Ep. 327 (Coffee Time) Iowa’s Proposed Healthy Water Bill and Congress’ E15 Fuel Issues
A lot going on in the world of conservation and ag this week. First, we dive into the new Healthy Water Act that the Iowa Democrats have put forward. Secondly, we discuss the E15 Fuel issue that the federal legislators are "figuring out". Both of these policies would have major ramifications for the Midwest. One for our health, and the second for our economy. You will definitely want to check out this episode.
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Nicolas Lirio (00:00.334)
Yesterday it was cold, but I've been making myself get out in the cold and go on walks. Oh no, no, this is good. This is good. This is good. Homeostasis. We've talked about like, Oh, you can be an air conditioner. You can be a heat whenever you want. Our bodies think about how often you go through the homeostasis process compared to what they did a hundred years ago. Like that has anybody ever studied? So I know homeostasis isn't a verb.
I got a way better cold open than whatever this is.
Kent Boucher (00:25.13)
Say that again.
But like homeostasis is the process of our body regulating its internal world against the external world. Right. It also happens for your souls as well, but we don't need to get into that. So the process of maintaining that homeostasis is like a whole ordeal. mean, everything sweating, fevers, shivering, goosebumps, you know, there's heart rate, heart rate. There's tons of things that go into it. We don't really have to go through that anymore.
you're saying you're saying we have made our lives in such a way to limit the amount of disturbance to homeostasis.
Goosebumps used to be a daily thing that happened every morning when it was chilly. Every single morning. And it just, we're just like.
Yeah, that's a point. We should all do tallies when we've had goosebumps over the course of a week. it can't count like you're watching a horror movie and the hair stands up on the back of your neck or whatever. is thing. It's got to be true because I was experiencing enough cold that my body, my teeth start chattering and I got goosebumps.
Nicolas Lirio (01:25.71)
It's not me, believe me.
Nicolas Lirio (01:37.71)
And it's painful for like five minutes to go through that process, but within a few minutes you get used to it and you're like, okay.
Well, with that exception, you mean, like you have have to, or within a limit. Within a limit.
I got us a coat on this time. You can't just stand out there in the birthday suit and be like, I'll just chatter my teeth to stay alive. I'll fall upon you.
But I went on a walk. I want to walk on Sunday after church. was, I mean, it was like four degrees outside and the wind chill was brutal. And I had, I didn't have a coat on. I had two sweaters on a scarf and a hat and I had shorts on under my pants and it was flipping miserable for about 10 minutes. And then I turned around and I walked with the wind instead of against the wind. And I was like, fine. And now obviously going with the wind has a big part to play in that, but
Also my body was getting used to it and, then I had a high, like I couldn't describe the afterwards and there, he nothing else was involved. was just, it was like,
Kent Boucher (02:42.766)
Plunge and ended up on the news
Sir your knees are purple. No, I it felt good. I don't Riley when he was the last time
I feel so good! out here!
Riley Rozendaal (02:57.288)
I go on walks a lot this time of year. Usually I wait until February though. I want some uncomfortableness.
Riley confessed to me this morning that January is his least favorite month.
It's long, it's dark. The outdoorsman in me really is looking forward to it.
Sorry, dude.
Kent Boucher (03:16.322)
Yeah, Riley and I are going to do some shed hunt together. were planning on this this morning before you got here. Wow. I, I, I, don't, know I can say that to you cause you won't feel bad that you're not invited.
That's a...
Nicolas Lirio (03:27.31)
Yeah, at IPN I forgot that I put that anime piece in my in my intro bio. So for anyone listening, Ken and I were at a little talk at Iowa Prairie Network and it was wonderful. Thank you for inviting us, Tony and Laura. That was it was awesome. And and all the speakers there were fantastic. But I forgot that I in my bio, I say something of the sort like if I'm not like dealing with Prairie or on the farm.
Man.
Nicolas Lirio (03:55.478)
you can find me doing these other things. And the last one that I emphasize the most is watching anime.
He's becoming ashamed people.
I'm not ashamed. just wasn't a crowd. And, but something tells me that about half the people in that room watched anime. So, that would have been a good one.
You know?
Kent Boucher (04:15.32)
That'd be a good Nestle bet right there. Yeah, percent, nobody would admit the truth though. Yeah.
Would you have raised your hand Riley? I don't know. If I asked.
That's me. Riley had the coolest coat in the entire building.
crowd is hard to
Riley looked awesome.
Riley Rozendaal (04:30.956)
That was a Pella brand. I was gonna flag you down on it, but I forgot.
Okay
Yeah, I don't know if he does, but I gave it a little feel. was like, I was like, was like, wonder what? Wonder who made this? It's sweet. man. Was it your grandpa's? Yeah. Yeah. Is this old school? I think they call it duck camo. Don't they? Yeah. Like from the is probably from like the fifties and sixties era is when that came out.
Yeah.
Nicolas Lirio (05:01.58)
your grandparents clothes as a conservationist should be the coolest thing you can do.
Dude, I grew up wearing a lot of my grandpa's hand-me-downs.
Yeah, it's especially like work clothes. don't it's just.
I was usually stuff I'd wear to church like an old dress shirt or
That much less cool. Much more like we're getting colder on the hot and cold. And we should we got to two topics today and they're both very large. We should we should jump right in.
Riley Rozendaal (05:33.006)
you
coffee time Wednesdays with the Prairie Farm podcast. Can't hit us with the jingle. Do do.
Do do do.
Nicolas Lirio (05:47.106)
Welcome back to the Prairie Farm podcast, Coffee Time Wednesday. I'm your favorite host, Nicholas Lirio, favorite co-host, Kent Boucher, and favorite co-host to the coast, Riley Rosendahl. Man, we've been together twice in a row now. Kind of crazy. We have a couple of big topics today. Kent in our group chat said Judd should join us. Did you think Judd was going to be here?
Good to be back.
Howdy, howdy.
Kent Boucher (06:09.762)
Joe was gonna be okay because of the auction stuff which we should tell everybody about yeah have a if you want a piece of a Huxley lore we are having an equipment auction on I believe the date is February 24th through DPA
Yeah, think also knows Dell Peterson. Yeah, I remember correctly. Judd is handling the stuff. If you have specific questions about it, info at Hoxie Native Seeds or Judd at HoxieNativeSeeds.com. free. We have a I've been going around to like local establishments being like, hey, I need you to get people to start gossiping about this. But.
be some cool stuff on there. A lot of AC tractors.
There is, now to be fair, we're not selling, well no, we're selling a couple of gleaners that we've used for combining. For the most part, we're not selling any all crops. don't think we're selling any all crops. Okay, and then swathers, we're not selling any swathers. Most of the stuff.
There'll be three all crop
Kent Boucher (07:07.192)
There will be one old Armitana
Good, good. So there is literally stuff on there that we use for harvesting prairie. Now I always have to put a big caveat because when the neighbors. Yeah, yes, yes, yes, yes. Those hoxie native seeds drills are going to sell for like literally half what they're worth, half what we're selling them for. You should if you need one or you're looking at being a contractor or you've been growing out your land management business for real. I'm not kidding.
I got on rails on their
Nicolas Lirio (07:37.836)
I think it's going to go as such a good deal that I texted a couple of the contractors that we work with and said like probably the cheapest deal ever by one of these things because they don't wear out. So unless someone literally gets out less, someone who owns one gets out of the business, they'll never like go up for sale. They, we still rent out the original ones that we built over a decade ago. So like they last forever. So it's like, you're not going to see them go up for auction unless someone's literally retiring anyway. So we have,
We had basically two extra that we didn't really need. They were just sitting there. But yeah, so if you're looking, if you do some prairie work, whether it's on other people's land or your own land and you're wholesaling or whatever you're doing, there's a good chance there's something here for you. Give it a check.
That's why I thought job is gonna be here today cuz it's kind of spearheading the the auction thing So I thought we were gonna have like a good panel of all four of us, which would have been awesome But we miss you Judd, but I already talked to Judd I had a great cold open topic that Involved why I called Judd this morning, but I'll uh Yeah, I'll save it for next week. We'll probably forget. Yeah
You save it for next week?
Nicolas Lirio (08:46.038)
A lot of things happened in the week that we get a gossip about. Riley Pick, who's going first? What topic are we doing first?
big topics that could eat up the entire rest of the
podcast.
Rest of the afternoon.
I think probably ought to start with the water quality because I think it's been a more ongoing. Yeah, we hit it like more consistently.
Kent Boucher (09:12.972)
Yeah. So Thursday of last week, which would have been what? Saturday was the 24th, so it would have been the 22nd. 22nd man. Math was just very hard for me right there. So on the 22nd and today is the what? 27th, yes. So five days ago. The Iowa House Democrats proposed the Iowa Healthy Water Act.
Well, that's good.
Kent Boucher (09:43.574)
so in response to the ongoing conversation about Iowa's water quality plight and Iowa's cancer problem, right? it's, really like, if you, I think it's, maybe this is just a local bias, but there's been enough talk of it from national media sources that I think if you went around the country right now and
said what's one problem that Iowa has? I think probably seven out of 10 people would, I'd bet a Nestle on seven out of 10 people would probably say cancer or water, you know? maybe that's a little high but.
Probably the only ones on anyone's radar.
But definitely those two I think would be at the top of that list. And so there's enough conversation around it that people are starting to move. And Nicholas, I'll give him credit, he said he thinks the next gubernatorial race will be determined by whoever gives Iowa, gives Iowans the most confidence.
in the fact that they're gonna prioritize our water quality. And so Iowa House Democrats are doing just that. They proposed this Iowa Healthy Water Act. just, I'm gonna, for sake of taking too much time here, I just wanna hit the high points of what would be included. And I got this from the Iowa Capital Dispatch, which is a great resource. It is written by Robin Opsal.
Kent Boucher (11:33.334)
I think, or Opsil, I'm not sure how pronounce her last name. But the first thing that was listed was $600,000 in statewide or in state funding for statewide water monitoring programs led by, they just said regents, institutions, which I found out means University of Iowa, Riley's alma mater, UNI, and then Iowa State University.
So to me that means there's going to be input from these universities as far as a water quality monitoring program that works in tandem with the Iowa Flood Center, which I think came around in response to all the flooding from the Cedar River around 2008, I believe. Then.
And this is where we need some clarification here. It mentioned that the Iowa Water Quality Information System, our dear friend Dr. Larry Weber works with both of these institutions, believe, the Iowa Flood Center and because it is under, you knew that, IHR, think, isn't it?
I H H R. Yes, I'm sorry. Yeah, sorry guys. It's so it's at the University of Iowa. It's basically it's it's it's the it's their department that studies water and there's several different programs and organizations under its umbrella.
FC or is it GMZ?
Kent Boucher (13:08.728)
Which is where the clarification is needed here. No fault of the article writer, I don't think. I think it's just kind of murky to understand. they said that the Iowa Water Quality Information System, the thing that Dr. Weber is involved with, which lost its funding because of state Republicans, right? That would be fully funded going forward.
And the reason I need clarification here is because not only are these two departments related, but the amount, $600,000 was the amount I believe, if I remember correctly, when you guys did that previous coffee time, that's the amount of money needed to fully fund IWQIS. And so I'm guessing that's the same $600,000, but I don't know for sure. Also along with that, Iowa DNR does quite a bit of water.
quality monitoring as well, especially at our beaches, you know, Iowa Great Lakes region, Rathman and Red Rock.
I think Red Rock is army corner.
Well, is Army Corps with Rathbun as well maybe?
Nicolas Lirio (14:20.908)
I, well, they're definitely Sailorville. Sailorville and Red Rock for sure. I'm not sure.
So wherever they they currently are doing it they'll continue to do that Which is good to know that there's that other wave of that monitoring going on to you And then here's where things really start Getting to be significant as far as money being put towards this
The the this Iowa Healthy Water Act proposes to triple the state funding For Iowa's nutrient reduction strategy currently we're sitting at 10 million So this would take us to 30 million dollars in state funding for the nutrient reductions strategy and Within that this is where things affect farmers, right? so
There's no mandated conservation practices included in this. So in other words, we recently talked about the buffer strip pilot program. It's not, this bill would not do what happened in Minnesota as far as every waterfront property is going to have to have a buffer strip. So it's not, it's not mandating anything. But
It will increase the funding that is available for, I assume, not just farmers. They say farmers a lot, but I assume that also means landowners because we do have a lot of people who cash rent their land but don't farm it. So it'll pay for buffer strips, cover crops, bioreactors, and wetlands, which I think would include the Iowa Wetland Mitigation Bank. My guess is some funding would go to that.
Nicolas Lirio (16:06.124)
I hope so, yeah. Yeah, I do too. Yeah, think they do a good job.
So all these programs that we've talked about many times through the podcast are going to, there's going be money on the table for landowners. I assume landowners are not just farmers. And I draw that distinction because I could see it potentially being just farmers. Like every year we have to turn in our acreage reports to the USDA. And so they might go that route for making that money available. But my guess is it'll be for any landowner who wants to participate.
So that that's what that tripling of money is going to go towards. Now, there's going to be some additional incentives added on to that, which which I like. So there's two tax incentive programs. One is an income tax credit for again, they say farmers, I'm assuming it means landowners. That is
refundable for up to 50 % of the out-of-pocket expense for putting these nutrient reduction practices. And yeah, basically a cost share that comes out of your income tax. right, and I think that's another great, you know, so often we look at subsidies as only being in the form of giving you something, but sometimes a subsidy can be nice, and it's not technically a subsidy then I suppose, but
cost share
Nicolas Lirio (17:19.355)
yeah, yeah, tax credit.
Kent Boucher (17:35.01)
but an incentive can be, we're just not taking something from you.
Yeah, and you're more likely to be responsible because you still see it on your bank account, right? On your ledger as opposed to like, this don't worry. This money's coming right later. You're going to be more responsible because taxes don't necessarily always feel like an expense sometimes. And I'm not trying to bash on tax, but it can feel kind of like, this is just being taken from me. So they're just going to take less. It doesn't feel as much. So I think people will be more responsible and more. There'll be less waste involved in.
the process.
Yeah. And then the other tax incentive is tied to property taxes instead of income taxes. And that one is you would receive $5 per acre of tax credit for where you have these nutrient reduction implementations put into place. So I love those incentives. I think they're great. They make sense. you know,
I know 30 million sounds like a lot of money, on a statewide level, it's not that huge and not super expensive. And then here's the most interesting one. And I want to have little conversation here too about as far as the nutrient reduction strategies that are approved. It would also provide zero interest loans for ag equipment linked with improved water quality.
Kent Boucher (19:07.536)
What is the first thing?
Right on the shelf if you guys need service.
Like dangerous right there
What do you, what do you guys, what's the first thing besides our wonderful native seeder, what is the first piece of ag equipment that the average row crop farmer is going to have that that's what the first thing I thought of is I wonder if, I wonder if a no till a planner would count as something being linked to better water quality. Cause that is one of the advantages that, that,
drill.
Kent Boucher (19:40.776)
one of the primary advantages to adopting no-till cropping practices. And so I wonder if people are to be able to go and buy a new Kinsey or John Deere planter with a zero interest loan coming from the state, which would be quite expensive.
I wonder if they would also consider cover crop terminating rollers.
Yeah, that's good. Yep. Crimpers, you mean?
Yeah, a roller crimper. Some of them are just rollers. For terminating cover crop without spraying, I would assume that you could consider that, because it's part of your cover crop regimen, right?
Yeah. Or air seaters maybe too. Maybe.
Nicolas Lirio (20:23.502)
So what, what are, what's equipment loans on for right now? Seven percent, maybe 9 % if you're, if you're paying quite a bit for it. Um, and let's say a million bucks goes out in loans. What the U S or what the Iowa government is giving up is 7 % per year on that, but it's amortized. So it's more like 4%. So 4 % on a million bucks. Well, it be a million bucks cause you can't buy anything for a million bucks. It'd be like 10 million bucks. So whatever 4 % of
10 million bucks is, which is $400,000 a year. So it's not, it doesn't seem crazy to the Iowa taxpayer, but it, mean, a zero interest loan, that's how, that's how there was so much wealth accrual from 2020 to 2023, just so quickly was there was like basically 2 % loans. and yeah, that is, that is fascinating.
Yeah. And, and the other thing that I wanted to talk about within that too is, um, how will field tiling be viewed in all of this? Um, will it be viewed as something that is, no, this is helping with erosion. This is, you know, this is, this is a good thing. And what we know is that what I didn't know and I was wrong and I lost a nestled bet to Nicholas. Um,
I wanted to talk about that.
Kent Boucher (21:49.462)
is that the in fields that are heavily tiled, the vast majority of nitrate. Look at you just glowing in that you just, it's the first time he's ever one of that.
Because he's gonna turn it into a real
But the vast majority of nitrate is is Coming through tile lines. Yeah, and and so if if if we are gonna end up providing state money to Put more field tiling in because of its other because it does technically help with with surface erosion, right? You have less water running off the surface of your field. You're not losing as much soil
but it causes the primary problem, it exacerbates. So it'll be interesting how they draw that delineation there.
Here's a...
Nicolas Lirio (22:46.52)
Here's an, I've been trying to workshop this analogy because I see this coming problem coming up and it's basically what you're talking about. Imagine Iowa where a group of mice in a maze and we're all kind of running together. Maybe there's different groups running around, but we're all grouped up and maybe that represents different parties, different interests, but, and we're all sick and the only way to get better is to get out of the maze. And so right now with this water quality thing,
our leaders are starting to sniff out, even though there's been some mice who have said, this is where the exit is. Our leaders are starting to sniff out where the exit is. Here's the problem. At the exit, there is a giant, very hungry cat. And we are yelling, we need to be ready to deal with the cat. What is the cat? The cat is farming practices, culture, economy, that goes with the rural practices that we have put into place.
We have to deal with that cat. That cat will be very painful to deal with. And so the leaders, the little mice leaders might get to the end, see the cat and go, you know what, I actually don't think we need to get out of here in order to be healthy. Let's turn around. Let's go this way instead. And they might divert us. And that's what I'm worried about because we literally will have to come against what we have adopted as today's current farming culture, not what farming culture has been for decades, but today's current farming culture, which is,
an economic worshipping culture. We're not the first culture ever do it. I'm not, but that's kind of where we're at. And if we're not willing to confront that, and there's a bunch of mindsets that go, there's very large ad companies who have an interest. And I think everybody in Iowa is ready to step up against those interests that are, are, you know, taking money from us. And, but then there's also how
Profiting off the problems. Yes
Nicolas Lirio (24:41.802)
And, and, then there's also people who are more reluctant to change their mind and, or if they change farming practices, their lives will get a little harder either because it's harder work. They can do less acres. They can make less money. There's some pain they have to go through. Maybe they just put up a big corn bin and now that thing's going to sit empty and they got to figure out how to pay it off. There's, there's pain. This cat is coming. Are we going to be willing to face the cat when we get to, we going to be willing to face the farming practices?
Because by golly, it's coming and we're gonna come face to face with it and are we gonna deny it? Are we gonna tackle it? Are we gonna be willing to change? I don't know.
Yeah, the two parts, just in what I read, and I haven't read the actual, you can usually go and read both at a federal level and a state level, the actual bill that's being proposed, you know, and the language there, and you get a better idea. So I have not done that, but this seemed to be a pretty good coverage of it. And I've looked at the Iowa Capital Dispatch many times in the past, and I like it as a resource. the things that gave me pause,
that made me say, we're not dealing with the cat, to go with your metaphor there, was the part where it said these are not going to be mandated practices. There are no mandated practices in here. And I know nobody wants to be mandated to do anything, right? But that's where I really am appreciative of what Minnesota did with their buffer program. Now,
I plan to, maybe I'll even send out that email today if I get a chance, reach out to the agency that's overseeing that program in Minnesota. And I want to know if there's any data that they have to show how it's improved things since making that law up there. But it's been in place for eight years.
Nicolas Lirio (26:42.221)
Great, yeah.
Should be measurable.
Kent Boucher (26:51.886)
I heard from a- That is a situation, and again, the data will prove if it's worked or not, but it's at least an attempt to deal with the cat, right? It's saying, no, thou shalt not plant right next to the creek. You know what I mean? And that's a cat-dealing- Yeah. know, type of move. And so the fact that that, like, while I was reading this, like, oh, there's the crack in the door. There's where you can-
There's where you can kind of skirt around this.
To their credit proposing the bill, bet they know.
They're trying to make it palatable. the thing of it is, and compromise is very important, I understand that. But some things, there's no room for compromise. you gotta be willing to tackle that. And there are rare occasions. You guys have both heard me say many times, not on the podcast, but just in our conversations, I'm big on not having sacred cows. Have as few of sacred cows as you can.
There's very few things that people should say, this is non-negotiable to me. And so I'm big on not all the time swinging the ax and saying, nope, there's no room for compromise here, but there are a few times where it's non-negotiable. This is right, the other way is wrong.
Nicolas Lirio (28:13.954)
Did you watch Dark Waters either of you guys? Yeah, I did. Yeah. So we're we're in a longer, more drawn out, larger scale, more of a trickle than a dumping of like the PFA's and stuff that they were dealing with. I mean, they had immediate like teeth falling out, that kind of stuff. We just have like this long form sickness that we just don't really understand, not willing to get to. And yeah, I think we're in the middle of that movie right now.
Yeah, so I do share your fear on that. And I think that that's where you can see it in the bill. And I understand why they put it that way. They don't want to tell anybody what to do because when people get told what to do, they don't want to do it. But we got to get over that because that's childish. You know what I mean? That's a childish sentiment. So I am hoping for the best. I'm very thankful that this has been proposed. hope it goes through.
Even if it goes through and it's not mandated, I would still consider it a big win in the right direction.
Yeah, the conversation has expanded to a point where we're attempting at.
Yeah, and where the Iowa legislators believe that it is a votable issue. They're putting enough effort behind it that they're like, okay, either they really want what's best for the people in their district, which I hope and believe that that's the case, and or they believe that's what their district would vote on. But either way, it's a very powerful situation. Riley, what do you think?
Riley Rozendaal (29:40.81)
At a bare minimum, I think it's a good starting point. Obviously, like you said, there's a lot of resistance when the word mandate or new program mandatory, when those words come across. I think it's a fantastic first step. And if the monitoring is done worth its salt, it will highlight an on-ramp for better legislation going forward too.
Yeah, this doesn't have to be the end all be all code of Hammurabi or whatever the means in the person What's the one where you can't once you make it a law you can't unmake it a law You just have to make a law that like says Thou shalt not do
Bureaucracy? That sounds like bureaucracy.
Yeah
Did you guys learn about this? The Kota Hammer? It's like the eye for an eye. Anyways, it's a whole other rabbit trail.
Riley Rozendaal (30:34.702)
But yeah, I think if the monitoring is done correctly and we get some interest in some conservation enhanced conservation practices like oxbow lakes, saturated buffers, stuff like that.
So basically you're saying like if they they monitor it right they say wow these voluntary programs have proven that there's been this this big of an impact now it's time to make it law.
Well, then you can highlight with the data on both the reduction in nitrates and our high risk areas, we can highlight, well, we can't mandate that the entire state does this, but this one waterway has something going.
So kind of baby step into the
Yeah. Yeah. Or even offer a beefed up version of CSP or equip for those areas, you know, based on, based on the data, they go, okay, well we know these, these are the issues and we found great reduction in those issues when these programs go in. Now that we have the data, let's put a hundred million bucks behind it.
Kent Boucher (31:37.698)
And I think if it does become mandate, which again, I think it should, and I'm not even saying which specific strategy, I'm not saying it should all be buffer strips. I think the bioreactors are probably one of the best things that could be done. And you could, even if it becomes mandate, maybe it doesn't have to be, it's gotta be by this date next year. It's a process of like, next time the land goes up for sale, it has to be done before it can close. where it can be,
Yeah. Or reappraise or something.
this stepped into not some huge expense slapped on landowners right away.
Yeah, that's a great point. think before I go on to the ethanol topic today, I want to make just a quick call. I'm going to for everyone listening, I'm going to make this a real send it to your friends who live in Iowa because I think this is important that the Iowa legislators and the Democratic Party proposed this Republican Party members do not let this become a partisan issue.
We are talking about the health of you and your children and your grandchildren. Please, even if this...
Kent Boucher (32:46.088)
great great great great great grandchildren. Yeah, for some of them.
If we're ever.
man
Even if this bill doesn't pass. Figure out something, press somewhere, and you're going to have lobbyists lobby the heck out of you. For our sake and the people who voted you in, please resist those. We are talking about the health of our state and the Midwest. I believe in you. I know that you will do the right thing, but please don't let this become a partisan issue. All right, moving on. We had to make it real because
This is very important. We're talking about the health.
Riley Rozendaal (33:26.86)
Alright, I'm on board.
Okay, E15, let's talk about it. So for anyone who doesn't know, at the federal level, E15 is banned during the summer. And there was, I believe it was a proposal to, Congress was presented with the opportunity to make it legal through the summer, which
to be available for sale year round.
Yes, which would solidify it as in the marketplace and solidify some of the corn and the market share that needs to go out for corn and stuff like that. Here is what it breaks down to is that states are actually looking at having different laws for it. So it would be very helpful to have a federal law for it. But there has been a long, this is where it gets spicy. There's been a long standing battle between big oil and
ethanol or corn growers, Iowa corn growers association. And, and, and so.
Kent Boucher (34:27.608)
Like you're guzzling from somewhere.
Yep. Well, guess what? Big Oil was trying to push it through. They were lobbying to have this E-15 legalized through the summer mandated because only because they saw it as a lesser of two evils than individual states having different laws and them having to manage that. They said, look, just make it legal all the time. We'll figure out the market share. Maybe we'll pull back production, whatever they need to do. so, but it did not pass. And here's what Congress did. They said they would build a
committee. They would build a committee and the CEO of growth energy, Emily score said that it was a disgrace that they were just punting it and said, when you don't solve a problem, you create a committee to study it. Right. And so nobody wants to do this. Well, if big oil is pushing for it, which we know a lot of lobbying happens behind big oil, the Midwestern farmers are pushing for it. The senators in the Midwest are pushing for who's pushing against it.
Any guesses?
Who stands to win by them not? I'm gonna guess like maybe Would it be some alternative fuel source for vehicles like EVs or something like that the EV industry
Nicolas Lirio (35:45.55)
That's not a bad guess. It's you gotta guess.
I have no earthly clue.
It is smaller oil refineries. Basically they're, they're getting pushed out by big oil. Big oil can handle their, their margin kind of shrinking and stuff like that. If this E 15 passes, but smaller oil refineries can't that's both foreign and domestic, banded together to, and they got the year of, some Texas representatives and, were able to put a block on it now. So there's this task force going through.
What do we do? What are they going to do? They have to have something by, I believe it's February 15th that they have to have something. Why is this such a big deal right now? Because this has happened over and over again, right? Why is it such a big deal right now? We currently, the United States has 2 billion bushels of corn in surplus. So.
And this, think I read that it would increase 2.3 billion.
Nicolas Lirio (36:46.894)
It would increase the demand by right around 2 billion bushel, which while farmers are currently losing money on every acre that they're farming, which isn't technically true, but basically.
Well, there's been two direct payment subsidies in the last, let's see, there was one that went out when, like July, and then there's another one scheduled for the end of next month.
Now, this is I can't say their name. You know who you are. We were having a conversation earlier today about this exact topic and he had a very interesting thing to say about it. He said, if farmers want the legislation to bail them out on whether it's through subsidies or through creating markets, if that's how they want, he said, that's fine. They need to be willing to do what the government says, which means they have less autonomy on their land. We're not cool with that.
Like farmers aren't cool with that. You know, we like our sovereignty. We hate eminent domain. Exactly, exactly. But and so this person said, like, if you don't have the legislation creating the markets, here's the bad side of that is you lose your markets. We have too much corn. Our capitalistic society doesn't want that much corn. We're only using that much because of how much it's in our legislation.
Yeah, that would tie back into what we just talked about.
Kent Boucher (38:05.486)
And there's been a lot of work done to put corn into nearly everything.
Yes. And we've talked about this. Corn is like a one to 1.3 energy input to output, whereas oil is three to 12 and nuclear is like 40. I don't know what solar is, but the point is it is not like an efficient, you know what I mean? It's not an efficient way to gain energy. We just put it there. Now I do think, I know we've talked against feed lots of stuff. I do think
some corn has its place for feeding beef and pork and stuff. I don't think that should be all that it eats, but I think there is a place for it. I think there is a place for growing corn, a place for growing beans. But we have a surplus and we don't want to admit it.
And also things of high fructose corn syrup, just like the water quality issue in Iowa is now on everybody's radar. They know, I probably shouldn't drink this, or probably shouldn't eat this. So we're already to that point there. 20 years from now, are people gonna still be eating the amounts of high fructose corn syrup as they are today?
I that depends on whether we get wealthier or poor if we continue to get poorer the level of decision-making as poverty rises the level of decision-making goes down. That's just a correlation with how how things happen is not to blame.
Kent Boucher (39:28.494)
But if you know some legislation gets put out there at some point Like so what my point is there could be another there's a there could be another looming How would you say it change that could drastically affect Corn demand yeah, not too far in the future
yeah
Nicolas Lirio (39:51.406)
I, you're right. You're right. I, and I think it will be painful, but we are either headed into a fully legislated marketplace for corn, which is not good. If an entity, whether it's the government or anything controls the marketplace, they control the price. They control who makes it. Look at Amazon. We talked about this with Amazon last week. Amazon said, what are the 200 or a thousand things that get sold the most on Amazon?
We'll just start making those ourselves. They controlled the marketplace. Then they were able to go to the factories. Maybe they were their own factories, but they also could say, this is what we'll pay you for. You know, Walmart has done that and has monopolized in a lot of ways food and that is not a good thing. We, I promise you, we don't want the government deciding where all of our corn goes, creating all these markets. So I don't, what I don't want is people yelling about free marketplace, not having the government say, if farmers all band together and we say,
Look, the government can tell us where we want to sell it and we'll grow whatever they tell us to do. I hate that, but it's their choice. get it. But you can't have your cake and eat it too. You don't get to have full autonomy on your land, do what you want because what you want and then beg the government to make it their burden to sell it for you. You don't get both. And so and I'm not trying to poop on farmers. There's a lot of fun going through financial.
Well there's a lot of farmers who are asking for what you just described. They are asking to have their own markets and to not be so tied to the government.
And so I, I think the way out is tied to Zach Lane's conversation and it is growing food, growing produce, um, more pasture on the landscape for cattle and for beef and pork, more produce. can grow produce. We can grow great produce in Iowa and it would, it would, we would have to totally change the culture, you know, and that is painful. That is the cat at the end of the, uh, the maze.
Nicolas Lirio (41:45.576)
And we got to look that cat in the eyes and deal with it. so I don't know, Riley, I'm really curious, you know, what you've got, what your take is on the whole porn and E15 thing.
I think that corn is, it's just, we have this problem. We're too good at producing corn. The market has been built as such that every year everybody increases their bushels. We find a new chemical, we create a new machine, we find a new hybrid, and the bushels goes up and up and up. The problem is you've got to sell that product, you know?
whether it be markets abroad, whether it be markets at home we create. Putting all of these bushels under the government is in the end a liability. Because if it's not a liability now, it'll be a liability in 20 years when everything's EVs. I mean, think, what are we gonna do with 2.5 billion bushels of surplus corn that we have in 25 years when everybody's doing 350 bushel an acre corn or whatever?
I, you know, whatever science can brew up.
Yeah, that's true. don't we don't anticipate yields going down. Yeah.
Riley Rozendaal (42:59.006)
You can't work your way out of this problem by papering it over.
you know what I bet would be painful for the farmers. And so I know I'm just like, you know how you guys talk about all this work that Nicholas is not going to do. If we went to like fully organic, like let's say we back band roundup and some pre-emergence and stuff like that. We had to deal with corn with the, the supply would go down drastically. And it would be a lot healthier for us. But I think
It would get the supply would go down so much the price would have to be higher that it wouldn't be cost effective to use it and ethanol anymore. That's my guess. But.
Well, the other I think the the looming monster on all of this is people that are buying land now for row crop production are it's the the bank note is mathed out to to factor in what corn is going for in this current model. And if the model changes, there's going to be a lot of people that are going to be upside down on their on their corn ground. And and
That's the thing that's going to be interesting but also scary. I think a lot of people look at that and go and then rub their hands, yeah, all this land's gonna be for sale for cheap. It's like, yeah, but your neighbor's also gonna be hurting as a result. that's something that bothers me. But I think the thing that gets lost in all of this discussion is why is that ethanol not allowed to be sold during those months?
Kent Boucher (44:38.83)
of it's, we view it just as a, you know, a market jousting thing between different fuel industries. But the EPA set that standard because alcohol has a very low boiling point, right? It becomes, it evaporates into the air. And I think the term is FVP standard or RVP, RVP standard.
yeah, I forgot to that up.
Kent Boucher (45:07.97)
for the E-15 is that during those hottest months of the year, there's so much of that ethanol from wherever it's stored or sitting, is the way I understand it, is evaporating to a basically a smog level, right? To where humans are doing human things. It's like at that level of the atmosphere and people are breathing in more of those organic
molecules coming from the the corn ethanol in the fuel and The EPA said yeah at this at this time of year those levels of the these and I don't know if carcinogenic is the right term here for for these molecules But definitely they've been determined to be harmful to human health They are at a level that we are not comfortable with being exposing
humans to right? And we've seen this in other things in past leaded fuel back in the day, right? an environmental hazard to people. And so the standard exists, not just, you know, to keep the oil industry, you know, in business, it exists, it exists for human health. And so I think that gets lost in all.
want to, to. And this is super important. I need to put an asterisk on your thing because there is evidence. This came up a couple of times. I don't know the science behind this at all. I cannot vouch for this, but it came up more than once that there is evidence that E 15 is less volatile than E 10. So not that it's not volatile, but they're like, look, if you're going to let E 10.
I would love to see that sign. That seems counterintuitive because your E15 is a higher concentration of alcohol.
Nicolas Lirio (46:54.651)
Well, I mean, there's a lot of things in, you know, in scientific measuring that does that.
I'm not saying it's impossible that it happens, but logically that doesn't mean.
Think about water. When it cools down, its volume goes down. But when it hits about six degrees and it's ice, so ice actually, not, when it cools down, it shrinks in size just because the molecules move less.
Right? OK, yeah.
But when it hits six degrees, starts to expand. Ice starts to expand.
Kent Boucher (47:25.25)
But you're also dealing with a polar molecule.
But my, the point being is that things can seem like they're just going straight down on a graph, you know, when you measure it, but then something else comes into play.
Yeah, and I'm allowing room for that. I would say, logically, it does not make sense to me how if you increased the amount of alcohol in the solution, you would have less evaporation. Yes.
And to be fair, the two times that it came up, was people lobbying to sell more corn.
I'm not saying it's impossible for that to happen. just don't... I would need to be presented with the science to demonstrate that.
Nicolas Lirio (47:59.714)
Just saying there's an asterisk.
And my original point still stands, which is it's lost in this debate. aren't saying is this best for humans. Is it best for energy companies?
Yeah. Yeah. Uh, monitor. Yeah. I think, uh, I, I'm curious to see where we end up with this. mean, I know that this sounds really doom and gloom. We seem to be kind of on the front end of a farm crisis. Unless if next year, I call it, I'll just go unless next year the price is bumped back to six 50, you know, like they really have to jump from where they're at now. Six 57 bucks.
It's calling it now.
Nicolas Lirio (48:40.514)
That would kind of, and it can't just be an average year next year. It'd have to be a very good year to cover up the sins of this year and last year in terms of economically.
Everybody document your prices of inputs now just to see if they go up. To match the increase.
That's the other side of it
Yeah, but input companies, they don't want farmers to go out of. Bankrupt. Yeah.
i know i was just
Kent Boucher (49:04.38)
It's mentioned every other podcast
The data well and so if we're on the edge of this farming crisis what can happen is a bubble can pop here There are really two options when a bubble pops to deal with it The one is the government bails it out if it's a small enough economy like when the whole housing economy the government couldn't it did cover up a bunch of it and we've had side effects of never having paid the piper for 2008 but so the government with something small enough like ag the country
could probably cover it up. Basically the other taxpayers could come and bail the farming economy out. But the other option is we deal with the pain and that looks terrible. Like I don't think people understand how terrible that would look. And then you can have a combination of both. But as we keep spiraling, just putting all our chips in corn and beans, all our chips and corn and beans, that
pile that the piper is getting bigger and bigger and bigger. We to pay that one day. Either the government needs to come bail us out or we have to pay that. And so we're looking at an agricultural bubble, heavily caused by outside forces that are not involved in the Midwest and heavily caused by our own decision-making here in the Midwest. What we pay for, what we don't want to pay for, what we're willing to do on our own land, what we're willing to pay for land, you know, and, and
You hear the conversations and farming. mean, here on farming podcast, well, you got to get it to pencil out. You got to get it to pencil out. Is that our whole is that our first goal in life is to pencil things out? You know, and so if it is, then we're going to keep we're going to keep feeding the piper and one day we'll have to pay it and it'll be one of the most painful things the Midwest ever experiences.
Kent Boucher (50:49.003)
At some point you got to do the right thing because it's the right thing to do. it's not just how does it help your finances.
I want to be clear. Many ways in my life have I fed the piper for a long time and then had to deal with it. Yeah, I'm not free from that from that.
is free from blame.
Yeah, yeah, I'm definitely a part of it. So just hoping to do better. Hoping all of you are wanting to do better as well. Really, really appreciate you all listening and we will let you go because it's been almost an hour, but we'll talk to you again next time.
