MO Corn Growers Fighting Back

In Ethanol, Food Prices, General, State Groups by Cindy

Corn is selling under the cost of production, yet the price at the grocery store remains the same and food processors are continuing to blame ethanol producers for high food prices. Corn growers in Missouri are fighting back to get the truth out to consumers.

MCGAMissouri Corn Merchandising Council chairman Keith Witt of Warrenton says, “Judging by the record profits and smaller packaging, the motive of big food companies is crystal clear. Their focus is on their bottom line – at the expense of farmers and consumers.”

And that bottomline looks pretty good right now. This quarter alone, Kraft boasted a net income of $1.4 billion – more than double last year’s results. Sales at Kellogg’s climbed 9.5 percent and third-quarter net income increased from $305 million last year to $342 million this year.

“Consumers deserve the truth and America’s farmers deserve an apology,” Witt concluded.

To that end, Missouri Corn has launched a series of radio ads to help educate consumers on the “sticky pricing” in today’s food industry. The spots question how grain prices have dropped, yet food prices remain the same, therefore eliminating the blame ethanol has unfairly been given.

Farm Broadcasters Interview Corn Growers

In General, Media by Cindy

NCGA at NAFBThe National Association of Farm Broadcasting annual meeting each year in Kansas City includes an intense six hour “Trade Talk” where over 100 farm broadcasters have the opportunity to meet and interview representatives from over 100 ag organizations and companies. With all the issues surrounding corn this year, the National Corn Growers Association booth was busy the entire time fielding questions from reporters.

NCGA at NAFBNCGA president Bob Dickey of Laurel, Nebraska and first vice president Darrin Ihnen of Hurley, SD are seen here being interviewed at the NCGA booth. Among the topics they were discussing – corn price volatility, ethanol, sustainability, food versus fuel, the economy, and the upcoming new administration. The NCGA officials were interviewed by 30-40 reporters during the event – just about as many as you can do in a six hour period!

I have personally participated in NAFB’s Trade Talk since it’s inception some 15 years or so ago (getting too old to remember!) and I can tell you that it is probably the single best event of the year for both the interviewers and the interviewees. The members of NAFB represent both individual stations and radio networks across the country and reach an untold audience of farmers and ranchers, as well as rural lifestyle and even urban consumers in some cases. It is a great way for organizations like NCGA to get information out to a wide audience in a relatively short time.

Academic Smart About Ethanol

In General by Ken

As the director of Iowa State University’s Bioeconomy Institute, Dr. Robert C. Brown has all the right credentials when it comes to discussing the impacts of increased ethanol production on food prices and land use. He tackled both these debates in yesterday’s Des Moines Register.

On food prices:

The starvation hypothesis is a popular one, but it has been easy to disprove. There is no correlation between world hunger and the amount of U.S. corn available to export. As recent corn-price declines have indicated, there is not even a correlation between the price of food in the supermarket and the price of corn.

On land use:

There is no scientific evidence indicating that deforestation is driven by biofuels production. Whereas the world has lost 500 million acres of rain forest in the past 10 years, the U.S. biofuels industry has diverted less than 20 million acres to ethanol production. Something else is responsible for the epidemic of deforestation.

On the benefits of ethanol:

The solution to our loss of rain forests and the resulting emission of greenhouse gases is not to shut down the U.S. biofuels industry, which has played an important role in reducing our dependence on imported petroleum and improving rural economies. The solution is to expand agriculture research and outreach in those parts of the world struggling with loss of farmland due to soil degradation.

Land Use Impact Claims Expertly Challenged

In Environmental, Ethanol by Ken

The Renewable Fuels Association today provided a significant amount of firepower to those who think we need to proceed with great caution when trying to track indirect land use impacts caused by U.S. ethanol production. In its new research paper, the organization made several things clear:
  • Growth in ethanol production has not significantly driven land use changes
  • Increased production reduces the amount of land needed for agriculture
  • Agricultural land use can expand without jeopardizing forest or other sensitive lands
  • Models used to predict future agricultural land use changes have limitations
  • Ethanol feed coproducts mitigate land use change
  • U.S. corn and soybean exports remain strong while biofuels production grows

New Ethanol Group Takes on Food Companies

In Ethanol, Food vs Fuel by Cindy

A group of ethanol producers has announced the launch of their new organization, Growth Energy, with the release of a policy brief and an ad campaign to set the record straight on food prices. The campaign comes at a time when corn prices have decreased by more than fifty percent and oil prices have been tumbling, while food prices continue to soar.

Growth Energy“Big Food and their Washington lobbyists have been trying to blame the rising cost of food on American ethanol producers and the cost of corn. Well, now that the price of corn has dropped more than fifty percent since the summer, we ask the Big Food industry to explain to the American people why food prices are still so high,” said Jeff Broin, CEO of POET. “The lies the Big Food lobby has been spreading about clean, green biofuels have finally been exposed as an intellectually dishonest smear campaign. It’s wrong and we’re coming together to ask Big Food to give struggling Americans a break.”

The cost of food has increased at the brisk clip of 7.6 percent in the past year, the worst rate in nearly twenty years, and has continued to increase while the cost of corn and other commodities have fallen in the past four months. The Bureau of Labor Statistics reports that the price of basic foods in the United States is currently rising at twice the rate of inflation and is expected to continue to rise in the future. Milk prices increased by 13.3 percent; cheese by 12.5 percent; eggs by 29.9 percent; and bread by 14.7 percent from March 2007 through March 2008. Big Food is sowing profit growth from these higher prices. Kraft’s revenues increased nearly 20 percent from the year-earlier period and saw net income shoot up in the third quarter to $1.4 billion. Sales at Kellogg’s climbed 9.5 percent and third-quarter net income increased to $342 million, up from $305 million the year earlier.

Read Growth Energy’s policy brief here.

Corn Prices Expected to Stay Low

In Ethanol, Farming by Cindy

The honeymoon of high commodity prices looks to be over for the moment, according to Terry Francl, senior economist with the American Farm Bureau Federation.

He says that corn and soybean farmers will likely have to wait until the first of the new year for any rally in prices,

AFBFThe latest USDA World Agricultural Supply and Demand Estimates (WASDE) projects the 2008/2009 season average farm price for corn at $4.00 per bushel to $4.80 per bushel, compared to $4.25 per bushel to $5.25 per bushel in October. “This decline has been driven by the decline in oil prices and concerns about the financial and equity markets,” Francl said.

“Crude oil prices will continue to be a critical factor impacting both corn and soybean prices,” Francl said. “Consequently, the post-harvest seasonal price rally may be somewhat moderate this year. However, as the new year approaches, more competitive bidding for 2009 acreage is expected to boost crop prices.”

The AFBF economist also paints a subdued outlook for the ethanol market in the months ahead. The WASDE November report pegs corn used for ethanol production at 4 billion bushels in 2008/2009. “Although an increasing renewable fuel standard will bolster demand, ethanol plants are going to continue to struggle until crude oil and gasoline prices recover.”

Corn Yield Lower But Still Big

In Farming, government by Cindy

NASSIn the November crop forecast out today, USDA lowered its prediction for corn yields this year by 0.1 bushels from the October forecast, which brings expected production this year to an even 12 billion bushels. That forecast expected to give a little boost to prices as traders were actually expecting to see an increase.

Despite the little drop, this is still on track to be the second highest yield on record, behind 2004, and production will be the second largest behind last year.

Soybean yields were also trimmed in the report and production is now forecast at 2.92 billion bushels.

Google News Alerts For Corn

In Corny News by Chuck

Google News For CornI’m making a guess that most of you use Google. How many of you know about Google News Alerts?

If you don’t then you might consider setting up a personal Google News Alert for the key word, Corn.

As of the writing of this post there are 28,296 results for the word “corn” in a Google News Search. You don’t have to worry about getting all of them when you set up a news alert though.

And just in case you’re interested, there are currently 86,100,000 results for the word “corn” in a regular Google search!

Corn Cob Collection Coming

In Audio, Ethanol by Chuck

Corn CobsVery soon corn cobs will be used for much more than pipes. How about cellulosic ethanol production? That’s what POET, one of the largest producers of of ethanol, has in mind. They had me up to their Project LIBERTY field day in Emmetsburg, IA to see some prototype equipment that many of the ag OEM’s are designing to harvest and collect corn cobs. It’s estimated that harvesting the cobs could add eleven percent to the amount of ethanol an acre of corn can yield. That sure increases efficiency!

Corn CobsI wondered what you would have to do though to harvest, collect and deliver the cobs since you need to separate them from the corn itself. Well, apparently all you need to do is pile it up at the edge of your corn field! Then a company like POET can just come by and pick it up.

They did a lot of research on this and the cobs hold up well just piled out on the field until heading to the plant. POET says it will have their Emmetsburg plant in full corn cob cellulosic production by 2011 so this isn’t far away.

If you’d like to hear more about it then listen to my interview with Jim Sturdevant, Director of Project LIBERTY, here: [audio:]

USDA’s Dorr Resigns

In General, government by Cindy

Lots of people in Washington are looking for new jobs right now and key USDA officials are already starting to move on.

USDA Under Secretary for Rural Development Thomas DorrU.S. Agriculture Secretary Ed Schafer yesterday announced the resignation of Agriculture Under Secretary for Rural Development Thomas Dorr, an Iowa farmer who has been chairman of the USDA Energy Council and served as co-chair of the Federal Biomass Research and Development Board.

“Tom Dorr has been a transformational leader for USDA Rural Development,” Schafer said. “As the transition to a new Administration continues in the months ahead, senior leaders will be moving on, but Under Secretary Dorr’s contributions to USDA and rural America will be felt for many years to come.”

During his time at USDA since 2001, Dorr led the effort to revitalize USDA Rural Development’s Multi-Family Housing Program and to successfully resolve longstanding litigation which threatened the program with potentially billions of dollars in losses. He led USDA’s pathbreaking rural broadband program launch (authorized initially in 2002) which is essential to ensuring universal access to affordable broadband even in low-density rural areas, and he instigated an ongoing initiative to enhance USDA Rural Development’s marketing and outreach efforts and streamline office structure and program delivery systems.

Dorr’s resignation is effective December 1. No word yet on where he will be going.