The Trump administration is working on a deal with the People’s Republic of China to reduce the trade imbalance we have with them (whether the trade imbalance really is a bad thing and whether the PRC is working the deal as hard as the Trump administration are questions outside this post). American farmers would have trouble producing enough to meet their part of the goal, were the deal to go through.
US corn exports could jump from $150 million to about $10 billion annually within a few years if China vastly expanded its quotas and reduced its duties that are as high as 65%, according to one estimate.
The farmers—particularly corn farmers—would get a great deal of help in ramping up their exports if they weren’t…encouraged…to divert significant fractions of their crop to ethanol production. This is another consequence of ethanol mandates and another reason to get rid of them.
Update: In 2016, the US diverted 5.28 billion bushels of corn to ethanol production, or 36% of our total corn production that year. At roughly $3.45/bushel, that works out to $18.2 billion of corn production that was diverted. Simply eliminating this useless diversion would seem to cover that production jump cited in the quote above. It also would seem to leave $8 billion of production to mitigate food costs that are inflated by the diversion. This, in turn, would help our poor and mitigate the need for food stamps and therewith reduce the tap on taxpayer pocketbooks.