Trump boosts ethanol in bid to help farmers fight inflation

The White House announced a series of steps Friday, including a boost for ethanol, aimed at bringing relief to the agriculture industry amid supply chain issues caused by the war in Iran.

The administration is increasing the volumes of biofuels like ethanol that are required to be blended into other fuels for 2026 and 2027. The Environmental Protection Agency (EPA) is finalizing what it described as “the highest levels in program history.”

The announcement came alongside other initiatives, like offering loan guarantees and easing pollution monitoring requirements that the administration says will help farmers.

The war has effectively closed shipping through the Strait of Hormuz, raising the price of not only fuel, but also fertilizer.

“You want that fair shot and a level playing field, and I’m giving that to you, and I think I’m actually giving you much better than a level playing field,” Trump said, speaking from a White House South Lawn event announcing the relief. 

Trump called the event, which featured a gold tractor, “the single largest gathering of American farmers the White House has ever seen.”

Trump also doubled down on his call for Congress to remove restrictions on selling high-ethanol gasoline in the summertime.

Some Corn Belt lawmakers sought to scrap those restrictions through a spending bill earlier this year, but lawmakers agreed instead to explore compromise legislation.

Trump said he was “trusting” Speaker Mike Johnson (R-La.) and Senate Majority Leader John Thune (R-S.D.) “to find a deal that works for farmers, consumers and refiners.”

The rollout comes as Trump faces political pressure on energy costs and affordability as a result of the war in Iran. 

Farmers and ranchers make up a large portion of Trump’s conservative base in rural communities.  However, issues related to biofuels have divided the GOP by region, as it pits corn producers against oil interests.

“You voted for me. I’ll never forget that,” Trump told the crowd of farmers. 

Among the changes Trump announced Friday was easing EPA rules regarding pollution sensors for tractors and other equipment — a move the administration says will save the sector $14 billion.

Trump said the administration would be “cutting out massive amounts of nonsense that are mandated to be put on your tractors, and all of your trucks that cost you a fortune” by easing these regulations.

“They’re going to be able to, very shortly, produce a bigger, better tractor at substantially less money,” he said, adding that tractor companies need to sell to farmers at lower costs rather than just making more money on the equipment.

He expressed disdain for environmental concerns, saying that farmers have to spend too much time dealing with “environmental impact statement garbage.”

The Small Business Administration, meanwhile, will offer loan guarantees for the agriculture and logistics industries in an attempt to reduce food prices.

Eligible small businesses include those that produce grains, fruits, nuts, vegetables, poultry, eggs, pork, beef and more, as well as refrigerated trucking and farm equipment companies. Grocery wholesalers will also be eligible.

Even prior to the latest conflict, food prices were on the rise. In February, food prices were up 3.1 percent, over the past year, while overall annual inflation was just 2.4 percent.

On the biofuel blending requirements, the Trump administration also ditched a Biden-era maneuver to expand the program that created credits for biofuels that powered electric vehicles.

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