Shutdown Halts Some Payments and Loans to Farmers

The U.S. federal government shutdown will stop some payments to farmers and also delay access to federal farm loans. Reuters said it’s one more blow for producers already struggling with low crop prices, record-high debts, and a trade war at the height of the fall harvest. Republican and Democratic lawmakers couldn’t agree on a plan to fund the federal government, and this will last until one party gets enough votes for its funding plan. “Even short interruptions in payments could deepen farmers’ economic turmoil,” said Chad Hart, an agricultural economist with Iowa State University. “After all, it costs money to run those combines at harvest.”  While administration of nutrition programs and food inspections will continue, much of USDA’s other work will cease. That includes processing farm loans and making payments to farmers, including billions in disaster aid. It will also not process annual commodity and land conservation payments typically issued by October. 

Senators Want Final Import RIN Reduction Rule in Place

Senator Chuck Grassley of Iowa led over 45 Senate and House colleagues in urging the Environmental Protection Agency to finalize a rule on imported Renewable Identification, or RIN, Numbers. They also want the agency to hold firm on the proposed biomass-based diesel volumes. In a letter to EPA, lawmakers said such measures would ensure the Renewable Fuel Standard continues to strengthen American energy security and support America’s farmers and renewable fuel producers. “While many farmers are struggling to break even, all federal biofuels policies should prioritize domestic agriculture and biofuel production, not foreign fuels made from foreign feedstocks,” the letter said. “Also, while farmers face the uncertainty of foreign market demand, the Import RIN reduction would provide support for the farm economy, so farmers could sell more products domestically.” Earlier this year, the EPA proposed record biomass-based diesel volumes, including a 50 percent reduction in RINS for imported renewable fuels. 

Support Coming for U.S. Soybean Farmers

The federal government will support America’s soybean farmers as China refuses to buy U.S. soybeans and will make an announcement on Tuesday. That announcement came from U.S. Treasury Secretary Scott Bessent. “You’re going to see substantial support for the farmers, and we’re also going to be working with the Farm Credit Bureau to make sure that farmers have what they need for next year’s planning,” Bessent said. “It’s unfortunate that Chinese leadership has decided to use the American farmers, soybean farmers in particular, as a hostage or pawn in the trade negotiations.” Agriculture Dot Com says Chinese importers haven’t bought any soybeans from America’s harvest during the trade war between Washington and Beijing, costing U.S. farmers billions in lost sales. America’s farmers overwhelmingly voted for President Donald Trump in 2024. The president said soybeans will be a major topic of discussion when he meets with Chinese President Xi Jinping in four weeks. 

California Governor Signs E15 Bill

The Renewable Fuels Association applauded California Governor Gavin Newsome for signing Assembly Bill 30 into law. AB30, which passed unanimously out of both the Assembly and the Senate, immediately legalizes lower-cost E15 fuel in the Golden State. Prior to the signing, California was the only remaining state in the nation where E15 sales weren’t allowed. “California is on the road to lower gas prices and a cleaner future for families across the state,” said RFA President and CEO Geoff Cooper. “Many other states have already seen the benefits of E15, including healthier air, better engine performance, and costs savings at the pump.” California drivers are about to experience those same benefits for themselves, and RFA thanked Governor Newsom for voicing his support for E15 through the legislative process. Recent studies have shown that E15 could save California drivers $2.7 billion annually, or about $200 per household, while significantly cutting tailpipe pollutants.

Ethanol Production Falls

The Energy Information Administration said U.S. ethanol output dropped during the week ending on September 26. Production fell to an average of 995,000 barrels per day from 1.024 million a week earlier. Agency data also said that’s down from the 1.015 million produced during the same week in 2024. In the Midwest, output averaged 940,000 barrels a day, down from 964,000 during the previous week and 961,000 at the same point a year ago. East Coast output was down by 3,000 barrels to an average of 10,000 barrels a day, and Rocky Mountain production declined by 2,000 barrels a day to 11,000 per day. Gulf Coast production was unchanged from the previous week, while the West Coast was the sole gainer, rising 1,000 barrels a day to an average of 10,000 barrels a day. Ethanol inventories through the week totaled 22.8 million barrels, down from 23.5 million during the prior week. 

New President Takes Over NCGA

Jed Bower, a fifth-generation corn and soybean farmer from Ohio, began his term this week as president of the National Corn Growers Association, saying the challenging rural economy will be his top priority in the year ahead. “We need new markets to help alleviate the economic crisis that’s threatening the survival of countless family farms across the country,” Bower said. “That’s why we will continue to encourage Congress to act immediately to pass legislation that expands consumer access to higher blends of ethanol year-round and urge the Trump administration to move quickly to develop new foreign markets.” Grower leaders have ramped up pressure on Congress to pass the Nationwide Consumer and Fuel Retailer Choice Act of 2025, which would eliminate a dated clause in the Clean Air Act that prevents the sale of E15 during the summer months. Growers argue this change would provide more predictability and boost demand for corn.

Friday Watch List

Markets

As the government shutdown enters its third day, again major agency reports are delayed/canceled including the weekly Commitments of Traders report from the CFTC. There are a few Federal Reserve governor speeches scheduled throughout the day which investors may turn to for guidance in lieu of September employment data which had been scheduled for release from the Bureau of Labor Statistics.

Weather

A front has moved into the Northern Plains and sits there on Friday. A storm system in the West will produce showers up that way throughout the day Friday. Some very spotty showers will be possible in other parts of the country, but it will continue to be mostly very warm and dry heading into the weekend.