Posted By Cindy March 13, 2008
Americans are feeling the pinch of high gasoline prices, but the fuel could cost as much as 5 cents to 10 cents more a gallon if it was not routinely blended with ethanol. Overall, U.S. consumers and taxpayers benefit from saving $7 billion to $14 billion in lower gasoline costs as a result of increased ethanol use, according to Terry Francl, senior economist at the American Farm Bureau Federation.
Francl said Americans will benefit in other ways, too. After farmers endured years of barely breaking even with corn priced around $2 a bushel, today’s relatively high market prices for corn, soybeans and other crops mean federal farm program payments will be reduced by at least $8 billion and possibly as much as $12 billion annually, he said. The overall gains to the economy from ethanol will more than offset any incremental food price increases associated with the production of biofuels.
These and other points about the emerging ethanol industry were shared by Francl during his presentation at a renewable fuels conference in Omaha this week. The aim of the 25 x ’25 Alliance, the sponsor of this week’s National 25x’25 Renewable Energy Summit. , is to advance the concept that by 2025, 25 percent of U.S. energy needs will be met by resources produced by this country’s farms, forests and ranches.
High crude oil prices are another contributor to today’s high crop and food prices, but Francl emphasized the extent to which increased use of ethanol and biodiesel may stem even higher gas prices.
“It’s easy to say the growth of the ethanol industry is leading to higher fuel and food prices, but that’s just not the case,” Francl said. “Complex and overlapping issues that developed over several years are at play, and the growing use of ethanol actually helps keep gas prices from going even higher.”
In addition, Francl said the U.S. benefits in other important ways from the burgeoning domestic ethanol industry. Besides a reduced reliance on foreign energy sources, the ethanol energy industry spurs new job growth and economic growth in rural areas. Ethanol also helps the environment because it is made from corn and other renewable resources.
Posted By Cindy March 10, 2008
It appears as though another extension of the 2002 Farm Bill is inevitable, since the current extension is set to expire in just a few short days and Congress is still stuck on working out funding for a new bill.
Even though key agriculture committee members from both houses and both parties expressed optimism last week that a compromise was in the works, virtually nothing was accomplished, and Congress is recessing this Friday for Easter, the day before the current extension expires. The latest word is that they are hoping for a compromise by mid-week so that staff can work over the recess on the details.
Meanwhile, the Washington Post editorialized on the farm bill Sunday, basically saying that because corn prices are high and net farm income is up, there is “no justification whatsoever for spending billions more on agriculture.” Here’s an excerpt:
“…in this flush time for farmers, House and Senate conferees are contemplating a farm bill that might cost $10 billion more over the next decade than the current law would have. The tentative $280 billion-plus price tag includes needed spending on nutrition and soil conservation programs — but also about $5 billion a year in cash transfers to corn, soybean, wheat, cotton and rice farmers over the next five years. So far, there are no meaningful limits on the amount each farm enterprise can receive. Thus, plenty of this federal largess will be showered on people much richer than the average American, who is struggling with higher food costs.”
There are about 20 comments so far on the editorial, many of which point out the importance of farm programs. This is another great opportunity to at least try to educate the general public.
Posted By Cindy March 6, 2008
Comments by President Bush this week that corn prices are affecting food prices required some explanation after the fact by Secretary of Agriculture Ed Schafer.
During a speech this week at the Washington International Renewable Energy Conference 2008, Bush said, “Corn ethanol holds a lot of promise, but there’s a lot of challenges. If you’re a hog-raiser in the United States, you’re beginning to worry about the cost of corn to feed your animals. I’m beginning to hear complaints from our cattlemen about the high price of corn. The high price of corn is beginning to affect the price of food.”
Talking to Brownfield Network reporter Peter Shinn afterward, Schafer said there is no inconsistency between the President’s remarks about the impact of corn demand from the ethanol industry on food prices and the long-held USDA position that higher energy prices play a greater role in food price inflation.
“Well, I think the President stated an obvious fact that everybody knows today that food prices are being challenged by fuel prices,” Schafer said. “But really, this is a consistent administrative policy and direction, and I was pleased the President pointed out the fact that, though corn prices are under pressure right now, the pathway is to cellulosic ethanol.”
Schafer addressed WIREC on Tuesday and hosted a ministerial luncheon at the event Wednesday. WIREC 2008 featured representatives from over 100 countries with attendance estimated at seven to eight thousand. The event wrapped up Thursday.
Read the Brownfield story here.
Posted By Cindy March 5, 2008
President Bush had a pretty simple message Wednesday at the Washington International Renewable Energy Conference 2008 (WIREC).
“America has got to change its habits. We’ve got to get off oil.”
No kidding. About the time he was making that statement, crude oil on the New York mercantile exchange jumped nearly $4 on falling oil inventories, trading over $104 a barrel and setting a new all-time record. The expectation is that gas prices will reach $4 a gallon by Memorial Day now.
Bush renewed his support for ethanol produced by the nation’s farmers to help us change our habits and get off that high-priced oil.
“The vast majority of that ethanol is coming from corn, and that’s good,” he said. “That’s good if you’re a corn-grower. And it’s good if you’re worried about national security. I’d rather have our corn farmers growing energy than relying upon some nation overseas that may not like us. That’s how I view it.”
He did express concerns about corn ethanol, however, and stressed the need for cellulosic technology.
“The best thing to do is not to retreat from our commitment to alternative fuels, but to spend research and development money on alternatives to ethanol made from other materials — for example, cellulosic ethanol holds a lot of promise. I’m sure there are people in the industry here that will tell you how far the industry has come in a very quick period of time.”
As to changing habits, Bush noted, “I probably didn’t help today when I rode over in a 20-car motorcade.” Some things may never change!
Read the president’s remarks here.
Posted By Cindy March 3, 2008
The announcement last week that scientists at Washington University in St. Louis have completed a working draft of the corn genome holds tremendous potential to meet society’s growing demands for food, livestock feed and fuel.
The accomplishment, which was announced at the 50th Annual Maize Genetics Conference, is the result of a $30 million project initiated in 2005 and funded by the National Science Foundation, the U.S. Department of Agriculture and the U.S. Department of Energy.
Richard K. Wilson, Ph.D., director of Washington University’s Genome Sequencing Center, says this is the first comprehensive glimpse at the blueprint for the corn plant. “Scientists now will be able to accurately and efficiently probe the corn genome to find ways to improve breeding and subsequently increase crop yields and resistance to drought and disease,” he said.
The draft covers about 95 percent of the corn genome, and scientists will spend the remaining year of the grant refining and finalizing the sequence. “Although it’s still missing a few bits, the draft genome sequence is empowering,” Wilson explains. “Virtually all the information is there, and while we may make some small modifications to the genetic sequence, we don’t expect major changes.”
According to plant biologist Ralph S. Quatrano, Ph.D., chair of Washington University’s Department of Biology, “The genome will help unravel the basic biology of corn. That information can be used to look for genes that make corn more nutritious or more efficient for ethanol production, for example.”
The team working on the endeavor included scientists from Iowa State University, among them corn geneticist Dr. Patrick Schnable who has been working on corn genetics exclusively for well over 20 years. Brownfield Network’s Peter Shinn did an interview with Dr. Schnable you can read and listen to here.
This is an exciting development that opens up a whole new world of possibilities for feeding and fueling the world.
Posted By Chuck March 1, 2008
Leaders of the National Corn Growers Association (NCGA) said they are delighted and proud at the National Agri-Marketing Association announcement that NCGA CEO Rick Tolman has been named Agribusiness Leader of the Year. Here’s Rick at the NCGA booth at Commodity Classic.
The award honors outstanding leaders in agribusiness, education, government service or other agribusiness related areas who exemplify excellence in agribusiness by their significant contributions to the industry.
“We congratulate Rick on this prestigious award,” said NCGA President Ron Litterer. “His commitment and dedication is apparent in the many accomplishments that benefit agriculture, especially in the areas of ethanol, trade, transportation, biotechnology, and farm policy.”
Noting Tolman’s efforts to dispel prevalent myths about corn ethanol, NCGA Chairman Ken McCauley said, “We couldn’t be more pleased. Rick is an outspoken champion for agriculture and this honor is well deserved.”
NCGA leaders and producers are at Commodity Classic, the combined tradeshow and convention of corn, soybean and wheat producers. “We are celebrating one or most successful Commodity Classic events yet,” said Bob Dickey, NCGA first vice president. “This is one more reason to celebrate.”
Tolman will receive the award April 17 at the 2008 Agri-Marketing Conference in Kansas City, Mo.
Posted By Cindy February 25, 2008
Biofuels were in the spotlight last week at USDA’s 2008 Outlook Forum with the theme “Energizing Rural America in the Global Marketplace.”
The opening plenary session included Paul Schickler of DuPont/Pioneer Hi-Bred and Bob Dinneen with the Renewable Fuels Association, who made up half the panel talking about biofuels and new technology increasing yields to meet the demand for both food and fuel.
“The rapid advances in productivity, technology and innovation are contributing to remarkable productivity increases,” said Schickler. “World production of corn (since 1991) has progressed right along with the rapid increase in consumption and the reason is that corn yields have increased over that same period by 30 percent.”
Schickler noted that in the last decade the world population has increased 13 percent, income has increased 35 percent, meat consumption has increased 25 percent, corn consumption is up 32 percent and soybean consumption is up 52 percent … but total global crop area harvested has only increased by four percent.
He called it “remarkable” and it truly is. Here is a link to Schickler’s presentation in pdf form.
Dinneen said we need to make sure we are doing everything possible with biotechnology to develop new varieties to increase crop production. “We are going to get to 200 bushels per acre far sooner than anyone believes that we will,” he said.
“We will not have food security in this country unless and until we have energy security,” said Dinneen.
Watch the entire plenary panel session on USDA’s website.
There was also a panel focusing specifically on sustainability of ethanol with presenters including Dr. Mark Stowers of POET and Rick Tolman of National Corn Growers Association. (The links will take you to their presentations.)
Posted By Ken February 15, 2008
From our friends in Illinois:
Just as it begins to appear everyone is piling on and taking a cheap shot at the benefits of ethanol, a media heavy hitter unleashed this earth shaking bit of news…increased ethanol use cuts our dependence on foreign oil.
“While debates heat up on whether ethanol will ever be “green,” one aspect of the alternative fuel is becoming clearer: explosive production is stifling an established driver of oil markets — U.S. gasoline demand — and could lead to lower prices at the pump,” according to a Reuters story out today.
Monthly U.S. ethanol output through November 2007, the last data available, averaged nearly 12.7 million barrels, or 64 percent higher than average monthly production in 2005, according to the Energy Information Administration, the statistics arm of the Department of Energy.
Ethanol production this year is expected to rise 130,000 barrels per day — or the amount of gasoline a medium-sized oil refinery puts out — to 550,000 bpd, according to the EIA. However, production is anticipated to reach 9 billion gallons in 2008 with plenty of growth potential waiting in the wings for the right market signals.
Posted By Cindy February 12, 2008
Media coverage of a recent article in the journal “Science” on studies that address the possible consequences of a faulty approach to utilizing lands to produce biofuel feedstocks only reported part of the story, according to the 25x’25 Alliance.
“Unfortunately, mainstream media coverage of the studies failed to report that they also identified ways to avoid these problems and insure that future biofuels give us both a new renewable energy source and greatly reduced greenhouse gas emissions,” said a statement from the Alliance. Officials say the boost in production can be met by new and better technology without bringing environmentally sensitive land into production.
Increased demand for cellulosic ethanol and the next generation of biofuels has led to research into enhancing existing crops, such as corn and soybeans, with enzymes specifically geared towards ethanol production. While biofuels will lower the cost of farming inputs, higher yielding, technology-enhanced crops can make existing acreage more productive, helping prevent encroachment of biofuel feedstock production onto sensitive lands.
The Science article reported on studies that indicate clearing land for the production of biofuels would produce twice as much greenhouse gas as the use of biofuels would reduce.
Posted By Cindy February 8, 2008
It has been way too quiet lately when it comes to negative news about biofuels, but that changed today with the release of studies that say clearing land for biofuels will increase global warming. And the studies include alternative feedstocks here, not just corn and soybeans. Because we are going to be growing more crops of any type, the studies claim it will be worse for global warming than than using gasoline or other fossil fuel.
The media has jumped on this story like ticks on a hound dog. Virtually every major news outlet from the Washington Post to the LA Times is running the story, so expect this to be the next big issue for biofuels to address.
It is important to point out that these studies are based on models, predictions and assumptions that may not turn out to be true. A short counterpoint in the Washington Post article quotes Brent Erickson, executive vice president of the Biotechnology Industry Organization’s industrial and environmental section, who said using renewable resources always made sense in the long run, compared with gasoline and diesel fuel.
“It makes no sense to continue burning fossil carbon, which is essentially carbon that has already been sequestered for millions of years in the Earth’s crust, and which when burned releases carbon dioxide and also creates a carbon debt that can never be paid back,” he said. “It is much more logical to produce biofuels that recycle carbon, even if a short-term carbon debt is created. Even if it’s 167 years, you’re still better off than burning oil that can never be paid off.”