Make Food Companies Accountable

In Ethanol, Food Prices by Cindy

Several agricultural organizations are calling on Congress to hold hearings on food price increases that food companies claimed were due to ethanol production.

cerealThe groups held a press conference on Thursday to discuss the recent report from the Congressional Budget Office regarding ethanol’s impact on food prices. The CBO reported that higher corn prices due to expanded production of ethanol actually only accounted for only 10 to 15 percent of the overall increase in food prices last year.

Leadership from the American Farm Bureau Federation, National Farmers Union, National Corn Growers Association and Growth Energy joined together for the conference call. AFBF president Bob Stallman began by saying, “The results come as no surprise to us. We have called for hearings to determine why food prices have increased. It’s disingenuous to only look at corn when determining why food prices are increasing.”

NCGA CEO Rick Tolman wants an apology from the Grocery Manufacturers Association. “I think that grocery manufacturers and others owe farmers a huge apology for the damage they’ve done to the reputation among consumers,” Tolman says.

CBO Report Spins Both Ways

In Ethanol, Food Prices, Food vs Fuel, government, Media by Cindy

The Congressional Budget Office report on ethanol and food prices released last week spun both ways for ethanol, depending on the media outlet and which side of the food versus fuel debate your corn is buttered.

For example, the San Francisco Chronicle headline proclaimed “Energy Blamed More than Ethanol For Food Prices.” Others with a similar spin included Midwestern papers like the Des Moines Register and the Grand Island Independent.

Headlines from the Associated Press and Reuters, however, led with a more negative spin. AP headlined “Report: Ethanol Raises Cost of Nutrition Programs.” Unfortunately the report only quantified the effect of higher corn prices on last year’s food price increases, even though it specifically notes that “certain other factors—for example, higher energy costs—had a greater effect on food prices than did the use of ethanol as a motor fuel.” It would be nice to know how much higher gasoline and electricity prices helped to raise the cost of nutrition programs, but CBO was only charged with finding out how much ethanol was to blame.

The report made some important points about the inability to predict ethanol’s future impact on food prices because the forces determining that impact move in opposite directions.” Federal mandates now in place require additional use of ethanol in the future, which would continue to put upward pressure on prices. In contrast, increases in the supply of corn from cultivating more cropland, increasing crop yields, or improving the technology for making ethanol from corn or other feedstocks (raw materials) would tend to lower food prices.

What was interesting about the report was that there was something in it for everyone, with both sides of the food versus fuel debate claiming that it supported them. I guess the government just wanted to be fair to everybody.

Water Study Fuels New Wave of Ethanol Criticism

In Ethanol, Farming by Cindy

It hasn’t even been officially published yet, but already a University of Minnesota study on water usage and ethanol production is generating a wave of negative headlines.

“Biofuel Production Threatens Water Supplies,” “Bioethanol’s Impact On Water Supply Three Times Higher Than Once Thought,” and “Ethanol Production Consumed 861 B Gallons of Water in ’07” are just a sample of the headlines from the report which is scheduled for publication Wednesday in the journal Environmental Science and Technology. However, the headline on the press release from the U of MN (which was supposedly embargoed until 12:01 a.m. Wednesday) reads more positively – “Midwestern ethanol plants use less water than western counterparts.”

corn towerThe study is the first to compare water use in corn-ethanol production on a state-by-state basis – which they found ranges from as little as six gallons of water for each gallon of ethanol in Iowa – the number one ethanol producing state – to as much as 2,100 gallons in California, which produces very little ethanol. The authors used agricultural and geologic data from 2006-2008 to develop a ratio showing how much irrigated water was used to grow and harvest the corn and to process it at ethanol plants. The study “highlights the need to strategically promote ethanol development in states with lower irrigation rates and less groundwater use,” the authors say.

As always, the problem with this issue is perspective. Check out some of the EPA’s Water Trivia Facts, which includes this little tidbit: How much water does an acre of corn give off per day in evaporation? The answer is 4,000 gallons. Is that counted when determining water usage for corn ethanol production?

And how does ethanol production compare to gasoline production? According to the same trivia facts (converted to gallons from barrels) it takes at least 44 gallons of water to refine one gallon of crude oil. Does that count the water used to pump the oil out of the ground?

Here’s another little trivia fact. A typical 40-million-gallon-a-year ethanol plant uses almost exactly the same amount of water per as an average 18-hole municipal golf course. But then, golf courses don’t have to defend their water usage – only the people who are trying to produce food and fuel for our country do.

DDGs Can Give Piglets a Boost

In Distillers Grains, Ethanol, Livestock by Cindy

New research indicates that dried distillers grains (DDGS) can help hog producers looking for new feed supplements for younger swine.

ARS piglets like ddgsAccording to studies by Agricultural Research Service (ARS) scientists, feeding the ethanol by-product to piglets can give their immune systems an extra boost.

The majority of DDGS are fed to beef and dairy cattle but livestock producers also use DDGS to supplement the diet of older pigs. So Tom Weber, a physiologist at the ARS Swine Odor and Manure Management Research Unit in Ames, Iowa, partnered with research leader Brian Kerr and microbiologist Cherie Ziemer to study the effects of feeding DDGS to young pigs.

What they found was an increase in cytokine expression in the pigs’ small intestine, which they linked to DDGS consumption. Cytokines are chemical messengers that are essential for proper immune function. This response reinforced findings of previous DDGS studies showing that pigs consuming diets supplemented with DDGS exhibited reduced levels of ileitis, a common inflammation of the small intestine.

Because too much fiber can reduce the growth of piglets, the key is to feed them just enough DDGs to boost their immune systems, which the researchers capped at about 7.5 percent, compared with up to 40 percent for adult pigs.

Missouri Corn Growers Spearhead Ethanol Campaign

In Ethanol, Research by Cindy

MO RFA adThe Missouri Corn Growers Association has partnered with the state’s six farmer-owned ethanol plants to foster the development of renewable fuels in Missouri through a new website and a print ad campaign.

The Missouri Renewable Fuels Association (MoRFA) online resource, www.mo-rfa.org, contains research and information about ethanol, links to other renewable fuel articles and an overview of the state’s farmer-owned biorefineries. Also featured on the new site are three print ads currently running in many Missouri newspapers that address common misconceptions and promote the benefits of ethanol.

MO RFA adThese print ads are very well done and pretty provocative. I have seen the OPEC ad in our local paper here in the state capitol and was very impressed. They are making the point with consumers and state lawmakers that ethanol is important to Missouri’s economy. “According to a recent study by the Senate Appropriations Committee, a typical ethanol plant will maintain 928 Missouri jobs, provide $30.7 million in Missouri employment income, create $59.3 million annually in value-added income to Missouri’s economy and generate $130 million in economic activity in our state,” said Gene Millard, MoRFA president and chairman of Golden Triangle Energy Cooperative, a farmer-owned ethanol plant in Craig, Mo. “Those numbers translate to real lives, real jobs and real growth.”

In another move to recognize the importance of the industry, Missouri Governor Jay Nixon issued a proclamation this week declaring April as Corn Month in Missouri. A ceremony at the state capitol “commended the more than 15,000 Missouri farm families that are responsible for helping produce the nation’s top crop.”

This is all critical right now during the Missouri legislative session as there is a bill being considered that would repeal the 10 percent ethanol mandate, which took effect Jan. 1.

USDA Lowers Ending Stocks

In Farming, USDA by Cindy

The April World Supply and Demand report out today from USDA lowers ending stocks for corn, wheat and soybeans more than most analysts were expecting.

USDACorn ending stocks were cut by 40 million bushels “as higher expected feed and residual use more than offsets a reduction in food, seed and industrial use.”

Feed and residual use is raised 50 million bushels as March 1 stocks indicated higher-than-expected disappearance during the December-February quarter. Food, seed, and industrial use is lowered 10 million bushels with lower projected use for starch (other than for fuel and beverage alcohol) more than offsetting higher expected use for sweeteners.

The 2008/09 season-average farm price for corn is projected at $4.00 to $4.40 per bushel, up 10 cents on both ends of the range. This compares with the 2007/08 record of $4.20 per bushel.

Transition to a Global Biofuels Economy

In Audio, Ethanol, International by Cindy

Farm Foundation Transition To A Bioeconomy ConferenceFarm Foundation hosted another segment in their “Transition To A Bio Economy” conference series last week in Washington DC, focusing this time on “Global Trade and Policy Issues.” There were a number of very interesting presentations made at the conference, but here is just a sampling that provided commentary relevant to corn.

Farm Foundation Seth MeyerSeth Meyer with the Food and Agricultural Policy Research Institute (FAPRI) discussed how biofuels policies are affecting commodity prices, trade and exports. “I think the last couple of years of proved that there are a lot of moving parts here, there are a lot of other things affecting export volume,” Meyer says. “It’s important to put biofuels policies in context.”

He noted that it’s difficult to predict the future for biofuels policy and how it might impact producers. “Things are very much in flux,” said Meyers. “There’s potentially a lot of policy risk for producers.”

Chuck Zimmerman interviewed Seth at the conference: [audio:http://www.zimmcomm.biz/farm-foundation/ff-global-09-meyer-1.mp3]

Farm Foundation Tom HertelAnother interesting presentation at the conference had to do with the impact of biofuels policy on global poverty.

Tom Hertel of Purdue University says they conducted an international study of 16 developing countries and the impact of biofuels production on the poverty level and found that “it’s a very complex issue” because higher food prices may have a greater or lesser impact depending on whether the poverty is located in more urban or rural areas. Since more poor live in rural areas, when agricultural prices are higher, they can actually benefit from higher returns.

You can listen to an interview with Tom here: [audio:http://www.zimmcomm.biz/farm-foundation/ff-global-09-hertel-1.mp3]

More coverage from the Farm Foundation conference can be found here on Agwired.com.

Cornhusker Happiness

In General, Media by Cindy

Cornhuskers are the happiest people in the nation, according to MainStreet.com’s new Happiness Index.

Nebraska came out on top in the Happiness Index, which used unemployment figures, foreclosures and non-mortgage debt to determine a state’s overall financial well being.

Ethanol production got some of the credit for Nebraska’s happiness in a Good Morning America story aired on Monday morning, which noted that Nebraska’s “ethanol plants, in particular, have flourished and the ongoing effort to grow industry has enabled people who lose jobs to find new ones relatively easily.”

Two other Corn Belt states ranked second and third according to the index – Iowa and Kansas – and MainStreet.com explains that people in the Midwest tend to live more within their means, unlike people on the coasts. The unhappiest states are mainly on the east or west coast – Rhode Island, Nevada, California, Florida, and Oregon.

Weather Delays

In Farming by Cindy

April showers may bring May flowers, but April snow storms bring delays for baseball fans and farmers.

Weather over the weekend across the corn belt was far from spring-like, with a storm system that brought strong winds and heavy snow to many areas that should be getting ready for spring planting.

The National Weather Service reported up to 16 inches of snow in Western Nebraska and 7-10 inches in parts of Iowa, with additional snow in the Dakotas and Minnesota. Monday morning, up to 7 inches of snow fell on Michigan and about four inches in northern Indiana. Frost and freeze warnings were in effect as far south as northern Texas and east to North Carolina. In Alabama, National Weather Service meteorologists have posted freeze watches and warnings for late Monday and snow showers are forecast for Georgia.

The cold and wet weather is delaying fertilizer application and raising the specter of planting delays, which would have an impact on corn acreage in particular.

Meanwhile, the weather is also causing delays for opening day of the baseball season. The season opener between the Kansas City Royals and Chicago White Sox scheduled for Monday has been postponed until tomorrow, and while the St. Louis Cardinals are still (at the moment) scheduled to open their season at 3:15 p.m. against the Pittsburgh Pirates, with snow in the forecast that game may also be postponed.

Common Sense in Oregon

In General by Ken

In Oregon, far-flung from the Corn Belt, the ethanol debate rages as lawmakers consider state legislation that will alter the state’s 2007 renewable fuel standard. Carol McAlice Currie, a columnist from the Salem Statesman-Journal newspaper covers the brouhaha and quotes a state official:

“You don’t get from zero to cellulosic ethanol (created from wood thinnings or agricultural waste such as grass straw, not corn) without steps,” said Brent Searle, special assistant to the state’s director of agriculture. “You build the refining plants, and then they adapt to other feedstocks. It’s just like computers or computer software. There’s always Version 1, which is then tweaked to produce Version 2 and so on. Corn is in abundance, so that what we’re using. Technology is still being pushed for cellulosic ethanol, and hydrogen is years beyond that. With the government incentives in place, we can build capacity. But it takes time.”

The columnist opines:

“And to the naysayers who claim that ethanol really isn’t a cleaner fuel when its feedstock has to be imported (as it currently does in Oregon), a few words: Oregon is a feed-deficit state. We import corn anyway to feed farm animals. One of the byproducts of ethanol production is the creation of wet distillers’ grain, which is a livestock feed, so we would be adding value to an agricultural process already happening.”