The Export Exchange 2010 is taking place in Chicago, IL. This event brings in international buyers and U.S. suppliers of DDGS and coarse grains. The attendance has met if not exceeded expectations. There are nearly 500 attendees, with about 180 of them coming from another country and there are 33 countries represented.
On hand is the President/CEO of the National Corn Growers Association, Rick Tolman. I asked Rick what he thought about the conference and its importance to the industry. Rick says it’s critically important and that the DDGS export market is one of the bright spots in the industry.
“Deepening pain and unrest in Cuba are provoking bold actions that the U.S. government should note,” according to an editorial in the St. Louis Post Dispatch today. After decades of economic stagnation even Fidel Castro recently noted “the Cuban model doesn’t work anymore.”
What spurred Castro’s comment and the editorial is the dramatic change taking place 90 miles from our shore. After decades of economic erosion the worldwide recession is ravaging Cuba, an island nation of 11 million people who largely are dependent on imported food and many other products.
As the editorial points out the Cuban economy has been faltering since the since the Soviet Axis collapsed in 1991 and withdrew its economic support that had become so ingrained in Cuban politics and culture. Cuba lacks a modern manufacturing infrastructure today but what they do seem to have is a growing awareness that they will need to seek foreign investment and outside sources of private capital if they are to bounce back.
The Post rightfully points out the ripe opportunity that presents itself to improve our relationships with one our nearest neighbors. After 58 years of nothing but acid-based rhetoric being the only commodity traversing the Carribean Sea, it is time to regroup and reconsider our relationship with Cuba.
Politics come in many shades and flavors but human nature is not so different. Many Cubans struggle to get enough to eat, so like new neighbors (or at least reformed one’s) let’s reach out with the hand of friendship.
It might produce some positive results, especially if that hand contains the aforementioned food they need. We have the opportunity and the means but do we have the will to do what is right?
In our recent series discussing ethanol a lot of the information has been more philosophical in nature and has focused on some of the critics and their motivations. The idea was to get you thinking in a skeptical way rather than beat you up with statistics. That ends with this installment which will discuss petroleum. (Skip to the end for the stats).
Black Gold, Texas Tea, or carbon crack…at the end of the day there is a reason they call it crude. Even in its refined form it remains crude. This stew of dead, decayed plants and animals we call oil is nothing but another anachronistic fossil fuel that is little removed from cavemen rubbing sticks to keep us warm.
We may have become highly technical and efficient in finding oil and getting it out of the ground but the final product remains, well…crude.
Over the years more than 200 ingredients have been put in gasoline to try to make it burn better, make your engine knock less, and sometimes just because it was a convenient way to make unpleasant chemical waste products from the petroleum industry disappear out your exhaust pipe.
And all of us gonzo gas mavens would ignore the obvious imperfections and hideous social costs because it was abundant, cheap and made our powered toys sing. Cars, boats, motorcycles, weed-whackers, generators, power washers, etc…..Yikes, the list does go on.
Today, I would gladly trade in my heated seats, directional headlights, and GPS for a modern fuel (hopefully domestic) and new engine technology that moves us away from the oil-fed internal combustion dinosaurs we depend on today.
If we can have cell phone technology that changes daily, digital television technology sharper than the human eye can even see, and tractors that steer themselves we surly should be able to market a functional, fuel efficient and more environmentally friendly car that runs on a cleaner, renewable fuel source. (more…)
A recent study attempted to make the case that if the U.S. government allowed the ethanol tax credit to expire it would have very few adverse consequences for the U.S. industry. The fact the study was funded by the Brazilian sugarcane ethanol industry was dutifully avoided.
Anti-ethanol folks, who have been receiving a lot of attention on this blog of late, made sure the study got plenty of media splash because it helped them further their own causes. Interesting they didn’t showcase the source of the funding for the study or point out how badly Brazil’s sugarcane ethanol industry lusts after access to the world’s largest ethanol market…the USA.
And in today’s budget conscious environment in Washington, DC their efforts are getting some traction. The direct cost of the ethanol incentives is being reviewed independently without any comparative assessment to savings in farm bill costs, how much we spend militarily on protecting our petroleum shipping lanes, or the economic fallout from depending on foreign oil. Federal tax revenue generated by the production and use of U.S. ethanol totaled more than $8 billion in 2009, $3 billion more than the value of the tax credit.
It is amazing how quickly some of our elected officials have forgotten the core rationale for putting the US ethanol tax credit in place. President Ronald Reagan, who was not exactly a political Dove, regularly noted it is in America’s best interest to reduce the world’s dependency on oil from unstable regions of the world.
That’s why Reagan and virtually every president since has asked domestic alternative energy producers like ethanol to step up. He also noted the expense related to America’s foreign oil addiction and how helpful bringing these energy jobs and the billions of dollars ($1 billion day) we send overseas could be for the U.S. economy.
Despite this clarion call the aforementioned detractors, which mysteriously enough include some environmental groups, like to preach the benefits of sugarcane ethanol; sometimes called “slash-and burn ethanol.”(See attached photo). It’s even more amazing some U.S. regulatory agencies actually tout Brazilian ethanol as an “advanced biofuel over the American made corn product. In case you were wondering the photo shows a burning cane field in Brazil. The Sao Paulo area alone burns 8,000 sq miles of field producing incredible amounts of volatile compounds and particulates.
To make harvesting easier, which reduces manual labor costs, sugarcane fields are burned prior to harvest to remove the plants’ leaves. Considering the near slave labor conditions in some cane fields I guess this burning might seem a gift for the machete wielding masses, despite the obvious environmental costs of the massive burning.
If critics are truly concerned about our fuel needs and specific environmental and economic consequences consider the following:
Data from the Brazilian sugar organizations clearly shows they are planning, by 2020, to export 63% more sugar and export 336% more ethanol – all at the expense of increasing the land area required for sugarcane by 78%. Corn based ethanol is being provided with increased corn yields on the same acreage and using modern production processes throughout the production chain.
Sugarcane ethanol provides primarily ethanol, with some electircal cogeneration. Corn based ethanol provides ethanol, high protein feed for livestock, corn oil, and even captured CO2 from the fermentation process to carbonate soft drinks.
Sugarcane ethanol provides jobs that don’t meet subsistence level incomes, while jobs in the ethanol production chain are highly skilled jobs that provide long term employment and taxable income for local schools etc…
And the next time you want to get on a soapbox promoting sugarcane ethanol consider the following items below which are being ignored to make Brazilian product look better than it is:
Ignoring direct and indirect emissions from crop residues;
Use of inappropriately low fertilizer rates;
Failure to account for energy inputs for dehydration of hydrous ethanol;
Failure to accurately assess transport of ethanol from Brazil to U.S.
Failure to assess actual cane harvesting practices and processing in Brazil
At the end of the day if the U.S. ends up importing more ethanol, then we will once again lose a domestic growth industry, export American jobs, and become dependent on foreign energy producers.
A recent initiative in one of South America’s largest agricultural areas shows deforestation is not being driven by expanding soybean acres. The findings of the GTS Soy Work Group show that less than ¼ of 1 percent of land use change over the 3 year time frame studied was due to additional soybean acres.
From a corn grower perspective the GTS info is more than a little interesting because ethanol critics often argue increased ethanol production drives demand for U.S. corn, reduces U.S. soybean acres, and thus opens the door for more soybean acres – and more deforestation – in South America.
The tactic has always been a bit suspect because the vast majority of new corn demand is being filled through burgeoning yields on existing U.S. acres. Even more interesting is this convoluted logic is now being drawn into serious doubt by an effort that uses real-world data rather than speculation and hyperbole.
The industry-led project in the Brazilian Amazon, now in its third years shows land clearing for cattle remains a much bigger contributor to than diversion than expanding soy production.
GTS, a coalition that includes their Ministry of the Environment, NGOs, exporters and civil society organizations, uses a combination of state of the art satellite technology and on-the-ground shoe leather assessment to gauge deforestation and any relationship to crops, specifically soy planting.
A company called Globalsat conducted flyovers and field visits in Brazil’s Mato Grosso, Para, and Rondonia part of the Amazon Biome and the virtual epicenter of Brazilian soybean production.
Ethanol bashers seem to be remarkably mum on this revelation. Hmmm
The Corn Utilization and Technology Conference has international participants. We have quite a few from China. I had an opportunity to speak with Li Bin, CEO, Xin Jiang Tianda Biotechnology Co., Ltd., pictured here with Linyi Li, Novozymes China, my interpreter. Thank you Linyi!
I asked him what stimulated his interest in participating. He says that corn utilization in China is one of the largest in the world and he wanted this chance to see what kind of products and technology we have. He is impressed with the organization and diversity of information provided here. He was very interested in how ethanol and production by-products like DDGs have developed here in the United States since they have not progressed to that point in China yet.
First, they took over the IndyCar Series, after the U.S. ethanol industry worked hard to get the series to switch to 100 percent ethanol - now Brazil wants to take over our domestic ethanol market that has taken decades to develop to lessen our own dependence on foreign sources of energy. They’ve even adopted the “e” logo developed by the U.S. industry!
The Brazilian Sugarcane Industry Association (UNICA) is taking their promotion of imported sugarcane ethanol to Washington DC next week by offering a 54 cent per gallon discount on gasoline the Tuesday before Memorial Day at two Capitol Hill gas stations to draw attention to a 54 cents per gallon tariff on imported ethanol.
“The one-day discount will provide Washington area residents with a preview of how Americans across the country could save money at the pump if Congress ends this unfair import tax later this year,” reads the UNICA release on the promotion.
Sugarcane ethanol has already gotten a boost from California‘s contested low carbon fuel standard (LCFS) which seems to give it an advantage over corn-based ethanol. UNICA is also using the Environmental Protection Agency’s (EPA) designation of sugarcane ethanol as an “advanced renewable fuel” to promote their product.
With exports of U.S. corn ethanol on the increase and the ethanol tax incentive with the associated tariff on imports set to expire at the end of the year, the very real possibility exists that we could end up exporting our domestic fuel and importing foreign ethanol. That would kind of defeat the whole “energy independence” goal, doncha think?
Brazil has done a tremendous job of decreasing their own reliance on foreign sources of energy. As Growth Energy CEO Tom Buis puts it, “The only thing we should be importing from Brazil is their resolve to become energy independent.”
The U.S. ethanol industry needs to take a cue from Brazil and become even more aggressive in promoting home-grown fuel. We have built a market here at home, we need to keep it.
Haiti is the poorest country in the Western Hemisphere and today nearly 2.4 million Haitians still lack adequate access to food five months after the earthquake. The need for food is desperate.
To help, Monsanto is donating $4 million worth of seeds to the country. “The Haitian Ministry of Agriculture approved a donation from U.S.-based Monsanto Company to Haitian farmers of $4 million worth of conventional hybrid corn and vegetable seeds to be made over the next 12 months in support of reconstruction efforts.” Monsanto made the specific point that no GMO seeds would be included in the donation because, according to Business Week, “The announcement raised concerns in Haiti that the donation would include genetically modified seeds, for which the country does not have a regulatory system.”
Appreciating this potential means recognizing that genetic engineering can be used not just to modify major commodity crops in the West, but also to improve a much wider range of crops that can be grown in difficult conditions throughout the world.
Doing that also requires opponents to realize that by demonizing the technology, they’ve hindered applications of genetic engineering that could save lives and protect the environment.
Scientists at nonprofit institutions have been working for more than two decades to genetically engineer seeds that could benefit farmers struggling with ever-pervasive dry spells and old and novel pests. Drought-tolerant cassava, insect-resistant cowpeas, fungus-resistant bananas, virus-resistant sweet potatoes and high-yielding pearl millet are just a few examples of genetically engineered foods that could improve the lives of the poor around the globe.
It’s wonderful that Monsanto is able to donate seed to people who are in desperate need to help them feed themselves and get their country back to productivity, and it’s great that the hybrids they are donating are high yielding and certainly high quality. But it’s kind of sad that they were not able to donate the very best they could offer in genetically-modified crops that could potentially speed up the recovery process. I find it disturbing that it sounds like they were unable to donate GMO seeds because Haiti has no “regulatory system” for that. To require a regulatory system makes GMO seeds sound like a dangerous substance that needs to be controlled.
Last month’s National Research Council report noted the GMO crops have done no harm to human health and have actually been beneficial for the environment. Yet, as the NYT op-ed points out, opposition to the technology has created an expensive regulatory system that is keeping it out of the hands of the very people who could benefit from it the most - the poorest and most vulnerable. Hopefully, with continued understanding and the growing population, that will change and everyone will have access to the best technology to grow the best food for their needs.
Gluttonous profits: it cost the Saudis a bit less than one dollar to suck a barrel’s worth of oil from the ground. So, at $80 per barrel they make a profit of more than 8,000%.
Marc J. Rauch, Exec. Vice President/Co-Publisher of THE AUTO CHANNEL doesn’t just smell a rat regarding the recent bashing of biofuels like ethanol, but rather felt like he tripped over a big fat alley dweller called big oil.
The headline on his latest column says it all – “Not Satisfied with Gluttonous Profits and Environmental Catastrophe, the Oil Industry Works Overtime to Malign Alternative Fuels.”
Rauch takes a look at just one example of how large petroleum interests are trying to discredit the great advances in supply and efficiency being experienced by U.S. ethanol producers. Their current target is the effort to increase the amount of ethanol being blended in gasoline from 10% to 15% per gallon.
Specifically he takes exception to the information – which looks amazingly like unsubstantiated propaganda – being posted and promoted at www.energytribune.com.
The bogus “news” entity’s latest gambit says the auto industry is urging the EPA to delay allowing E15 without naming a single company or a single individual. Some folks at GM and Ford might be disturbed to hear this revelation given the years and billions of dollars they have spent developing and promoting ethanol use and infrastructure.
“The story also did not say what tests were done, to which vehicles, when, and by whom. Nor did it say what kind of damage was sustained. There was no supportive data or information of any kind. The story was merely one large bogus threat sound bite designed to denigrate a viable alternative fuel versus gasoline’s dominance,” Rauch writes, adding “If oil industry lackeys can convince enough people that there is no viable alternative to gasoline then we are left to believe that catastrophes such as oil spills and oil-induced wars are necessary evils that we just have to accept.”
In the category of strange but true, on the same day another news article says the Arab world need $144 billion to invest in meeting future food needs. In a Bloomberg/BusinessWeek article Tareq al- Zadjali, director general of the Arab Organization for Agriculture Development, is quoted as saying, “Arab countries need to invest $144 billion in agriculture between now and 2030 to meet the demand for food for their growing populations.”
So, if we need oil and they need food can good old fashioned bartering be far behind? Maybe farmers should hold out for 8,000 percent return on their investment?
The U.S. Grains Council just held it’s International Marketing Conference and the keynote speaker was the Hon. Carole L. Brookins, Managing Director of Public Capital Advisors, LLC.
Her topic was “Growing Grain Markets in a (Sustainable) Brave New World.”
“We are moving into a new era of focus on global public goods, including money, trade, climate and environment. With that come global threats: cyber terrorism, fragmented political and economic power, radical groups seeking to control weapons of mass destruction and piracy on the high seas,” she said.
Brookins identified four trends shaping our world today. First – a re-balancing of global wealth and power. “There are shifts in global economic leadership, which creates a wider competition to maintain and grow market share,” said Brookins. Second – a revolution in energy supply and markets. According to Brookins, this is fueled by climate change, resource depletion, energy security and technological innovation. Third – a rebellion against the modern food system. “Activist groups attack the safety and value of the modern food production system,” she said. Fourth – a resurgence of investment in commodities and agriculture. According to Brookins, this will be stimulated through investments, control of the supply chain and economic power.
“Experience shows that sustainable global food security will depend on intensive, large scale agriculture and expanding global trade,” Brookins said. “Both your risks and reward will be multiplied. Your complexity of choices and competition will be magnified. The brand of the Council is highly respected around the world. Renew your mission in 2010 and lead out in a growing, dynamic world of 9 billion lives over the next 50 years. I look forward to watching.”