There’s nothing indirect about the land use changes reported in the most recent summary from USDA, which shows that the only land use in the United States that is declining is cropland.
According to the report, “Major Uses of Land in the United States 2007,” the amount of land in the United States devoted to growing crops declined by 34 million acres – or nearly 8 percent – between 2002 and 2007. At 408 million acres, total cropland was at its lowest level since records were started in 1945.
Cropland accounted for 18 percent of the total land area in the country – the third largest land use behind forest (30%) and grassland (27%) – both of which increased over the same five-year period while cropland declined.
The smallest total use of land in the U.S. is urban, at 61 million or 3 percent. However, while urban land use accounts for the smallest percentage, the USDA report shows that it accounts for the biggest increase in land use, quadrupling between 1945 and 2007, increasing at about twice the rate of population growth over the period. Urban land use increased almost 2 percent from 2002 to 2007.
The report is significant because it shows with actual data that cropland acres declined at the same time ethanol production was increasing – which means no direct or indirect land use change as a result of corn being used for ethanol. Instead, Renewable Fuels Association (RFA) president Bob Dinneen said what the report does show is how farmers are producing more on less land, while urban land uses increase.
“It is ironic that the land use debate has fixated on biofuels, when the actual culprit of land conversion has clearly been urban and suburban sprawl,” Dinneen said. “Subdivisions full of mini-mansions, big box stores, shopping malls, and parking lots are encroaching on productive farmland across the country.”
There’s a hot new craze called the “Ethanol Shuffle” sweeping seaports from Sao Paulo to Los Angeles as tankers carrying Brazilian sugarcane ethanol bound for California pass those carrying corn ethanol bound for Brazil.
Renewable Fuels Association (RFA) Vice President of Research and Analysis Geoff Cooper wrote about the “Ethanol Shuffle” last week on the RFA E-xchange Blog. Basically, we are shuffling sugarcane ethanol from Brazil to California to meet that state’s Low Carbon Fuels Standard (LCFS) – while at the same time, Brazil is importing lower priced corn ethanol from the United States to make up for not only the ethanol it is exporting to California, but the shortfall that country has experienced in ethanol production recently.
So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route.
This is more than ironic, it’s just plain ignorant. First of all, sugarcane ethanol costs more than corn ethanol. According to Cooper, the ethanol California has been importing from Brazil has been an average of $1.56 per gallon MORE than corn ethanol from the Midwest. “As far as E10 goes, that’s about a 16 cent per gallon differential,” said Cooper.
The reason California prefers sugarcane ethanol over corn is because they claim it is better for the environment, a claim which can be disputed, depending on how the life cycle analysis is determined (see previous post). But, even if sugarcane ethanol actually does have a better carbon footprint than corn ethanol, that advantage is lost in the transportation shuffle. “If we were serving the California market with corn ethanol from Nebraska and the Brazilians were satisfying their own demands with their own fuel, the emissions related with moving that fuel are about half of what we’re seeing with this shuffling dynamic,” said Cooper.
A new study shows that sugarcane ethanol may be dirtier than some believe.
A research team from universities in California, Iowa and Chile have found that sugarcane ethanol production creates up to seven times more air pollutants than previously estimated, according to news from the University of Iowa.
The researchers used agricultural survey data from Brazil to calculate emissions of air pollutants and greenhouse gases from the entire production, distribution, and lifecycle of sugarcane ethanol from 2000 to 2008. They determined that estimated pollutants were 1.5 to 7.3 times higher than those from satellite-based methods.
Greg Carmichael, Karl Kammermeyer Professor of Chemical and Biochemical Engineering in the UI College of Engineering and co-director of the Center for Global and Regional Environmental Research (CGRER), and UI assistant professor Scott Spak note that the findings reflect continued practices and trends that are a part of the production of sugarcane ethanol. These include the practice of burning sugarcane fields before harvest, as well as the fact that sugarcane production in Brazil continues to grow.
“We found that the vast majority of emissions come from burning the sugarcane fields prior to harvesting, a practice the Brazilian government has been moving to end,” says Spak. “However, the sugarcane industry has been expanding rapidly and moving into more remote areas, which makes it much more difficult to enforce new regulations over this growing source of air pollution and greenhouse gases.
“As people try to determine how to integrate biofuels into the global economy, Brazilian sugarcane ethanol has often been considered a more environmentally friendly fuel source than U.S. corn ethanol. In fact, the U.S. Environmental Protection Agency considers sugarcane ethanol an ‘advanced biofuel’ with fewer greenhouse gas emissions than conventional biofuels like corn ethanol. These new findings help us refine those estimates and move closer to making more informed comparisons between different fuel sources, and ultimately make better decisions about how to grow and use biofuels,” Spak says.
According to USDA, global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a smaller crop here in the U.S. Our crop was down 3.5 million tons compared to last year, but foreign corn production is expected to be 43.4 million tons higher, with China alone up 7.3 million tons this month based on the recently released government estimates.
The latest World Agricultural Supply Demand report also showed an increase in domestic corn ending stocks for 2011/12 of 5 million bushels to 848 million, thanks to an equal decrease in corn food, seed, and industrial use with early marketing-year corn use for sweeteners down slightly.
As farmers are starting to look ahead to the 2012 season, they will respond to the market signals like they always do. “I think you’re going to see the emphasis going to corn acres and I think the price is probably going to reflect that going into spring planting intentions,” said Jonah Ford of Ceres Hedge in Minneapolis in his evaluation of the report. USDA now forecasts the 2011/12 season-average farm price for corn to be about 30 cents lower than previously, but that is still a strong $5.90 to $6.90 per bushel.
As we head into 2012, one wild card in the corn demand situation is likely to be ethanol, with the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year. “That could potentially change how much ethanol is blended into gasoline,” said USDA chief economist Joe Glauber. “There are mandates in terms of overall production that has to be blended into gasoline, the issue is how much gets produced above and beyond the mandates.” However, industry analysts expect ethanol prices are expected to drop 30-40 cents per gallon at the wholesale level after the blenders tax credit expires, which should be incentive to blend more.
Ethanol production hit an all time high for the week ending December 2, according to the latest figures from the Energy Information Administration, averaging 954,000 barrels or over 40 million gallons daily, up about 2.5 percent from the previous record. Production this year could top 14 billion gallons, maybe a billion more than last year – but corn for ethanol production is actually down from last year at 5 billion bushels even. As a percentage of daily gasoline demand, daily ethanol production is nearing 12%. Meanwhile, U.S. ethanol exports have already doubled last year and are expected to hit 1 billion gallons this year.
All this is just a bunch of numbers, but the bottom line is that corn farmers, both here and abroad, are meeting increasing demand – and they will continue to do so. “We always hold that, no matter the challenge we face, the global marketplace will respond to make sure all needs are covered,” said National Corn Growers Association President Garry Niemeyer.
I’m reminded of a quote from the classic Saturday Night Live character Father Guido Sarducci in his bit about the “Five Minute University” where you learn what the average college graduate remembers after five years out of school. “Economics? Supply and Demand.” It’s really that simple.
Voilà (pronounced vwah-lah, of course) is a French term that literally means “See there!” – used in English to call attention to or express satisfaction over something. As in, “Take an ethanol plant, add corn, and voilà! – you have ethanol and high quality corn oil that can be used for biodiesel production.”
That’s what POET has been doing with patent-pending technology at six different ethanol plants that by the end of this year will have produced enough corn oil to make 12 million gallons of biodiesel.
POET has been selling its branded Voilà™ corn oil into biodiesel and feed markets since January, with POET’s plant in Hudson, South Dakota the first to produce it. The technology was installed in five additional POET plants this year, with more on the way in 2012. Plants that are producing corn oil today are POET Biorefining – Emmetsburg, Gowrie, Jewell and Hanlontown in Iowa. POET Biorefining in Laddonia, Missouri, will be the next to come online this month. The six plants’ combined capacity is about 100 million pounds of corn oil per year.
“Voilà has been a very strong part of POET’s business this year, and I’m excited to see more plants getting this technology,” POET founder and CEO Jeff Broin said. “The more we can diversify into new profitable products, the more successful our plants will be.”
Voilà is just one item on POET’s growing list of products created at its plants. In addition to ethanol, POET produces quality products for animal feed including Dakota Gold distillers dried grains. POET also captures carbon dioxide at seven of its plants for sale to beverage producers, and the company last year unveiled Inviz, a zein product used to replace petroleum-based films and coatings.
“This is pretty exciting. We’re producing energy as a by-product of energy,” Broin said. “It’s incredible to see how many different things we can get from a kernel of corn.”
Thanksgiving dinner this year will cost more, but it’s still a bargain no matter how you slice it.
According to the American Farm Bureau Federation (AFBF), the retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year. That may seem like a lot, but it still means that the average cost to feed a hungry table of ten is less than $50 – not even five bucks a plate. Try to get that in any other country for the same price!
“The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world,” said AFBF President Bob Stallman. “It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”
The turkey itself is what gobbled up most of the price increase this year. According to AFBF, a 16-pound turkey will cost about $21.57 this year at $1.35 per pound, an increase of about 25 cents per pound over last year. That triggered some misinformed columnists to start crying fowl and place the blame for the higher price on ethanol.
“Our biofuels policies are a big cause of the rising cost of food in recent years, and it just feels wrong to use food for fuel with so many families struggling to feed their families,” wrote Marie Brill of ActionAid in the Huffington Post, adding that “federal ethanol subsidies … are driving up the price of everything from eggs to milk to — yes, turkeys — and undoubtedly, some families will just have to go without.”
However, AFBF economist John Anderson says it’s more a case of basic economics – supply and demand. “Turkey prices are higher this year primarily due to strong consumer demand both here in the U.S. and globally,” said Anderson.
A more well-rounded and less emotional look at the cost of turkey comes from New York Times’ Wealth Matters columnist Paul Sullivan. “It turns out that turkey pricing is not much tied to commodities prices. Instead, other factors, like tight margins for farmers and perceptions of value, play a much bigger role,” he explains. “For most of us, the price we pay for our turkey bears little relation to what it costs to raise it.”
By the way, if you are into the organic scene, you can expect to pay double the amount for the average Thanksgiving meal, according to the Arizona Farm Bureau. The Organic Thanksgiving dinner with all the trimmings will cost $106.39, with a 16-pound organic turkey at $63.84 or $3.99 per pound. But really, even that is a bargain at just over $10 per person.
So, gobble up and give thanks this week for the most abundant and affordable food supply in the world.
The end of the Volumetric Ethanol Excise Tax Credit (VEETC) is coming and the ethanol industry is prepared.
“The market place has changed,” says Renewable Fuels Association president and CEO Bob Dinneen. “We’re now looking at $85-100 a barrel oil on a sustained basis so it’s difficult to go to the taxpayer and ask them to provide an incentive when the marketplace is already providing the incentive. We’re the lowest cost liquid transportation fuel in the world today.”
In addition, Dinneen says the ethanol industry itself has changed. “it’s not your father’s ethanol industry anymore. We are more efficient, we are utilizing new technology,” he said. “It’s an exciting time to be in the ethanol industry.”
However, Dinneen would like to see the oil industry sacrifice its tax incentives as well. “They are hanging on to their subsidies to their dying breath,” he said. “I hope at some point Congress takes a look at all the energy tax subsidies and decides to level the playing field.” Dinneen notes that, unlike the ethanol tax credit which is temporary, oil subsidies are imbedded in the tax code and “will go on for all eternity until somebody steps up and rips them out.”
As the VEETC goes away, however, fuel retailers are concerned about what that means for the future of E85 so the recently-formed Coalition for E85 is working to have 85 percent ethanol designated as an alternative fuel under the tax code.
“E85 as an alternative fuel is defined everywhere in the U.S. code, except for the Internal Revenue code,” explains tax code specialist Jeff Trinca, who is working with the coalition. That was because of the VEETC, to avoid “double dipping” in tax credits. “Now VEETC’s going away and what we’re basically saying is we would like E85 to be included in the definition of alternative fuels with propane, natural gas and others so there’s a level playing field,” Trinca says, noting that the coalition is only looking for a five year bridge to get the infrastructure in to be competitive with gasoline.
Trinca says they are working on getting a bill introduced in Congress to address the issue before the end of the year.
One of the busiest booths at the National Association of Farm Broadcasting Trade Talk last week was the National Corn Growers Association (NCGA), where president Garry Niemeyer of Illinois and first vice president Pam Johnson of Iowa spent the day doing interviews with broadcasters from all over the country.
Among the topics of interest were farm policy, this year’s crop, the American Ethanol partnership with NASCAR, USFRA, exports and atrazine. I hit on just about all of those subjects during my interview with Garry. Here’s some of his comments:
Farm Bill – “Passing farm bills usually takes about 15 months, and ironically, this one – if it happens – will be one of the quickest ever in history.”
Corn Crop – “All the adversity we’ve had, and here we are with the 4th largest corn crop. I’m thoroughly amazed.”
USFRA - “We’ve been laying a lot of the ground work here to get the message out to defend agriculture. We have everybody working together on the same page for the first time, telling our story.”
Trade – “These three free trade agreements give us the impetus to move forward to improve our infrastructure – locks and dams on the Mississippi and Illinois Rivers.”
American Ethanol – “We have been going back over the advertising and we’re at 71% acceptance, that’s with 75 million fans throughout the United States.”
Atrazine – “It’s been a stalwart, it works, it’s inexpensive, it keeps the price of food affordable for the American public.”
According to a report released by a nonprofit research organization on the findings of the Military Advisory Board, reducing our oil consumption by 30 percent through the use of biofuels “would significantly improve security and economics by decreasing deficits, preserving capital for job creation and increase energy reserves.”
This finding, and the report in general, provide solid support for an idea that already seems logical to most Americans. Over the past decades, it has become painfully obvious that the U.S. addiction to cheap foreign oil creates problems. From the need to continually interact with unstable, even hostile, regimes to an untenable vulnerability to the whims of a cartel-controlled market, everyday people here suffer because they do not have simple, readily available ways to fuel their cars on something besides oil.
In the report, released in October, this panel concludes that the obvious would be effective. If imported oil exposes the United States to myriad risks, grow a reliable, sustainable alternative at home. U.S. farmers, working with a robust biofuels industry, could actually harvest security.
Given that ethanol production has already tripled since 2005, our nation’s corn growers have demonstrated their ability to supply a growing market. Actually, the report itself even notes the efficiency gains in biotechnology, coupled with yield gains, could continually increase the amount of oil biofuels could displace.
Regulators, bureaucrats and politicians may not be the best sources for unbiased information, but retired military leaders certainly understand national security and can be relied upon to put the national interest ahead of their own. Sometimes a solution is simple. Harness the power of our land. Harness the power of our people. Grow a country that is self-reliant and secure.
A new USDA report gives even more credit where credit is due to the value of the ethanol co-product known as distillers grains or DDGS in livestock and poultry feed.
The major finding of the report is that a metric ton of DDGS can replace an average of 1.22 metric tons of corn and soybean meal feed. “We found that, on average, for the past 5 crop years (2006/07-2010/11), 1 mt of distillers’ grains substitutes for about 1.22 mt of corn and soybean meal combined in the United States,” concludes the Economic Research Service (ERS) report. That means that almost a full 40 percent of the corn used for ethanol goes directly back into the feed supply.
As of 2010/11, DDGS replaced soybean meal as the number two feedstuff fed, and is second only to corn. An increasing amount of soybean meal is being replaced over corn in livestock rations. The report also found that as DDGS market share for beef cattle have declined, market shares for dairy cattle, swine, and poultry have increased. Beef cattle’s DDGS substitution rate for corn is remains higher than any other type of livestock/poultry but is the lowest for soybean meal.
“This report reiterates what we have been saying for years: ethanol produces both fuel and food, in the form of high protein animal feed known as distillers grains,” said Growth Energy CEO Tom Buis, noting that distillers grains cost livestock producers about 25 percent less. “This valuable feed displaces a greater volume of field corn and soybeans, is less expensive to the producer and is much more nutritious for the animal.”
Geoff Cooper, Renewable Fuels Association Vice President of Research & Analysis, believes the report has important implications regarding ethanol’s impact on feed grains availability, feed prices, land use effects, and the greenhouse gas (GHG) impacts of producing corn ethanol.
“USDA’s new analysis clearly shows the importance of accurate DDGS accounting,” Cooper said. “The Environmental Protection Agency and CARB should immediately adopt these new findings into their GHG modeling for the RFS2 and LCFS. The resulting decrease in ethanol’s lifecycle GHG emissions could be significant.”
Earlier this year, RFA compared the production of DDGS to only the amount of corn used for feed. With estimated production of 39 million metric tons of distillers grains for feed in the current marketing year, that is the “equivalent to the 4th largest corn crop in the world, and is enough feed to produce 50 billion quarter-pound hamburgers – seven patties for each person on the planet – or enough to produce one chicken breast for every American every day for a year.” Accounting for soybean meal substitution, that makes even more!
What we call DDGS in general can also include a number of other individual ethanol co-product. There’s a whole alphabet soup of them – DDG, DWG, DDGS, DWGS, CDS, corn gluten feed (CGF), wet corn gluten feed (WCGF), and corn gluten meal (CGM). The report suggests that future industry surveys could be more precise if they estimated the effects of all the different ethanol coproducts on the U.S. feed complex.
This report includes some of the most specific and well-researched data on distillers grains production, consumption and the ratios by which it is being used in the different livestock and poultry markets. Read it here.
According to the report, “Major Uses of Land in the United States 2007,” the amount of land in the United States devoted to growing crops declined by 34 million acres – or nearly 8 percent – between 2002 and 2007. At 408 million acres, total cropland was at its lowest level since records were started in 1945.
There’s a hot new craze called the “Ethanol Shuffle” sweeping seaports from Sao Paulo to Los Angeles as tankers carrying Brazilian sugarcane ethanol bound for California pass those carrying corn ethanol bound for Brazil.
So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route. 
The researchers used agricultural survey data from Brazil to calculate emissions of air pollutants and greenhouse gases from the entire production, distribution, and lifecycle of sugarcane ethanol from 2000 to 2008. They determined that estimated pollutants were 1.5 to 7.3 times higher than those from satellite-based methods.
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“Voilà has been a very strong part of POET’s business this year, and I’m excited to see more plants getting this technology,” POET founder and CEO Jeff Broin said. “The more we can diversify into new profitable products, the more successful our plants will be.”
“The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world,” said AFBF President Bob Stallman. “It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”
“The market place has changed,” says 
As the VEETC goes away, however, fuel retailers are concerned about what that means for the future of E85 so the recently-formed 
One of the busiest booths at the 
“This report reiterates what we have been saying for years: ethanol produces both fuel and food, in the form of high protein animal feed known as distillers grains,” said Growth Energy CEO Tom Buis, noting that distillers grains cost livestock producers about 25 percent less. “This valuable feed displaces a greater volume of field corn and soybeans, is less expensive to the producer and is much more nutritious for the animal.”