Corn Commentary

President Reaffirms Support for Biofuels

obama poetStanding next to a front end loader filled with corn at an ethanol plant in Macon, Missouri on Wednesday, President Obama stressed his administration’s goal to more than triple America’s biofuels production in the next twelve years, and noted that “there shouldn’t be any doubt that renewable, homegrown fuels are a key part of our strategy for a clean energy future.”

Missouri Corn Growers Association CEO Gary Marshall was thrilled that the president visited a corn-based ethanol plant in his state. “It’s fantastic, primarily because it is the first time since he’s been sitting as president that he’s toured an ethanol plant, so I think it bodes very well for future of the corn-based ethanol industry in this country,” Gary said in an interview with Agwired’s Chuck Zimmerman. “This symbolic visit to a corn-based Midwest ethanol plant could really drive a lot of the issues we’re working on at the national level. Whether it’s re-doing the tax credits for ethanol, whether it’s E15 which we think we need to go to because we’re maxed out on the blend wall, or even moving corn-based ethanol forward as an advance biofuel. This just kind of kicks off that entire effort for us.”

Listen to Chuck’s interview with Gary here.

Watch the president’s speech here and see photos from the event in this Flickr photo album, courtesy of Agwired.

Farmers Take us to School on the Environment


The Natural Resources Conservation Service (NRCS) has just released its latest National Resources Inventory.  The document is a report card of sorts that gives us a look at how we are doing in regard to managing and caring for non-public lands including farms and ranches.

According to farm leaders like Bob Stallman if you look at the NRI environmental report in conjunction with USDA’s productivity figures you get a compelling picture of an American success story. The shrinking environmental footprint of farmers who produce our food and fiber is remarkable, and even more so when you look at the accompanying increases in productivity.

The latest data basically gives farmer documentation for what we already knew…growers are doing more with less; Less land, less water, less crop inputs from pesticides to fertilizer, and all the while getting gonzo increases in productivity of crops like corn.

This was the very reason corn growers created the Corn Farmers Coalition (CFC) last year; to bridge the large gap between what consumers don’t know or think they know and the reality of modern, innovative farming. In the case of CFC the idea was to start small by educating decision leaders in Washington, DC because of the enormous impact Congress and other federal agencies can have on farmers either legislatively or through regulation.

It is sad how few people outside of farming understand this achievement. In fact some very vocal elitist minorities in our society want us to divert from the progress-lined path that has made U.S. agriculture such a marvel. The good news is the start made by CFC is now part of a larger fabric of educational efforts underway from Monsanto’s Thank a Farmer to The Hand That Feeds Us campaign.

Today’s farm families are making a difference in one of the most fundamental and important professions on the planet…growing crops to convert the sun’s energy to calories. Including calories for food to sustain our bodies, calories to feed livestock, calories like ethanol to drive our cars, and the list goes on.

Now NRCS gives us a well-deserved “A” on our environmental report card. This is a story worth telling, especially given the misleading information being spewed by some agenda driven groups. So, look for opportunities to speak up for your farm; Do it locally, tell your story online through social media, tell your elected officials. We all have a vested interest in getting this right.

“Ugly Baby” is Worth Investment

You may remember a couple of years ago when oil tycoon T. Boone Pickens called ethanol an “ugly baby.” His quote was that ethanol may be “an ugly baby but it’s ours and it will move cars” and he preferred the “less-than-perfect fuel” over imported oil.

pickensLast week, Pickens testified on behalf of continued tax incentives for domestically-produced renewable energy, including ethanol, during a House Ways and Means committee hearing. “When do we stop investing in OPEC and start investing in America?” he asked the lawmakers. When it comes to energy, he says, “I’m for anything that’s American” including wind, coal, solar, hydro, nuclear, geo-thermal, ethanol, propane, or natural gas.

The straight-talking Texan and chairman of BP Capital Management addressed those who discourage tax incentives for renewable energy on the basis of letting the free market work. “If you think OPEC is a free market, you’re a sap,” he said.

Pickens strongly stressed the need for America to develop an energy plan now. “I’m running out of time, I’m 82 years old next month, and I’ve got to get an energy plan fixed for America because we cannot leave this to generations in the future,” noting his 13 children and grandchildren.

Watch Pickens opening statement here from YouTube:

Ethanol Blend Wall is Dead Ahead

The ethanol industry is speeding toward the blend wall with a heavy foot on the accelerator and only quick action by the federal government will help it break through.

The industry continues to prove that it can produce record volumes of ethanol and still meet the demands of livestock producers and the export market. The U.S. ethanol industry began 2010 with yet another month of record production. The latest report from the Energy Information Administration (EIA) puts January 2010 ethanol production at an average of more than 818,000 barrels per day, compared to 188,000 in January 2009.

That makes four months in a row of record ethanol production, but gasoline demand remains flat and ethanol stocks are increasing. Returns for ethanol producers are down as prices have dropped sharply. USDA’s latest supply-demand report out Friday left projected 2009-10 corn use for ethanol unchanged at 4.3 million bushels but lowered corn feed and residual use by 100 million bushels lower as March 1 stocks and the record January ethanol production indicate lower-than-expected December-February feed and residual disappearance. The report notes that poor margins for ethanol producers and rising ethanol stocks may limit near-term growth in production.

That means that the future for ethanol literally hinges on the decision EPA has yet to make - moving the allowable blend level for ethanol in gasoline up to 15 percent from the current 10. “Given the fact that gasoline consumption in this country simply is not growing very rapidly and has essentially been flat for some time now, we are getting to the point where we simply have absorbed as much ethanol as we can under the current E10 legislation,” said USDA Outlook Board Gerry Bange

Renewable Fuels Association President Bob Dinneen says the “antiquated” E10 regulations need to be changed to allow the increased use of ethanol and ethanol blends. “The increase seen in ethanol reserves during a time of great economic advantage in ethanol pricing speaks directly to the need for EPA to allow up to 15% ethanol blends for all vehicles, regardless of model year,” said Dinneen.

The EPA has delayed its final decision on the matter until some time this summer. Let’s hope they make it before we hit the wall.

NY Senator Needs Corn Ethanol Education

U.S. Senator Chuck Schumer (NY-D) apparently supports biodiesel production in his state, but not corn ethanol.

The senator visited New York’s only commercial biodiesel producer last month to show his love and assure them of his support for the federal tax incentive for biodiesel. However, in a recent Morning Comments subscription email, Informa Economics reports that Schumer has no such love for corn ethanol. In a letter to a constituent, the senator said that “corn ethanol provides no environmental, economic, or security benefit over petroleum, and it raises serious ethical concerns about our obligations towards our neighbors.” At the same time, Schumer does support the development of cellulosic ethanol, saying production does “have the potential to protect the environment and reduce America’s dependence on foreign oil, without putting strains on American agriculture or other countries’ food supplies.”

Schumer’s letter prompted officials with Western New York Energy (WNYE) to write him a letter and set the record on corn ethanol straight.

“Rather than pointing out the inconsistency in your ethanol and biodiesel positions, we wanted to take this opportunity to provide you with more current information about America’s ethanol industry in the hopes that you will revisit your position,” wrote plant owners John and Michael Sawyer, who proceeded to do just that by disputing the senator’s opinions on the fuel. “The justifiable reasons you state for supporting biodiesel and next generation ethanol technologies are the same reasons that should compel you to support existing ethanol producers, including those in your home state of New York,” they concluded. (Read the entire letter here.)

They are planning to contact the senator’s office to set up a tour of their 55 million gallon per year plant located in Medina, NY which was the first ethanol plant built in the northeast United States. The plant uses some 20 million bushels of corn each year.

Governor Faces Fall Out from Michigan Meatout

The manure really hit the fan in the office of Michigan Governor Jennifer Granholm today as media reports picked up on protests over the governor’s proclamation of Michigan Meatout Day. While the governor herself has not commented on the situation, explanations from her press secretary did not improve the situation with agriculture interests.

According to spokesperson Liz Boyd, “We did not see the proclamation as belittling” to farmers, hunters or meat-eaters. Seriously? Boyd explained that the governor receives so many requests to make proclamations that she tries to accommodate as many as she can. This one came from the Michigan director of the Great American Meatout. I wonder what she would say to a request from Michigan Right to Life for a Celebrate Life Day in the state - I’m guessing it would be rejected without even serious consideration.

The backlash over the proclamation has come fast and furious throughout the day, from being blasted by the Michigan Agri-Business Association and Farm Bureau, to the state senate now calling on the governor to rescind the proclamation.

In response, the governor’s office hastily put together a proclamation making March 20 Michigan Agriculture Day, to recognize all of agriculture in the state, including meat - a proclamation that totally contradicts Meatout Day.

“I urge all Michiganians to join me in recognizing the importance of our agricultural industry, from farm to fork, and to help celebrate this day with meals made with a variety of local Michigan ingredients, including but not limited to meat, vegetables, and dairy products.”

It seems that the governor and her staff were honestly shocked by the reaction they received regarding the proclamation, but I find that incredibly hard to believe. Hopefully, they will think twice about it in the future.

Secretary Vilsack at Commodity Classic

Trade and rural revitalization were the key topics that Agriculture Secretary Tom Vilsack addressed in his the keynote speech at the 2010 Commodity Classic on Friday - but at the press conference it was anything goes.

Tom VilsackDuring his speech, Vilsack talked about the importance of biotechnology and biofuels, especially stressing the economic impact projected for 2022 if we meet the Renewable Fuel Standard. “190,000 people will be employed in the biofuels industry and if you leverage all the indirect jobs it will be closer to 807,000 jobs,” Vilsack said. In addition, $95 billion will be invested in the expansion of the biofuels industry over the next 12 years. “Most importantly, it will prevent us from having to import $350 billion of foreign oil,” he added.

Listen to Vilsack’s speech here:
Download speech from this link: Vilsack Commodity Classic Speech

The speech was fine, but the Secretary’s press conference was much more interesting. In fact, it was the longest and most candid press conference I have seen with him yet. Questions ranged from Toyota versus US beef, to calling USDA the Department of Food, to whether E15 will be approved.

Last week, the EPA announced a delay in the decision on increasing the blend level to E15 until the end of the summer. Vilsack commented that the purpose of the delay is due to ongoing testing by the Department of Energy to determine what engines can use the higher blend without ill effects. It has already been established that newer vehicles, and all flex-fuel vehicles can use the higher blend safely, “Which suggests to me that we’re going to see an increase in the blend rate,” said Vilsack. He then noted that it will be important to use rural development resources to make sure the distribution systems create the opportunities for people to use higher blends.

Listen to Vilsack’s comments about E15 here:
Download his comments with this link: Vilsack comments on E15

Commodity Classic Photo Album

Regulating with Inherent Uncertainty

The new rule for the expanded Renewable Fuel Standard, or RFS2, represents the first time the federal government has ever had to develop regulations based on the unproven theory of international indirect land use change. This is kind of like trying to make a recipe without knowing the ingredients.

EPA’s Transportation and Regional Programs Division Director Sarah Dunham talked about how they did that during a presentation at the National Ethanol Conference this week.

She said that having to incorporate indirect land use change into the rule “contributed to the evolution of the science in this year. There’s no question the science evolved significantly over the last year through this process and will continue to evolve going forward.” However, she added, “Just because we issued a final rule doesn’t mean that it’s done, it’s just the first step in moving forward with this.”

In other words, they’re not sure whether this first recipe they have put together will be a cake or a mistake. It still needs more testing in the kitchen because of what they call “inherent uncertainty.”

“There is inherent uncertainty in these assessments,” Dunham said. “And we thought it was important to try to formally recognize that uncertainty” and incorporate it into the analysis. The National Academy of Sciences has been asked to do a review of the whole lifecycle assessment and indirect land use change component and report back in two years.

I would call this inherent insanity. Why in the world would our federal government try to regulate something based on a half-baked theory and uncertain projections? It makes no sense at all. It would make much more sense to throw out the entire indirect land use change modeling effort until the science is fully evolved, not just partially.

Listen to Dunham’s presentation here:

Hold Your Breath

It’s official now. Humans beings are polluting the planet just by exhaling.

The U.S. Environmental Protection Agency this week officially declared carbon dioxide, the stuff we exhale, as one of six greenhouse gases that “threaten the public health and welfare of the American people.”

According to EPA, on-road vehicles contribute more than 23 percent of total U.S. GHG emissions, but how much do humans contribute? From what I can figure - and correct me if I am wrong - there are 305 million people in the United States who exhale an average of 12 times per minute. There is approximately .037 grams of CO2 in each exhalation, which means we breathe out about 135 million grams of CO2 into the atmosphere EVERY MINUTE. That seems like a lot to me. Adding in the entire world population of nearly seven billion people (since everyone breathes, but not everyone drives a car) it’s up to about 3 billion grams per minute, if my math is right. So, I figure that if we would just exhale less, we could save the planet.

Seriously, the EPA conclusion could have serious ramifications for agriculture. The National Corn Growers Association (NCGA) has serious concerns with the implications regulating GHG emissions could have for America’s corn farmers and the livestock industry. The American Farm Bureau Federation released a statement saying that EPA’s decision “could carry severe consequences for America’s farmers and ranchers.”

Despite the so-called “Climate gate” emails that have raised questions in the last couple of weeks about the manipulation of scientific data with regard to global warming caused by GHG emissions, EPA states that, “Scientific consensus shows that as a result of human activities, GHG concentrations in the atmosphere are at record high levels and data shows that the Earth has been warming over the past 100 years, with the steepest increase in warming in recent decades.”

You would think that would cause world leaders and our own government to at least want to take a second look at the whole issue to see if there really is a major cause for concern.

You would think, but then again - don’t hold your breath waiting for it to happen.

Ethanol Supporters Should Be Outraged Over IEA Sleight Of Hand

big oil, business week coverApparently, last week’s International Energy Agency (IEA) numbers regarding future oil supplies were fudged to protect the innocent or at least our frail economic recovery. According to a whistleblower who whispered in the ear of The Guardian, the world is much closer to running out of oil that we think.

 So, what is to be gained or lost by such skullduggery? Stockbrokers, bankers and oil investors jumping out of windows…sure, but what is the downside? (Insert sarcasm here).

 The comments in the UK’s respected Guardian stated that the IEA has inflated its 2009 report of oil reserves for fear that the truth would shock world markets into a reactionary panic. IEA is alleged to have put its role as an industry watchdog in the kennel for the time being to fend off a potential buying panic…even at the risk of being exposed for overplaying supplies and chances for finding increased reserves.

  On face value this might seem to be based on at least a modicum of twisted logic, but what are the ramifications for world governments who govern, plan and even invest based on IEA’s data? Consider that they also develop their own energy policies based on such essential information.

According to the Guardian’s high-level IEA source, estimates of global oil production growing from its current level of 83 million barrels per day to 105 million barrels per day are as bogus as the Tooth Fairy. The source said many IEA officials believe even 90 million barrels per day is unreachable, but the agency will not lower its forecast because it fears panic could spread through financial markets.

If we have indeed entered the “Peak Oil Zone” (that strange and unfamiliar place where we actually feel the pressure to get real about “energy policy” not oil policy) then it is time to fess up like an alcoholic at an AA meeting. “Hi my name is Joe Consumer and I have a petroleum problem.” (more…)

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