Farm, fuel leaders push for solutions to close Iowa’s corn ‘demand gap’

A new report points to the growing gap between the amount of corn Iowa grows and demand for the crop, and suggests new pathways that could keep demand — and prices — up.

The study, prepared for the Iowa Renewable Fuels Association and Iowa Corn Growers Association by Urbandale-based economic research and analysis firm Decision Innovation Solutions, reports that Iowa corn producers continue to lead the U.S. in corn production.

However, if demand isn’t buoyed through increased ethanol use or through the ultra-low carbon ethanol market, the study warns that a $2.50 drop per bushel of corn could “erase $6.9 billion in gross income from corn farmers in Iowa using 2025 production.” At this rate, the report states, by 2050, farmers could lose $9 billion in gross income per year.

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Monte Shaw, executive director of the Iowa Renewable Fuels Association, said Iowa farmers and the state’s agriculture market are currently in a crisis that mirrors the farm crisis of the 1980s.

“I'd say it's a ‘small c’ crisis, but I think if we don't do anything in the next couple of years, or sooner, it's going to be a ‘capital c’ crisis,” he said.

Agriculture economists said year-round production of E15 — a gasoline blend that is 15 percent ethanol — would help boost demand for Iowa corn.

More than half the corn produced in Iowa — and about 40 percent nationwide — is used to produce ethanol. Currently, the dominant form of vehicle gasoline in Iowa is E10, made up of 10 percent ethanol.

Advocates said moving to a fuel blend with a higher concentration of ethanol would close Iowa’s demand gap by 2031.

However, Dave Miller, senior economist with Decision Innovation Solutions, said this wouldn’t be a permanent solution to the state’s corn demand issues.

“E15 is not a sufficient long-term solution,” Miller said. “It is a near-term solution that is very powerful.”

Miller said corn makes up about 29 percent of Iowa’s overall agriculture cash receipts, making it the biggest driver of the state’s agriculture economy, while 24 percent is from hogs, 18 percent is from soybeans, and 17 percent is from cattle. About 12 percent of the state’s total ag cash receipts of $37.6 billion comes from “other” production.

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A need for permanent solutions

Mark Mueller, president of the Iowa Corn Growers Association, farms corn and soybeans in near Waverly. He said he’s concerned about Iowa’s current corn market.

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“I am a fourth-generation farmer, and I am nervous that there won't be a fifth generation Mueller farming on my family land,” he said in virtual press conference Wednesday that shared Decision Innovation Solutions’ findings. “We need more places to move our corn, and while Iowa Corn is working toward that, it's just a tough, tough road for the farming community.”

To find a more permanent solution and create better balance between supply and demand of Iowa corn, the economic research company identified new pathways that could absorb Iowa farmers’ surplus corn and make demand sustainable.

The study pointed to the ultra-low carbon ethanol market, which involves lowering the carbon intensity of ethanol through carbon capture sequestration.

Shaw said work like that already is underway in Nebraska, which is home to the Tallgrass Trailblazer CO2 pipeline. The pipeline started moving emissions from nearly a dozen Nebraska ethanol plants and one in Iowa in November 2025.

A similar pipeline has been proposed by Iowa-based Summit Carbon Solutions. The 2,500-mile pipeline would pass through five states, including Iowa, to capture CO2 from ethanol plants and bury it in North Dakota.

The Iowa study also pointed to new industrial markets as another path forward for corn growers. Miller said big markets, like marine fuels, are pivoting from fossil fuels and looking toward ethanol and methanol fuels.

Miller likened it to the sustainable aviation fuel market, which he said is a 35 billion gallon a year market.

“Our projections would suggest that ethanol could take maybe about 20 percent of that market. It's a solution for the future in Iowa,” Miller said. “The biggest demand changer we've had in Iowa in the last 20 years has been ethanol. The growth of the ethanol industry has really transformed Iowa.”

Shaw said Iowa’s agriculture market is at a tipping point as producers are “desperately” in need of new pathways for demand.

“If not, I think we have some very bleak days ahead of us,” Shaw said. “We don't want the current farm income price crisis to go from a ‘small c’ to a ‘capital c.’”

Olivia Cohen covers energy and environment for The Gazette and is a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues. She is also a contributing writer for the Ag and Water Desk, an independent journalism collaborative focusing on the Mississippi River Basin.

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Comments: olivia.cohen@thegazette.com