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July 22, 2025 |  By: Mark Moran - Public News Service

One tax incentive will benefit Iowa corn farmers

Iowa farmers produced 2.63 billion bushels of corn in 2024, making the state the nation's number one corn producer, according to CropProphet. (AdobeStock)

Iowa farmers produced 2.63 billion bushels of corn in 2024, making the state the nation's number one corn producer, according to CropProphet. (AdobeStock)

Mark Moran - Public News Service

Despite the elimination of a handful of alternative energy tax incentives in the new federal budget, Iowa corn farmers will benefit from one that was extended.

Tax breaks and rebates encouraging investment in solar and wind power in Iowa were eliminated in the federal spending plan. However, the Trump administration extended an incentive enabling farmers in Iowa to produce more corn. The Hawkeye State is the nation's top corn producer, much of which is used to produce ethanol.

Chris Bliley, senior vice president of regulatory affairs for the biofuel trade organization Growth Energy, said grain-based fuels burn cleaner and are more environmentally friendly.

"The credit actually goes for production of lower carbon fuels that are used for transportation," Bliley explained. "It includes on-road fuels as well as sustainable aviation fuel. And so, the lower in carbon, the higher the credit."

The Trump administration has made efforts to extract more fossil fuels, which it said will move the U.S. toward energy independence.

Lawmakers in Iowa and neighboring Midwest states have introduced their own tax incentives for biodegradable jet fuel, which Bliley noted will create economic benefits for ag producers.

"To remain competitive, plants in Iowa and Nebraska and throughout the Midwest are investing in some of these key projects to lower their carbon intensity," Bliley observed.

The commercial airline industry is aiming for net-zero carbon emissions by 2050, according to the International Air Transport Association, which could continue to benefit Iowa farmers who provide corn for ethanol production.