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DAVID KRUSE

By Staff | Jan 22, 2016

I recently attended an informational meeting hosted by America’s Renewable Future, the pro-Renewable Fuels Standard interest group.

RFA was helpful in informing RFS supporters of the mechanics of the Iowa caucuses. I haven’t been to a caucus literally for decades so this will be a new experience.

RFA conducted a straw poll of presidential candidates among those attending. Four GOP candidates got about an equal number of votes – Kasich, Christie, Rubio and Trump.

On the Democratic side, Clinton polled two to one over Sanders.

The ARF has done a good job of working with the candidates to help them understand the RFS.

Frankly, the candidates, fresh to Iowa, are poorly informed on what the RFS is calling a subsidy or mandate until the mechanics of it are properly explained.

When that happens, most of them get it. It took a while to bring the field of candidates up to snuff, but at the end of the attempt to educate them, only Ted Cruz and Rand Paul maintain their opposition to the RFS.

I actually respect Paul’s opposition to the RFS more than I do Cruz’s. Paul is not a hypocrite in that he has opposed oil subsidies and is just against all government involvement in business.

I don’t agree with the later, but I understand it. Paul is not getting campaign financing from Big Oil like Cruz is.

Cruz has voted against a lot of things in Washington, but, according to the ARF, not against oil tax breaks.

Campaign donations do influence votes in Washington and Cruz is no different than others.

He refused the ARF invitation to be educated and used the standard conservative response that ARF is liberals, is baloney.

Cruz has since distorted his ethanol position, according to ARF giving different answers to questions on the RFS at each different campaign stop, but sticking with the destructive path of phasing it out.

Don’t be fooled. Cruz is not pro-RFS nor does he give a twit about the ag sector in his other policy stances on trade and labor.

I was amused by a headline put out by his campaign that Cruz fights for farmers in Washington.

With friends like Cruz, the ag sector wouldn’t need any enemies. Rand Paul is not gonna do all that well in Iowa, but Cruz tops the polls.

The last thing that the ARF wants the day after the Iowa caucus is for Cruz to win so he can crow how he stood up to Iowa special interests.

There are national anti-RFS interests tracking the Iowa caucus race hoping and wishing for precisely that.

Unfortunately for our side, the mechanics stack up against the ARF in favor of Cruz winning because they are diluting their support amongst the nine other pro-RFS GOP candidates and it is hard to beat someone with everyone else splitting the vote.

Cruz could win the caucus with just 30 percent or less of the vote, while the rest of the vote is split among pro-ethanol candidates, and Cruz will get the headline as the winner.

In that instance, the ARF would actually have polled 60 to 70 percent support for ethanol when all the support for the other pro-RFS candidates is added together, but that won’t be the headline.

A Register/Bloomberg poll showed 61 percent of likely GOP caucus goers support the RFS while 77 percent of Democratic caucus goers do.

Of the GOP candidates, Donald Trump is likely best positioned to beat Cruz. Trump was scheduled to address the Renewable Fuels Summit in Altoona on Tuesday and was expected to tout his pro-RFS stance.

I plan to be there. The RFS is about U.S. energy independence and Trump is all for that while Cruz supports Big Oil.

Trump finances his own campaign so doesn’t have to suck up to oil industry donors as Cruz has done.

Therefore, by way of politics and the fact that it is a single issue interest group, the ARF could live with a headline the day after the caucus that “Trump Trumps Cruz in Iowa Due to RFS Support.”

What I see evolving is that Trump is using the ARF and support of the RFS for his needs to help him win and ARF is willing to use Trump to meet its needs to beat Cruz if it works out that way.

I am not comfortable with this at all because while Trump is pro-RFS he is not a pro-ag sector candidate because of his trade protectionism and anti-ag labor positions.

That adds up to him being as negative for the ag sector as is Cruz.

The optics are that if Cruz loses, the ARF and RFS wins – but if Trump wins, the RFS wins too, but the ag sector loses.

That is the odd combination of results when you have a single issue interest group.

When I add in trade and labor policy stances mixed with RFS support I get Bush, Fiorina, Kasich, Christie and Rubio as viable candidates for the ag sector.

The others lose it on trade and labor with Trump being most toxic in total.

The good thing is that there are still several GOP candidates to choose from. The bad thing is that by diluting ag interest support between so many candidates, it makes it much more difficult for a strong pro-ag sector candidate to win.

The irony is that the interests of ARF and the ag sector are not as totally aligned as one would have expected them to be.

Those representing ARF, including retired General Wesley Clark and yours truly, knows how to fix the flaws.

If Trump loses, Cruz wins. If Cruz wins, the ARF loses. If Trump wins, the ag sector loses.

Please, someone who is a pro-ag sector candidate needs to win.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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