White Paper Released on Farm Income and the RFS

Leaders of the National Corn Growers Association (NCGA) and the National Farmers Union (NFU) jointly released a new white paper Thursday on how the EPA’s proposed rule for the Renewable Fuel Standard (RFS) is threatening farm income and rural economies across the United States.

ncga-smallerThe paper cites the latest USDA data on net cash income for American farmers and ranchers, which is forecast to decline by 26 percent in 2015 from peak levels in 2013, as proof that the EPA proposal is impacting the farm economy. “That devastating forecast is worse than originally projected, and it represents the lowest farm income levels in nearly a decade, and it could get worse,” says the paper.

“There are factors other than the RFS,” said NCGA president Chip Bowling of Maryland. “(But) it has changed the basis, the price received for our corn, it has changed the way we’re buying equipment … most of that is due to the uncertainty in the Renewable Fuel Standard.”

nfu_logo2EPA is expected to release the final rule at the end of November and NFU president Roger Johnson says they have heard nothing to indicate they will change that time line. “They agreed to that in the court order,” said Johnson. “It’s hard to say what to expect from them.”

Johnson stressed that the so-called blend wall should not be included in any determination for volume requirements under the RFS. “When the RFS was put in place it was never intended that it would stop at ten percent,” he said. “It was always the intent that it would go way beyond ten percent.”

Bowling says corn growers have responded to the demand for more corn to produce ethanol and another record crop is expected this year. “We’re still expecting yields of 162 bushels per acre at minimum,” said Bowling. “We have carry over that’s growing and without a strong Renewable Fuel Standard demand for corn is going to decrease.”

Listen to the announcement from NCGA and NFU here: Press call on RFS/farm income white paper

Ethanol Production with Enogen Tops 1B Gallons

There are now 16 ethanol plants using Enogen corn according to Syngenta. When combined, the plants have a production capacity of more than 1 billion gallons of ethanol per year. In addition, Syngenta says there are also in talks with a number of other plants to begin using the only biotech corn designed specifically to improve ethanol production.

Enogen logoLast year, Enogen was grown on nearly 225,000 acres while in 2016 that number is expected to exceed 400,000 acres. According to Jack Bernens, head of Enogen for Syngenta, the robust alpha amylase enzyme found in Enogen corn hybrids helps an ethanol plant dramatically reduce the viscosity of its corn mash and eliminate the need to add a liquid form of the enzyme.

“This breakthrough viscosity reduction can lead to unprecedented levels of solids loading, which directly contributes to increased throughput and yield, as well as critical cost savings from reduced natural gas, energy, water and chemical usage in ethanol plants,” Bernens said. “Growers who plant Enogen corn benefit as well – they earn an average premium of 40 cents per bushel.”

Syngenta says Enogen is growing in popularity because of the value it delivers and the opportunity it provides corn growers to be enzyme suppliers for their local ethanol plants. Assuming an average yield of 165 bushels an acre, Enogen corn is expected to generate approximately $26 million of additional revenue for local growers in 2016 through per-bushel premiums. Numerous trials have shown that Enogen hybrids perform equal to or better than other high-performing corn hybrids.

“The agreements we have in place with a steadily increasing number of plants will enable them to source alpha amylase directly from growers and keep enzyme dollars in those local communities,” added Bernens. “This is what truly sets Enogen corn apart from other technologies designed to enhance ethanol production. It adds significant incremental value at the local level for communities that rely on their ethanol plant’s success.”

Growth’s Kelly Manning Shares ‘All Things Ethanol’

Growth Energy's Kelly Manning brings out the 'big guns" during his all things ethanol interview with DF blogger Joanna Schroeder.

Growth Energy’s Kelly Manning brings out the ‘big guns” during his all things ethanol interview with DF blogger Joanna Schroeder.

Growth Energy’s Kelly Manning, vice president of development, shared all things ethanol with me during the #FarmProgressShow in Decatur, Illinois and it was great to catch up after a year of the organization fighting the good fight with the Environmental Protection Agency (EPA) to keep the Renewable Fuel Standard (RFS) going forward. But this was not the focal point of our conversation; rather, Manning gave me updates on all the consumer and retailer education and infrastructure development they are doing around the country about ethanol.

For all the anti-ethanol boaters out there, Manning told us about Don Onken, a farmer from Illinois, who broke the speed record with his American Ethanol Mystic catamaran, topping out at speeds of 208 mph. Manning said Onken is a passionate supporter of ethanol and passionate about speed so he put the two together. His boat runs on four engines, all powered with 90 percent ethanol. Manning said that no matter what you read, ethanol is safe to use with boats and encourages people to get the facts and they would like to work with the boating industry to discuss the safety of ethanol and boats.

On to E15. Just this week all drivers of vehicles newer than 2001 can use E15 again. The industry has been working to change this so that drivers can use the ethanol blend year round. Manning noted that two years ago the conversations they were having with retailers were quite different than the conversations they are having now. He explained that E15 is “More economical at the pump overall. It’s saves them money. It drives store traffic. We have retailers who are seeing thirty percent jumps on their inside sales.”

Manning also said that the Prime the Pump program has been successful in expanding ethanol blends and today there are 23 states offering consumers E15 at the pump. Also helping is large retailers offering E15. But in terms of the issue with EPA, Manning said that this is a high priority for retailers and many have joined Growth’s advocacy efforts with the EPA to resolve this issue and allow E15 sales year round. (It’s a RVP, or Reid Vapor Pressure Issue).  He encouraged consumers to let retailers know they want the fuel, and, Fiat, the last auto manufacturer hold-out has endorsed E15.

Other topics of discussion included flex pumps (ethanol blends such as E30, E40 and E85), rolling out an auto dealership education program and the success of the NASCAR program and the new NASCAR-branded ethanol labels at the pump.

To learn more about ‘All Things Ethanol’ listen to my interview with Kelly Manning: Interview with Kelly Manning, Growth Energy

2015 ACE Annual Meeting Photos

Ethanol Report on Growing Biofuels Infrastructure

ethanol-report-adUSDA has announced new funding for biofuels infrastructure at fueling stations and Renewable Fuels Association (RFA) president and CEO Bob Dinneen thinks EPA should pay attention to that message. In this Ethanol Report, Dinneen also comments on what Congress may or may not do the rest of this session, and how another big corn crop makes keeping the RFS on track more important than ever.

Listen to this edition of the Ethanol Report here: Ethanol Report on Growing Biofuels Infrastructure

NCGA: We Will Not Stand for RFS Attacks

Rob Elliot NCGAThe National Corn Growers Association (NCGA) is continuing to fight back said NCGA president Chip Bowling of Maryland during a press conference at the Farm Progess Show. “It’s about the many people who attack us [farmers] in DC like the DC bureaucrats, radio talk loudmouths and fearmongers on social media.”

Among other issues, Bowling was referring to the attack on ethanol through the Renewable Fuel Standard (RFS). He noted that growers must find a way to stay in business when market prices drop below the price of production. “That is why we’re not standing by while government regulators ignore the law when it comes to ethanol and the Renewable Fuel Standard,” said Bowling.

In addition to defending the RFS, Bowling said NCGA is working to help build infrastructure for higher ethanol blends such as E15 and E85 while working with their allies at the U.S. Grains Council to increase ethanol and by-products exports such as dried distillers grains DDGs.

To learn more about NCGA’s biofuel and bioproducts intiatives, listen to their Farm Progress Show press conference here: NCGA #FarmProgressShow Press Conference

Check out the Farm Progress Show photo album.

API Releases “Flawed Study”

A new published study from the University of Michigan and funded by the American Petroleum Institute (API) finds that when using annual basis carbon (ABC) accounting, corn-ethanol is not better than its petroleum counterpart. ABC accounting uses spatially and temporally explicit analysis of the direct greenhouse gas emissions (GHGs) exchanges between the atmosphere and a physical vehicle-fuel system. LCA is the analysis of the environmental impact of a product from cradle to grave, or in the case of liquid transportation fuels, “well to wheel”.

Michigan-API biofuels studyThe study abstract states that using an ABC case study of a corn ethanol biorefinery and the farmland that supplies it shows that using the ethanol it produced instead of gasoline provided no significant reduction in GHG emissions, in contrast to an LCA result that found a 40% GHG reduction for the same facility.

In response to the recent study Tom Buis, CEO of Growth Energy, said, “We can add this study to the ever growing pile of flawed research funded by Big Oil, who has a vested interest in protecting its monopoly on our nation’s fuel and ensuring that America stays addicted to oil. The standard life-cycle assessment tool accepted by the scientific community, Argonne National Laboratory’s GREET model, shows that ethanol reduces greenhouse gas (GHG) emissions by 34 percent compared to gasoline. No amount of self-serving science will change the fact that in addition to reducing GHG emissions, ethanol also reduces our nation’s dependence on foreign oil and the price of gasoline for America’s drivers.”

East Kansas Agri-Energy Celebrates 10th Anniversary

East Kansas Agri-Energy (EKAE) is celebrating its 10th anniversary of operations. The Garnett, Kansas ethanol biorefinery is hosting an event on Saturday, August 15th and the Renewable Fuels Association (RFA) will be onsite to share in the plant’s success along with government and industry officials and featuring a keynote speech from Sen. Jerry Moran (R-Kan). Attendees can also tour the facility.

EKAE_Logo_235Since opening in 2005, EKAE has produced and sold more than 376 million gallons of ethanol, more than 2 million tons of wet and dried distillers grains animal feed, and nearly 35 million pounds of corn distillers oil. The plant has processed more than 137 million bushels of corn since opening, creating an important new market for local farmers and adding value to East Kansas crops.

Following a plant expansion, EKAE can now produce 48 million gallons of ethanol each year. Construction is also underway for a co-located renewable diesel facility that will convert corn distillers oil into low-carbon advanced biofuel. Other accomplishments include the Environmental Protection Agency (EPA) certifying the ethanol plant as an efficient producer. The EPA determined that the plant’s corn ethanol reduces greenhouse gas emissions by 27.2 percent as compared to petroleum even when the elusive “land use change” calculations are included.

“We’ve come a long way since that first gallon of ethanol in 2005. What started as an idea at a local coffee shop is now a multi-million dollar advanced biofuel refinery,” said EKAE Chairman Bill Pracht. “Our company has evolved to become a leading driver of economic growth in our community, and we’re very proud of that fact. Once our renewable diesel project launches, we will employ more than 50 hard-working men and women at our facility. We’re also proud of our safety record and the fact that we have had no lost-time accidents since day one.”

“The entire EKAE family should be congratulated for this remarkable achievement,” noted RFA Senior Vice President Geoff Cooper. “The EKAE facility has made an indelible mark on the Garnett community, and for that the company’s board, staff, and investors should be very proud. But they should also be proud of the fact that the positive impacts of this plant—including lower gas prices, reduced dependence on foreign oil, and cleaner air—extend well past the borders of Anderson County.”

Jeff Oestmann, EKAE President and CEO, explained that the ethanol plant has experienced a tremendous level of success in an industry that is often known for its unpredictability. “East Kansas Agri-Energy has had an unquestionably positive economic impact on Garnett, helping to revitalize the community by creating demand for local producers and saving consumers cash at the pump.” Continue reading

EPA’s Ethanol Rules Pollutes Air Equal to 1 Mil Cars

ERCThe government’s proposal to cut the amount of ethanol to be blended into the nation’s fuel supply would pollute the air equivalent to one million more vehicles on the road. The Energy Resources Center (ERC) at the University of Illinois at Chicago conducted the analysis on the U.S. Environmental Protection Agency’s proposed ethanol blending rules.

The findings come in the wake of proposed rules by the U.S. E.P.A. that call for a reduction of the volume of ethanol blended in gasoline as mandated by the Renewable Fuel Standard (RFS), a program of the Energy Policy Act of 2005 signed into law 10 years ago this month. If the rules are adopted as proposed, a total of 17.5 billion gallons of ethanol would be blended with gasoline by 2016, 3.75 billion fewer gallons than originally mandated by Congress.

“The RFS has been one of the most successful federal policies enacted in the United States because it achieved exactly what it was intended to do: spur research and investment, lower greenhouse gas emissions and reduce dependence on foreign oil. Our work has demonstrated that, over the last 10 years, steady reductions in greenhouse gas emissions have materialized as biofuels became a more efficient, high quality product,” said Dr. Steffen Mueller, principal economist at the Energy Resources Center.

The peer-reviewed analysis was conducted using the GREET Model (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) developed by Argonne National Laboratory which examines the full life cycle emissions impacts of energy sources. As part of the analysis, carbon emissions related to the planting, growing, harvesting, transportation and production of corn into ethanol were compared to that of oil recovery and production.

Under the EPA’s proposed rules, conventional starch ethanol would likely be reduced to 13.4 billion gallons from 15 billion gallons in 2015. In this scenario, the analysis found that 4,520,000 tonnes of additional CO2 emissions would be incurred in 2015.

Both the National Corn Growers Association and the Illinois Corn Growers Association expressed disappointment in the direction the EPA has taken.

“It is very curious that some vocal audiences known for touting job creation, a stronger domestic economy, and reduced air and water pollution were largely mute on this significant occasion,” said Chip Bowling, NCGA president and a farmer from Maryland. “It is pretty hard to miss the irony of this anniversary-related RFS assessment hitting while the Environmental Protection Agency is weakening the successful legislation.”

“We are disappointed that the same federal agency charged to protect human health and the environment is proposing a rule change that would directly lead to greater greenhouse gas emissions,” said Ken Hartman, president of the Illinois Corn Growers Association. “After 18 months of delay in proposing new rules, the EPA has chosen not only to shirk its legal obligation as set forth by Congress, but to lose sight of its own mission.”

The EPA is expected to release its final rule in November.

USDA Predicts Big Corn and Soybean Crops

USDAUSDA is forecasting the third largest corn crop on record and the second largest soybean crop in a new planted acreage update released today.

U.S. growers are forecast to produce 13.7 billion bushels of corn this year, according to the report from USDA’s National Agricultural Statistics Service (NASS). That is actually a four percent decrease from last year’s production, but if realized will be the third largest production on record. The numbers are up 156 million from the July projection, with the season’s first survey-based corn yield forecast at 168.8 bushels per acre, 2.0 bushels higher than last month’s projection.

Overall, the report says that growers nationwide planted 88.9 million acres to corn, unchanged from the June estimate. As of August 2, 70 percent of U.S. corn was reported to be in good or excellent condition, three percentage points below the same time last year.

U.S. soybean growers are now forecast produce the second largest crop on record although one percent less than last year. NASS forecasts U.S. soybean production of 3.92 billion bushels with a yield of 46.9 bushels per acre, which would also be the second largest on record, down 0.9 bushels per acre from the record set in 2014. Growers are expected to set new record-highs in Arkansas, Georgia, Kentucky, Michigan, Minnesota, Nebraska, South Dakota, and Virginia.

The new World Agricultural Supply Demand Estimate also released today increased usage of corn for ethanol from 5.225 million bushels to 5.250 million and lowered the average corn price estimate for the year five cents to $3.35-3.95 per bushel. “With the lower prices, domestic demand should kick up,” said analyst Jack Scoville of the PRICE Futures Group during the Minneapolis Grain Exchange call on the report. “Which will make ethanol that much more attractive in the corn … definitely should help biofuels consumption.”

MGEX Crop Call with Jack Scoville

IBISWorld Offers Buying Strategies for Ethanol

ibisworldThe ethanol market can be a pretty volatile place when it comes to pricing. IBISWorld is offering a report on how to identify where volatility exists, not just in ethanol, and how to reduce risks in price instability.

Because of fluctuating key input costs, prices of diesel and ethanol have displayed a high level of price volatility. While diesel and ethanol are both used for fuel, they do not share the same production process because diesel fuel comes from crude oil and ethanol comes primarily from corn…

Meanwhile, the price of corn is estimated to fall 21.7% in 2015, which will play a large part in the 29.2% drop in ethanol prices expected this year. Similar to diesel, ethanol prices are forecast to reverse and then stabilize at mild growth in the coming years.

The fuel market is known for its booms and busts, which can foster a hectic procurement environment. As such, buyers are encouraged to engage in long-term contracts with their fuel suppliers to reduce their exposure to price fluctuations. By locking in favorable rates now while prices are low, buyers can avoid the risk of anticipated prices rises in the future.

More information is available here.