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.
France’s top administrative court on Monday overturned a government order banning French farmers from planting genetically modified crops France’s agriculture ministry imposed a ban in February 2008 amid concerns over public safety, but its decision had already been called into question by the European Court and has now been annulled by the State Council.
Truthfully, their ongoing and Zombie-like fight against proven GMO technology has been like watching a bad movie that you just can’t stop watching. The ludicrous and persistent effort has been watched by farmers, scientists, regulators and some consumers without cable TV around the world. And one might suspect there might even be some betting pools initiated regarding who would finally put a bullet in the head of this persistent, riveting political theatre. (Ok, I have France planting their first GMO crop in 2013 with 3-1 odds).
Both courts overturned the national ban declaring the French Government presented no scientific evidence of any risk to health or the environment from these crops. EuropaBio’s Director of Green Biotechnology Europe, Carel du Marchie Sarvaas, said: “These judgments from the highest European court and the highest French court send one message loud and clear: bans of GM crops cannot be based on political dogma. As both judgments state, no ban on planting GM crops can be declared without valid scientific evidence, something that France and other European countries have not produced.”
Even if French corn growers don’t get to enter the modern world of corn production in 2012, this is yet another positive sign that the belabored and disingenuous GMO soap opera is on its final legs. Forgive me for saying this but I can hear the EU fat lady signing.
The French court’s decision also offers support for what U.S. scientists, regulators, and industry have been saying all along….there has been copious scientific testing and years of actual use in the real world and the GMO bogeyman remains firmly in the closet where he belongs. However, evidence rises that France will launch new restrictions. French president Nicolas Sarkozy said this week the government was preparing a “new safety clause” to forbid sowing of MON810 produced by Monsanto.
“The French government keeps and will keep its opposition against the cultivation of the Monsanto 810 maize on our soil,” Sarkozy said during a visit in southwestern France. Why do I have this feeling that President Sarkozy DVR’s the “Walking Dead?”
By all accounts, China is producing a record amount of corn this season, but still not enough to meet their domestic demand, which means they are also expected to import a record amount of corn.
According to the latest USDA supply-demand forecast, corn production for China this year was increase 4.0 million tons to a record 182.0 million tons. That figure is supported by 2011 weather data, information from crop tours, and early forecasts by officials in China. The U.S. Grains Council after its annual China Corn Harvest Tour earlier this month came up with a lower figure of 167 million metric tons (6.6 billion bushels), which is still a bumper crop. That was calculated on the basis of a projected corn harvest area of 30.9 million hectares (76.35 million acres), with a yield of about 85.9 bushels per acre – not impressive compared to the U.S., but pretty good for them.
“The 2011 corn crop I witnessed in China was far more impressive than I expected,” said Don Hutchens, Nebraska Corn Board executive director who participated in the USGC tour. “They have little, if any, crop loss and average yields are expected to be in the mid 80 bushel per acre range.”
However, all that corn is still expected to be insufficient to meet China’s demands. USGC expects China will need to import 5-10 million tons of corn for the 2011/12 season, a significantly more than USDA’s estimate of 2.68 million tons.
“With the fastest-growing middle class in the world, China has a great opportunity to enhance its food security through trade. That translates into a growing opportunity for U.S. producers over the next several years,” said Dr. Wendell Shauman, USGC chairman.
As recently as 2002/2003, China exported nearly 600 million bushels of corn. Exports then began to decline, and China was a net importer in 2009/2010 and 2010/2011.
The 2011 IFAJ Congress is the annual meeting of the International Federation of Agricultural Journalists. The program includes multiple farm stops to learn more about agriculture in the host country which this year was Canada. One of our stops was the Hensall District Co-operative. We were welcomed by CEO, Earl Wagner, who gave us an overview of the various business units of the co-operative. The photo shows a display of the types of commodities grown by members and marketed by HDC.
HDC is a diversified farmer-owned Ontario Agricultural Co-operative. Established in 1937, HDC is the largest independent agricultural co-operative in Ontario with 4000 members who elect 10 Board of Directors. HDC employs 300 staff members with annual sales of 328 million.
According to Earl, the crop this year was impacted by weather so that yields are going to be down significantly but still much higher than even recent years. Last year was apparently a record crop in Canada.
One of our group asked him if HDC had gotten into the ethanol production business and he said that they have not. However, they did sell some land a few years ago to GreenField Ethanol who intended to build a plant but to date hasn’t done so. HDC does sell corn and Earl says that the demand for corn for ethanol production has been a good thing. You can listen to my interview with Earl here: Interview with Earl Wagner
Getting $7/dozen for sweet corn in Canada is a pretty sweet deal for Channing Strom, owner along with his wife Amy, of Strom’s Farm. Especially if you sell an average of 10-12 thousand dozen/year. This is a picture of Channing, who is outstanding in his field, during a visit to the farm by members of the International Federation of Agricultural Journalists (IFAJ). On this farm the Strom’s grow sweet corn and pumpkins for people to come out and purchase. They promise that the sweet corn you buy is never more than two hours from the stalk! They also have a six acre corn maze using field corn and have a variety of other family fun features that bring out thousands of people to spend several hours of outdoor enjoyment. It is agri-tourism done right. You can see part of the IFAJ group taking the corn maze challenge in the photo below.
The Stroms are part of Taste Real, a branding initiative for locally grown food in the Guelph Wellington area.
When you see the taste real logo, you know that you are experiencing food grown close to home! When you see the logo at farmers markets, farm gate stalls, on-farm stores, at your favourite retail outlets, restaurants and places to stay you will know it is home to real local food. The brand exists to support local businesses and farms and represents a group of people who are ….Passionate about the way local food is grown, prepared, presented and enjoyed, and how real it tastes!
After touring the farm the Strom’s served a dinner that included fresh picked and boiled sweet corn. It is definitely some of the best I’ve ever eaten. Having more than one ear was desert for me!
The U.S. Department of Agriculture estimates that passage of all three FTAs would result in 22,500 new jobs in that sector alone. While this would not return unemployment levels to their pre-crisis lows, it would drastically, immediately change the lives of both the 22,500 hired as well as the approximately 67,500 people who depend upon them. By opening these markets, Congress would directly improve the financial, physical and emotional well-being of 90,000 Americans.
Albeit in a less dramatic manner, the passage of these trade agreements benefits the entire nation. The American Farm Bureau estimates passage of these agreements would generate an additional 2.5 billion dollars in the U.S. economy through agricultural trade alone. If Congress is willing to fight tooth and nail over cutting a few billion dollars from current spending, actually growing the national economy should be a high priority.
The emcee for the Global Farmer to Farmer Roundtable conducted by Truth About Trade & Technology was Bob Thomson. He says the participating farmers were looking at what it’s going to take to thrive in the next several years. High on their list is modern technology. He says they realize that to feed the projected population equivalent of two more countries the size of China in the next forty years it will take very high productivity agriculture. The alternative will be massive destruction of forests and that will lead to a lot of undesirable results.
Bob says a real concern and frustration expressed, especially by European participants, was the extent that some activist organizations have dominated the debate and how little their governments are doing to help them. It’s hard to be competitive when you’re overburdened by regulations. Participants from countries like India said that biotechnology products will be critical for them. They weren’t so much interested in subsidies as being on a level playing field. A need to communicate their stories was also expressed.
When you listen to my interview with Gabriela Cruz, Portugal, below you’ll understand why she was chosen to receive the Kleckner Trade and Technology Advancement Award during the TATT Global Farmer to Farmer Roundtable. The program was sponsored by the NCGA. Gabriela was presented the award by Dean Kleckner, Chairman, Truth About Trade & Technology.
Gabriela Cruz is passionate about many things: the family farm that she and her sisters work and manage on the eastern border of Portugal; the use of soil conservation to combat the erosion that annually tries to steal their land from them; and access to the technology that will allow her to prevail in the future.
Those passions, and Cruz’s drive to change attitudes of European governments that block farmer-access to genetically modified (GM) crops, led to her selection as the 2010 winner of the Kleckner Trade and Technology Advancement Award.
The award, given by Truth about Trade and Technology (TATT), seeks to recognize “strong leadership, vision, and resolve in advancing the rights of all farmers to choose the technology and tools that will improve the quality, quantity, and availability of agricultural products around the world.”
For years discovering how many perks, incentives and subsidies the global oil industry receives has been the Holy Grail of biofuels supporters. They are so numerous and come from so many places it is mind boggling, troubling and something akin to finding the Loch Ness monster. Thanks to Todd Neeley of DTN a hint of our true exposure is surfacing in part one of a new “must read” series.
This is critical information because consumers should know what their addiction to imported petroleum is really costing them and Big Oil has never been shy about bashing incentives for the domestic ethanol industry, the only real competition they face in the marketplace. They try to be-little the contributions of family farmers and the American ethanol industry that now produce as much ethanol as what we currently import from Saudi Arabia.
At the end of the day you have to question why a century old industry like oil, whose major players consistently rank in the Fortune 100 companies, conservatively receive 10 times the incentives received by ethanol. As Neeley says, “Using the most liberal definition of public financial support, including tax breaks on equipment depreciation and foreign investments, oil’s total benefit from the public treasury can be as much as 10 times that of ethanol.”
DTN’s tally for state and federal tax incentives for oil comes to $17.9 billion annually. All told the tax deductions, credits and other public benefits the oil industry receives, U.S. taxpayers support oil to the tune of between $133.2 billion and $280.8 billion annually. “The comparable figure exclusively for ethanol is $7.1 billion. This does not include tax credits and other incentives that both industries share, such as the blenders’ credit or VEETC”…or the roughly $7 billion to $28 billion in military costs to protect oil supplies. Let’s not forget the White Elephant of lives lost either.
Interestingly, oil interests say they need the taxpayer largesse to do research and explore for more petroleum to continue our legacy of dependence. Makes you wonder what the impact would be if they invested the $200 billion oil says they spend on research in making ethanol more efficiently and from even more sources.
And as for oil exploration, I would rather invest my money in ethanol. . We know where farmers live and what their productive capabilities are when they are challenged to meet market demand. Eight record crops in the last eight years prove it.
We often hear about friction between the producers of corn and livestock over the growth in the production of ethanol. One Iowa farmer had an idea to diversify his operation and do both! Judging by the tour that the TATT Global Farmer to Farmer Roundtable participants received at his farm, Couser Cattle Company, he’s doing it very successfully.
Our host was Bill Couser. Bill conducted a fascinating presentation about his marriage of row crop farming (corn/soybeans), livestock production and ethanol production! You can see a portion of his explanation in the video below. He used a long table to display all the products he produces starting with an ear of corn and winding up with ethanol (2.81 gal/bushel of corn) as well as by-products like DDGS and ultimately fine quality beef. I loved his description about the whole food vs. fuel debate, “It’s rubbish!”
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. 
According to the 
