No Bull | The Five Spot

1 | An Observation

Never in a million years would I have imagined I would be writing updates on policy.

In fact, the most frustrating thing about writing updates on policy is detailing the domino effect.

Think about it…

The Renewable Fuel Standard was born and now we are so dependent upon ethanol that corn can’t live without it.

Then here comes California single-handedly creating a renewable diesel boom which transformed the soy complex as we know it.

Now we have 40A (which kept biodiesel afloat for 20 years) changing to 45Z which 1) kicks bean oil in the shorts and 2) has led to mass confusion as the government still hasn’t told us the rules of their new game.

And next, we have a huge opportunity for corn ethanol in SAF… but due to the government’s ignorant policies we can’t use it in SAF unless we bury CO2 a mile below ground…

…but we are a-okay with importing Brazilian ethanol to be used in its production

…and we continue to welcome a flood of (what is definitely not 100%) used cooking oil into the United States… subsidizing its imports with U.S. tax dollars.

I will leave you with this:

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." -Milton Friedman

2 | One commodity, two different outcomes

Aside from Washington's surprise $10B in mailbox money, the U.S. farmer is getting a big ole lump of coal this Christmas with front-month soybean futures down $3 year-to-date. 

Meanwhile, Santa has gifted Brazilian producers a bumper crop and a weak Brazilian real that has offset nearly 80% of those same futures losses since January.

3 | A disappointing end

U.S. farmers did get a windfall $10 billion in emergency aid in the final version of last week's stopgap bill, one resolution that would have cost the American taxpayer nothing did not make the cut.

Initial versions of the bill included the approval of year-round E15 sales nationwide.

While it would likely take a long time for this to move the needle on domestic ethanol demand, E15's approval would mark a significant step forward for the industry as every 1% increase in blend equates to more than 480 million bushels of corn demand each year.

Unfortunately, E15 was excluded from last week's bill that was passed and signed over the weekend, leaving biofuels groups in a spot they are quite familiar with - fighting tooth and nail against Big Oil for space at the pump.

4 | An outlier

Did you know China has been the world's largest CO2 emitter for 20 years running, accounting for ~30% of global emissions today? That's larger than the next five largest emitters combined!

5 | Same thing, different view

While China has the highest total CO2 emissions globally by a mile, their per-capita emissions pale in comparison to other developed nations:

For the full version of this post or to subscribe, visit NoBullAg.Substack.com.

Thanks!