Corn Commentary

Ugly Baby Has Bright Future

When National Corn Growers Association CEO Rick Tolman was introduced at the 21st American Coalition for Ethanol Conference and Trade Show, he was called “one of the most effective spokespeople” for the ethanol industry, and he certainly lived up to that introduction.

He started out by noting that the corn growers and ethanol producers in the audience were indeed and “powerful and influential group.”

“You’re the group that’s the cause of the Amazon rain forest deforestation, the obesity epidemic and world starvation and you stand accused of crimes against humanity. You’re the reason for the increase in dead zone of the Gulf, the cause of the Midwest flooding this spring, the reason that a tub of popcorn costs $5, that Britney had a meltdown and that Brett Favre came out of retirement and became a Jet, and you’re the cause of John Edward’s infidelity.”

Tolman talked about the press ethanol has been getting lately and focused in on T. Boone Pickens’ comment that corn ethanol was “the ugly baby of renewable energy.”

“Most babies are ugly when they are born,” Tolman said. “People say that the newborn baby looks a lot like Winston Churchill or, heaven forbid, T. Boone Pickens.”

Tolman says there are many comparisons that can be drawn between babies and the ethanol industry – they go through lots of trauma and stress being born, they need help to survive and grow, and they have a great deal of potential.

“Corn ethanol may be the ugly baby, that’s kind of a badge of honor,” he said. “It is the ugly baby with a very bright future.”

He concluded with pictures of his own grandbabies and said if anyone wants to call them ugly, “I know their grandmother, I wouldn’t do that.”

Food for Phones

Samsung unveiled its latest “eco-phone” this week in Beijing.

The E200 Eco is the third phone Samsung has introduced this year with parts made from bioplastic materials extracted from corn and the first which features the entire case made from corn-based plastic.

The E200 Eco features a camera, video messaging and an MP3 player. The phone will be available in Europe next month but does not yet have an American release date.

Samsung affiliate Cheil Industries has been developing these environmentally friendly materials.

Some Weekend Reading on Ethanol

Two recent reports take a broad look at the research and statistics related to ethanol’s impact on food and fuel. On July 31, Ethanol Across America published a new white paper that compiled existing data and research. It “notes that while corn prices have indeed nearly doubled in the past year, according to the U.S. Commerce Department’s Consumer Price Index (CPI), food costs have increased within their historical annual average of 2.9%. However, fuel prices have risen 82% since 2006 and according to the U.S. Department of Agriculture have had a much greater impact on food prices due to higher costs of bringing products to market and food processing.”

Douglas A. Durante, Director of the Ethanol Across America campaign, said “Ethanol demand has accounted for 20 percent of the increase in demand for grain, with considerably less when the distillers grains are returned to the feed supply. The other 80 percent is due to global demand from other countries that are increasing their quality of life and diet. More people wanting more meat and more dairy products will continue to drive the market much more than biofuels.”

And the North Dakota Farmers Union is distributing an educational booklet called “The Popcorn Theories.” The booklet dispels some of the myths being perpetuated in the public arena about what is driving today’s food prices. Chief among the theories is the notion that ethanol production is responsible for the higher cost of food.

According to NDFU, the facts show that high energy costs are the primary culprit driving today’s food prices. The price of oil has forced the cost of food higher as the average food item travels more than 1,500 miles before reaching the final consumer. Other contributing factors include weather-related production shortages, the weak dollar, growing export demand from developing world economies, and market speculation.

Where Does Gov. Perry Shop?

Maybe Texas Gov. Rick Perry is one of those politicians who likes to spend too much on things like haircuts. I can’t otherwise understand his statement in the Wall Street Journal today that corn is “close to $8 per bushel.”

It’s actually a lot less than that, nearly half in some parts.

Corn Crop Gets a Boost

NASSThe August USDA crop production report has the corn crop recovering even better than expected.

Corn production is now forecast at 12.3 billion bushels – almost five percent higher than predicted last month. Based on conditions as of August 1, yields are expected to average 155.0 bushels per acre, up 3.9 bushels from last year. If realized, this yield would be the second highest on record, behind 2004. Production would be the second highest on record, behind last year when producers harvested the most acres of corn for grain since 1933.

Meanwhile, USDA lowered its yield forecast slightly for soybeans. But, soybean production is still forecast at 2.97 billion bushels, up 15 percent from last year. All wheat production, at 2.46 billion bushels, is virtually unchanged from the July forecast but up 19 percent from 2007.

Read the full report here.

True Grits

Now here is a unique “new use” for corn – jewelry made from grits.

Yep – you read that right. The “Grit Lady” – aka Carol Kautz of Lilburn, Georgia – makes the corn based Southern breakfast food into all kinds of wearable fashion items. Some of her creations include the pictured heart-shaped flag, grapes, peanuts, snowmen, Easter eggs, crosses, watermelons – in pins, pendents, earrings, magnets or ornaments.

According to Carol, “I have sent my grits jewelry to government officials as well as various celebrities.”

All of her pieces are handmade and treated to protect them from insects and deterioration. “No two pieces are exactly alike as some dry flat while others curl somewhat when they dry,” she says.

She sells items in bulk – minimum of 12 pieces per order – and I am quite sure she can do an ear of corn. Find out more on her website

Wonder what the critics will say about using food for jewelry?

How Much Corn?

USDA will provide its latest answer to the question “How much corn this year?” early Tuesday morning with the latest crop forecast.

The pre-report wagering is expecting that the report will indicate less flood damage to the crop than was originally anticipated in Iowa, Illinois, Missouri and Wisconsin. The average analyst forecast is calling for a crop of 11.94 billion bushels of corn this year – not off too much from the original forecast of 12.2 billion prior to the flooding.

The condition of the crop has been rated higher than last year in recent weeks – about 66 percent good to excellent – mainly the result of ideal growing conditions over the past month.

The August crop report is significant because it is the first of the year based on actual visits to farm fields and interviews with growers. The report will be released at 7:30 central time Tuesday morning.

McCain at the Iowa State Fair

Republican presidential candidate John McCain visited the heart of the corn belt Friday, ate a pork chop on a stick and talked about increasing trade opportunities for agriculture.

During a speech at the Iowa State Fair, McCain promised to open markets for agricultural products. “There’s $150 to be made for every hog that’s raised and pig that’s raised in this state. $30 of those $150 is exports that are sent to markets around the world. If we approve of a free trade agreement between the United States of America and South Korea, that will be 10 more dollars,” McCain said. “The agricultural products here in the state of Iowa can feed the world. And we’re not afraid to compete with anybody in the world, my friends.”

McCain also talked about the need for energy independence and promoted his Lexington Project plan for energy security, which includes wind, tide, solar, nuclear, and renewable fuels.

However, he was very clear about his position when it came to ethanol. “And I want to tell you, we will disagree from time to time. I believe in renewable fuels. I don’t believe in ethanol subsidies, but I believe in renewable fuels. I believe we have to do all of those things to restore our economy.”

Gotta give him credit for his courage and honesty on the issue in the middle of the country’s biggest ethanol producing state, standing next to the state commissioner of agriculture and Farm Bureau president. Nobody threw a corn dog at him.

EPA Decision Based on Impact

The words from Environmental Protection Agency Stephen Johnson Thursday were music to the ears of the corn and ethanol industries.

EPA Johnson“Today, EPA has denied a request submitted by the state of Texas to reduce the nationwide Renewable Fuels Standard,” Johnson said. “As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at nine billion gallons in 2008 and 11.1 billion gallons in 2009.”

According to EPA’s justification for the decision, “implementation of the RFS would have no significant impact in the relevant time frame (the 2008/2009 corn season), and the most likely result is that a waiver would have no impact on ethanol production volumes in the relevant time frame, and therefore no impact on corn, food, or fuel prices.”

EPA also determined that the evidence also indicates that even if the RFS mandate were to have an impact on the economy during the 2008/2009 corn marketing year, it would not be of a nature or magnitude that could be characterized as severe. Even in the modeled scenarios where a waiver of the RFS mandate might reduce the production of ethanol, the resulting decrease in corn prices is anticipated to be small (on average $0.30 per bushel of corn), and there would be an accompanying small increase in the price of fuel (on average $0.01 per gallon in fuel costs). The average increase in corn prices in all modeled scenarios, including scenarios where the RFS mandate would and would not have an impact, was $0.07 per bushel of corn. Such levels of potential impacts from the RFS program do not satisfy the high threshold of harm to the economy to be considered severe.

Read the basis for the EPA decision here.

Listen to Johnson’s statement on the decision here:

EPA Upholds Renewable Fuels Standard

EPAThe Environmental Protection Agency announced today that it would deny a request by Texas Governor Rick Perry to reduce the Renewable Fuels Standard.

EPA Administrator Stephen Johnson says they carefully considered the more than 15,000 comments on the issue and found that “the RFS is not causing economic harm but is strengthening our nation’s energy security and supporting American farming communities.”

Stay tuned for more – the press conference is underway.

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