(Bloomberg) -- President Donald Trump is considering visiting an ethanol refinery in Iowa in the coming weeks, according to people familiar with the matter, a signal that the administration will fulfill a pledge to permit the year-round sale of high-ethanol gasoline sought by corn farmers in the state.
Iowa Republican Senators Chuck Grassley and Joni Ernst, as well as Governor Kim Reynolds, will be invited, according to four people familiar with the matter who asked not to be named discussing the private deliberations.
Last fall, Trump visited Iowa and delivered a victory to corn farmers and biofuel producers when he said he signed a memo telling the U.S. Environmental Protection Agency to lift summertime fueling restrictions on E15 gasoline, which contains 15% ethanol. The corn-based fuel currently accounts for 10% of U.S. gasoline consumption and higher blends are restricted during the summer months in some areas.
Since then, agricultural groups have been pressing EPA to meet the June 1 deadline when the higher blends are restricted. Midwestern farmers, who helped propel Trump to the White House, have suffered a loss of sales due to Trump’s trade war with China that has resulted in tariffs on American agricultural products.
The move to allow year-round E15 is opposed by oil refineries. The two sides have long been locked in battle over the Renewable Fuel Standard, the law that compels oil refiners to mix ethanol and biodiesel into petroleum.
Some 37% of U.S. corn production is consumed by ethanol plants. Iowa is the largest manufacturer of both commodities. The deliberations over the ethanol mill visit come as the administration is said to be preparing to announce another round of aid to farmers hurt by the trade war with China as soon as Thursday, according to people familiar with the plan, a package of assistance that could exceed $15 billion.
The administration is considering payments of about $2 per bushel to soybean growers, 63 cents per bushel to wheat growers and 4 cents per bushel to corn growers to compensate for losses from the trade war, according to two people familiar with the payment levels, who asked not to be identified because the aid plan hasn’t been made public.
The administration last year paid $1.65 per bushel for soybeans, 14 cents per bushel for wheat and 1 cent per bushel for corn.
Shares of ethanol producers gained on the news. Pacific Ethanol Inc., a West Coast producer of the fuel, climbed as much as 10% to $1.19. Green Plains Inc. recovered losses, jumping as much as 2.1% to $15.79.
(Updates with adminstration aid to farmers starting in sixth paragraph.)
