FAPRI Analyzes Farm Bill

In Ethanol, Farm Bill, Farming by Cindy

The highly anticipated analysis of certain provisions of the new farm bill by the Food and Agricultural Policy Research Institute at the University of Missouri–Columbia, better known as FAPRI, was released this week.

FAPRIThe report provides preliminary analysis of impacts of certain provisions of the 2008 Food, Conservation and Energy Act, including the ACRE program. The report found that, besides ACRE, most of the selected provisions of the law would have only modest impacts on commodity markets, farm program expenditures and consumer food prices.

The ACRE program could have significant effects on producer income and taxpayer costs. On a crop year basis, the program increases net farm program payments by an average of more than $1 billion per year and the potential expenditures are much larger. Given program rules and estimated payments, the ACRE program appears much more likely to appeal to producers of feed grains, wheat and soybeans than to producers of cotton, rice and peanuts. Thus, the program is more likely to be attractive to producers in northern states than in southern states.

The report also looked at the impact of extending the ethanol specific tariff and reducing the ethanol tax credit and found that “extending the $0.54 per gallon specific tariff on ethanol imports for two more years results in lower ethanol imports and slightly higher prices for ethanol and corn. In contrast, reducing the ethanol tax credit to $0.45 per gallon from the current $0.51 per gallon would tend to reduce ethanol and corn producer prices. The tariff effect is slightly larger than the tax credit effect, so average corn and ethanol prices increase slightly.”

Read the entire report here.

Groups Write President to Support Ethanol Tariff

In Ethanol, Legislation by Cindy

Seven commodity and ethanol organizations have written a letter to President Bush in support of the secondary tariff on imported ethanol. The groups called attention to the importance of the tariff for the nation’s growing ethanol industry, as well as to the nation’s energy, economic, and environmental security.

The organizations writing the letter include: National Corn Growers Association, National Farmers Union, National Sorghum Producers, National Association of Wheat Growers, American Coalition for Ethanol (ACE), Ethanol Producers and Consumers (EPAC), and the Renewable Fuels Association (RFA).

“The 54 cent per gallon secondary tariff was enacted by Congress in 1980 to offset any incentive for imported ethanol to benefit from the 54 cent per gallon tax credit for ethanol blended into motor fuel,” the letter said. “This tax credit is taken by refiners who blend ethanol into motor fuel, not ethanol producers. The purpose of the secondary tariff is to protect American taxpayers from subsidizing imports, not to protect domestic ethanol producers.”

The letter points to factors such as oil prices, rising demand, drought, and declining value of the dollar as having more effect on the price of food than biofuels. They urged the President to avoid yielding to the misdirected efforts to blame ethanol for rising prices and to prevent American taxpayers from subsidizing foreign products.

Mandating Flex-Fuel Vehicles is a Good Plan

In E85, Ethanol by Cindy

The idea of a mandate that all vehicles sold in the United States is gaining some traction, mainly due to the efforts of author and aerospace scientist Robert Zubrin and his book “Energy Victory.”

FEW 08 Robert ZubrinZubrin contends that by mandating that all new vehicles sold in the U.S. be flex fuel we would effectively break the economic stranglehold the oil cartel has on the country and the world.

During last month’s Fuel Ethanol Workshop in Nashville, Zubrin made his point by using the analogy of a card game where there is a trump suit that defeats all others and the strategy is for your side to hold most the cards in that trump suit. “It’s the same way in energy,” Zubrin said. “There’s four suits, there’s oil, coal, natural gas and biomass. And right now oil is the trump suit.”

That’s because right now there is mainly one way to power vehicles and that is petroleum products. The key is to change that trump suit, he says, and biomass is the best alternative. The question is how to change the trump suit and Zubrin contends that the answer is to mandate the sale of flex fuel vehicles, which would cost at most $100 per vehicle. “If we had a standard that all new cars sold in this country had to be flex fuel, within three years we’d have 50 million cars on the road in the United States capable of running on alternate fuels,” and Zubrin says that would ultimately result in flex fuel vehicles being sold all over the world.

Others are picking up on Zubrin’s idea on their own, like columnist Clifford May of the National Review Online, and even talk show host Bill O’Reilly. Hopefully, the idea will eventually get to Washington.

Listen to Zubrin’s entire address to the 2008 FEW here and get fired up:

Surprise! OPEC Hates Biofuels

In Current News, Ethanol, International by Ken

Is it a good or bad thing that OPEC (the cartel of Oil and Petroleum Exporting Countries) hates biofuels?

On July 6, OPEC president Chakib Khelil of Algeria was quoted saying that “the intrusion of bioethanol on the market” was responsible for 40 percent of the incrrease in oil prices. The weak U.S. dollar and “geopolitical worries” were responsible for the other 60 percent.

Now, in its World Oil Outlook, OPEC is concerned about “moves in Europe and the United States to cut oil dependence and promote alternatives,” according to a Reuters story.

“Without the confidence that additional demand for oil will emerge, and without reliable market signals, the incentive to invest can be affected,” OPEC Secretary General Abdullah al-Badri wrote in the report. “Just like anyone else, oil producers do not want to invest in a product that will not be used.”

Well, perhaps energy independence and variety in energy sources are a little more important than OPEC’s bottom line and the tendency of some OPEC oil barons to live a little high on the hog.

Ag Productivity Makes RFS Attainable

In Ethanol, Farming by Cindy

A Senate panel heard testimony Thursday that advances in agricultural productivity make the expanded Renewable Fuels Standard an attainable goal.

DuPont Vice President for Applied BioSciences Technology John Pierce told the Senate Environment and Public Works clean air subcommittee that American agriculture has outpaced the oil industry in productivity.

John Pierce“When our Pioneer subsidiary began operations in 1926, corn yields were about 27 bushels per acre and petroleum was relatively cheap – you could buy 3.5 pounds of petroleum for the cost of one pound of corn,” Pierce’s testimony reads. “Today, corn yields in the US average about 150 bushels per acre. Corn, at $7 per bushel, is 3.5 times cheaper than petroleum, instead of being 3.5 times more expensive as it was in 1926 – a remarkable testament to agricultural productivity.”

Pierce says the expanded RFS, which increases the amount of renewable fuels required up to 36 billion gallons by 2022 – 16 billion of that from biomass – is attainable both in terms of corn ethanol and cellulosic. “In fact, there are multiple technology developers intending to produce cellulosic ethanol in pilot or demonstration quantities from a range of feedstocks over the next 24 months. The economics and carbon performance of grain ethanol continues to improve as well, as does agricultural productivity and sustainability in the US. These trends suggest that while the RFS targets are aggressive, as they should be, they are not out of reach.”

Read Pierce’s full testimony here.

Twin Turkeys Sighted

In Ethanol, Farming, Livestock, State Groups by Cindy

Amazingly, two turkey farmers in different parts of the country have the exact same views about ethanol, using the exact same words in editorials to different newspapers.

The first appeared in the Harrisonburg Virginia “Daily News Record” on June 16, written by James L. Mason, a turkey farmer from Rockingham County. The second was “written” by Peter Rothfork of central Minnesota and appeared in the Minneapolis Star-Tribune on July 8.

Twin TurkeysBoth start exactly the same way:
Over the past few months, a debate has begun about whether it’s a good idea for Congress to force America to turn over one-third of our nation’s corn into ethanol. It’s about time.

Instead of engaging in this debate, however, some who support the current policy have decided to make it personal, claiming that those who want to take a second look at ethanol are out to get the American farmer. In a nation that deeply respects farmers, those are fighting words — and I know them to be false. I believe we should rethink our ethanol policy, and I am a farmer.

They then add personal information about their individual operations. After that, the letters are nearly identical.

The Minnesota Corn Growers pointed out the similarities to Minnesota TV station wanting to cover the story. When confronted on camera by the reporter, Rothfork admitted that he “had help with the article by Sherrie Rosenblatt,” public relations vice president for the National Turkey Federation. He said the ideas and thoughts in the editorial are his own, “She helped me craft the words.”

“There are a couple of thing that set this apart from the usual ‘that’s just PR flaks doing their job’ scenario,” says Mark Hamerlinck, communications director for the Minnesota Corn Growers. “First, these are not simply letters to the editor that were generated by a letter writing campaign – in the case of the Star Tribune, this piece took up a third of their op-ed page. And, had the opinion piece been on another subject (say, the economic and security benefits of ethanol) you can bet they wouldn’t have touched it had they known it was published a month before in another paper under another name.” Hamerlinck gives the KARE11 television reporter credit for asking the turkey farmer about the obvious editorial similarities.

Corn and ethanol industry representatives are urged to keep an eye out for similar turkey sightings in their own areas and use their own ammunition to shoot back.

Growing Green With DDGs

In Ethanol by Cindy

A by-product of ethanol production could feed plants as well as livestock.

potted plantA team of USDA ARS researchers have found that dried distillers grains, better known as DDGS, could be useful as a weed deterrent on potted ornamentals. The study results, published in the February 2008 issue of HortScience, found that applying DDGS in the soil of potted plants could reduce the amount of hand-weeding typically required.

The researchers say the findings could be a win/win for ethanol producers and the agriculture industry and could increase the profitability of ethanol production.

Read the report here.

Minnesota Corn Growers Host Ethanol Challenge

In Ethanol, Events, State Groups by Cindy

The 4th annual Governor’s Ethanol Challenge, sponsored by the Minnesota Corn Growers Association is being held this week.

MN Corn“The Corn Growers will be out there talking to the fans and promoting ethanol,” said Chad Willis, who farms near Willmar and serves as treasurer for the Minnesota Corn Research & Promotion Council. “We’ll have volunteers from local corn organizations in Kandiyohi, Pope, Chippewa, Lac Qui Parle and Yellow Medicine Counties who will come to the events to sell commemorative t-shirts. We’ll also have MCGA regional representatives and folks from the American Lung Association of Minnesota out to help talk about the economic and environmental benefits of ethanol.” The event will also feature an ethanol trivia contest with commemorative t-shirts for prizes.

The four races will draw together a score of “Midwest Modified” class drivers and vehicles running on E-98, a performance fuel with octane topping 105.

The races will be held July 8 at Viking Speedway in Alexandria; July 9 at Madison Speedway in Madison; July 10 at KRA Speedway in Willmar; and July 11 at Fiesta City Speedway, Montevideo.

Team Ethanol Victory

In Ethanol by Cindy

Team Ethanol VictoryIt was an all-American victory Sunday as Team Ethanol scored its first IndyCar Series win on Independence Day weekend at the Camping World Grand Prix in Watkins Glen, NY.

For Rahal Letterman team driver Ryan Hunter-Reay, it was a dream come true.

“American kid winning with ethanol on the side of the car,” Ryan said after the race. “It’s an American team – Bobby Rahal gave me the job and now we’re in Victory Circle.”

It was also an all-American dream come true for corn growers and the ethanol industry, since this is the second year the IndyCar Series has run on 100 percent ethanol.

Happy Energy Independence Day

In Ethanol, Farming by Cindy

By producing a few billion gallons more ethanol and using a little bit less fuel on the road, America could be energy independent through the Fourth of July every year.

oil energy graphicOver 35 biofuels, agricultural and environmental organizations are calling attention to the idea that America is on the road to energy independence. A joint statement from the groups points out that America could effectively supply its own transportation fuel needs for 186 days in 2009 — equivalent to January 1 through July 4 — meaning that imports would be needed for less than half the year. That can be achieved if each person would conserve just 21 gallons of fuel in the coming year and if we would increase ethanol production by about five billion more gallons.

The groups are calling for unity to achieve this goal. “To find true and long-lasting sustainable solutions, corporate self interests, political polarization, and agendas must be set aside. We must band together in the fight for Energy Independence here in the United States and around the globe.”

Among the many groups supporting Energy Independence Day are the National Corn Growers Association, Ethanol Promotion and Information Council, Renewable Fuels Association, Renewable Fuels Now, National Farmers Union, National Sorghum Producers, National Wheat Growers Association, and the National Ethanol Vehicle Coalition.

Read more about it here.