processed into biomethane and injected into natural gas pipelines or used as vehicle fuel.

On-site digesters also process waste into a less smelly, nutrient-dense digestate that is spreadable on farmer fields, reducing the need for chemical fertilizers by as much as 50%.

“It’s truly a win-win-win [scenario],” Forcier said.

These large, pressure cooker-like machines have grown in use and popularity among farmers over the years. According to the latest USDA data, the number of on-site anaerobic digesters peaked at 322 in 2021. Meanwhile, oil giants including Shell and Chevron are exploring the potential for biogas as entire businesses crop up to help farmers transform food and farm waste.

While adoption is trending upward, there are barriers to entry. According to the U.S. Environmental Protection Agency, there are significant upstart costs that could outweigh the benefits of operating a digester, including more staff and permit requirements. Revenue from renewable electricity generation can also often be too low to make up for the deficit.

In recent years, environmental advocates have also pushed back against anaerobic digesters, arguing the machines actually undermine efforts to fight climate change. Biogas facilities have been found to leak and spill sludge, proliferating air and water pollution, according to a letter signed by 200 environmental groups.

Forcier acknowledged that biodigesters can cause environmental problems when farmers don't “maintain it as well as it should.”

“But with the right technology, the right feedstocks, the right recipe and assistance on all that, it’s really simple,” Forcier said.

New markets for biofuels

Although the ethanol market faced some headwinds in 2023 with the expansion of electric vehicles, new opportunities for corn or soybean-based fuel could be on the horizon. 

The U.S. Environmental Protection Agency disappointed biofuel advocates last year after it pulled back on potential biofuel targets. Once touted as a sustainable fuel for passenger vehicles, ethanol is now taking a backseat as the electric vehicle industry skyrockets. 

Instead, farmers are finding more demand for the renewable diesel industry to power heavy industries that are difficult to electrify. Fully electric planes and cargo ships, for example, are not yet practical, making biofuels an important solution.

Tons of new capacity for renewable diesel, commonly made from soybeans, have come online in the last year or so, and more construction is underway in the Midwest. Meanwhile, more agriculture companies are working hand in hand with oil giants to find sustainable solutions for aviation and marine fuel.

Scott Richman, chief economist at the Renewable Fuels Association, said ethanol production will likely increase incrementally from last year, while renewable diesel is set for major growth. He also expected sustainable aviation fuel to take off.

“They have a lot of potential,” Richman said about the burgeoning biofuel categories.

The Biden administration recently announced new opportunities for agriculture producers to receive tax credits for sustainable aviation fuel. Oil giants like Chevron have also looked to substantially increase biodiesel capacity to help the maritime industry transition to low-carbon fuels. 

To meet growing demand for biodiesel, farmers are beginning to plant more soybeans instead of corn. Soybean futures are nearly triple the current price of corn, according to the Chicago Mercantile Exchange, and farmers can get a better price as more crush capacity becomes available. 

Capacity for sustainable aviation fuel is also growing. Lanzajet, one of the leading U.S. companies in the sector, recently developed a technology that transforms ethanol into sustainable aviation fuel, which can immediately be used as drop-in fuel for existing aircraft to cut down on carbon emissions. The fuel is currently being processed at a factory less than 100 miles from Savannah, Georgia.

“That should provide more market opportunities for 2024 than was the case in 2023,” Richman said about continued buildout in the renewables space.