Biodiesel, Livestock Industries Work Together in Iowa

IBBThe biodiesel and livestock industries are working together in Iowa. This news release from the Iowa Biodiesel Board (IBB) says poultry and livestock producers are seeing greater profits because of the green fuel.

That was the message … at Western Dubuque Biodiesel’s plant, where soybean groups hosted a tour of the biodiesel facility and gave an economic presentation to members of the state livestock industry. The United Soybean Board, Iowa Biodiesel Board and Iowa Soybean Association hosted about 40 ag leaders to share information and answer questions on how biodiesel impacts the profitability of the livestock industry.

An increased demand for biodiesel also increases the demand for domestic soybeans to crush, growing the supply of soybean meal. This greater supply lowers the meal’s price, which decreases the relative cost of it to poultry and livestock farmers.

That means in addition to soybean farmers, animal agriculture also benefits from biodiesel.

“Animal agriculture is the soybean farmer’s No. 1 customer with 97 percent of soybean meal going to feed poultry and livestock,” said Delbert Christensen, a soybean farmer from Audubon, Iowa and director on USB. “Biodiesel helps animal agriculture by creating demand for soybean oil, which helps lower the cost of animal feed and creates an additional market for animal fats.”

More demand for biodiesel helps keep soybean meal prices competitive as demand for soybeans continues to rise globally, while biodiesel has also created demand for animal fats and tallow to be made into biodiesel. IBB says for Iowa farmers, these meal savings and increased fat and tallow values really add up. In 2013 alone, pork farmers saved $60,802,700 and dairy and beef farmers saved $25,511,700 respectively, strengthening animal agriculture in the state. Biodiesel by-product glycerin also can be an additional energy source in feed troughs.

Ethanol Advocate on a Mission

ace-flyin-15-couserIowa cattle producer and ethanol advocate Bill Couser was a man on a mission this week in Washington DC with the American Coalition for Ethanol (ACE) Fly-In.

Couser finally got a sit down with Environmental Protection Agency Administrator Gina McCarthy to talk about the Renewable Fuel Standard (RFS) and other issues. “I was able to schedule a half hour with her and I took the cattle industry and the ethanol industry in there and we sat down there as one,” said Couser. “The impression we got from Gina is that she’s there to work with us.”

Couser is co-chair of the Iowa-based America’s Renewable Future, which recently helped to sponsor the Iowa Ag Summit where potential presidential candidates were interviewed live about their views on important agricultural issues, including the RFS. At that event, Sen. Ted Cruz (R-TX), who just became the first to officially throw his hat in the ring for the Republican presidential race, stated his opposition to the RFS and Couser had a chance to speak with him about it. “He’s a man from Texas who is set in his ways,” said Couser. “We’re looking forward to the future and visiting with him more.”

Listen to an interview with Bill from the ACE fly-in here: Interview with Bill Couser, America's Renewable Future

2015 ACE Fly-In Photo Album

RFA Submits Comments on Animal Feed Rule

RFANewlogoThe Renewable Fuels Association (RFA) submitted comments to the Food and Drug Administration (FDA) yesterday on the supplemental rulemaking proposal outlining best practices for the regulation of animal food under the Food Safety Modernization Act (FSMA). The act outlines regulations for animal feed, which includes the ethanol co-product dried distillers grain.

RFA submitted comments earlier this year following the initial proposed rule noting that animal feed would be unnecessarily regulated in a similar fashion to human food. RFA praised the FDA for addressing this concern in its updated version, noting that the “revised CGMPs (current good manufacturing processes) in the supplemental proposed rule appear more applicable to the animal feed industry and appear to provide more flexibility for the wide variety of the animal feed facility processes covered.”

However, RFA raised concerns with additions to the rule that would implement “…product and environmental testing programs, supplier approval programs, and verification programs that were not in the initial proposed rule language.” The comments stress that an individual plant “…should be provided the flexibility to determine its own needs and compliance strategy.” RFA also noted that “If applied in a prescriptive and indiscriminate way, these programs can add unnecessary cost burdens and divert resources away from the effective practices that ethanol producers currently use to assure safe, high quality co-products.”

Read RFA comments here.

Economist Still Opposes RFS Despite Livestock Recovery

bivi-nc-meyerDespite the fact that livestock margins have made a dramatic recovery in the past few years as availability of feed has increased and prices have decreased, a leading livestock economist still opposes the Renewable Fuel Standard (RFS).

“We’ve thrown billions of dollars at this industry already and it ought to have to stand on its own,” said Steve Meyer, Paragon Economics, during an interview last week at an event for pork producers. “It has a place in the fuel business as an oxygenate and as an octane enhancer, it’s not going away from there.”

Meyer, who has always been an outspoken critic of U.S. energy policy, says his beef with the RFS is that it caused ethanol production to increase too much too quickly. “The trend yield on corn is up about two bushels per year. If you had grown the ethanol business at a rate equivalent to that, I wouldn’t have been able to gripe too much about it,” he said. “But it was far faster than that …. and the economic impact of that was very negative for (livestock) producers.”

However, the tide has turned dramatically to the point where demand and prices for livestock and poultry are riding high and there is almost record high feed availability with manageable prices. “We’re not going back to $2 corn and $180 bean meal but we’re at the lowest levels on costs in five years,” said Meyer. “We’re not increasing corn usage for ethanol every year like we were, it’s pretty much flat. It’ll grow a little bit but not much and we can probably keep up with that with trend yield growth on corn.”

Despite that, Meyer thinks the RFS needs to go away. “I don’t hate ethanol,” he says he tells corn producers. “I just don’t like subsidized, mandated ethanol when I’m the alternative user of the input.”

Interview with Steve Meyer, Paragon Economics

Ag Subcommittee Hears Pros and Cons of RFS

glauber1The food versus fuel debate arose once again in front of Congress. At last week’s U.S. House Ag Subcommittee hearing in Washington, D.C., opponents and proponents of the Renewable Fuels Standard presented their arguments on the RFS and its impact on the livestock industry.

One of the biggest opponents of the RFS is the poultry industry. Their members argued that ethanol has forced up feed prices that keeps them from expanding operations and fulfilling consumers’ needs to have a cheaper alternative to beef and pork, calling the RFS “broken beyond repair.” But the chief economist at the U.S. Department of Agriculture, Dr. Joseph Glauber, said while ethanol initially did have an impact much bigger factors forced up the price of feed.

“Certainly, the ramp up [in ethanol production] we saw from 2005 to 2010 had a big impact on corn prices, but we also saw a big increase in energy prices, so it’s not the only thing going on,” he told the committee.

In fact, during that same ramp-up period, petroleum prices shot up to record levels, and RFS proponent, Roger Johnson, President of the National Farmers Union, said the agriculture industry should be united for renewable fuels.

“The World Bank found that crude oil is the number one determinant of global food prices. We should reduce our dependance on oil consumption in order to be more food secure, and biofuel production is an excellent way to do that,” adding that pitting the biofuels industry against the livestock growers is counter-productive.

The bottom line, according to Glauber, is that biofuels are important, and they’re here to stay.

“Corn-based ethanol is a vibrant industry and is competitively priced against gasoline, and producers will continue to produce ethanol from corn as long as profit margins are there. And profit margins have been there.”

Global Farmers Learn Value of Ethanol

corn-couserEach year during World Food Prize week, the Truth About Trade and Technology Global Farmer Roundtable brings farmers from all over the world to visit Couser Cattle Company in Nevada, Iowa.

Owner Bill Couser not only produces cattle, he also grows plenty of corn on his operation and is a big proponent of ethanol as a means of getting the most out of every kernel. “It’s no different than a barrel of crude. We don’t just get gasoline from a barrel of crude. We take it apart and get many different things,” he said. “When we look at corn, we can feed it, we can take it to ethanol plants, we can sell it domestically, we can sell it abroad.”

As a founder of Lincolnway Ethanol plant, Couser is really excited about the cellulosic project with DuPont using corn residue. “We’ve got the residue there and if we manage it correctly, we have a new cash crop,” he said. Interview with Bill Couser

Couser, who is also a former president of Iowa Renewable Fuels Association, showed a powerpoint presentation adding up the multiplier effect of a single acre of corn going to an ethanol plant. When he figured that final amount corn was $7 a bushel and it added up to over $12,000 per acre. But even at $3, it’s still nearly $8,000. Watch the video to see how he determines that.

2013 TATT Global Farmer Roundtable photos

Tune in Live for Great RFS Debate

rfa-ncba-debateRenewable Fuels Association President and CEO Bob Dinneen is live right now on AgriTalk in a debate with National Cattlemen’s Beef Association (NCBA) Executive Director of Legislative Affairs Kristina Butts over the Renewable Fuel Standard (RFS). The Great RFS Debate is being co-hosted by Agri-Pulse.

Dinneen is pictured here, left, as the debate begins. Next to Dinneen is AgriTalk host Mike Adams, Agri-Pulse editor Sara Wyant, and Kristina Butts on the right.

Archived program available here.

Renewable Fuel Standard Debate This Week

Representatives of the National Cattlemen’s Beef Association (NCBA) and the Renewable Fuels Association (RFA) will be squaring off to debate on the Renewable Fuel Standard (RFS) this week in Washington D.C.

AgriTalk and Agri-Pulse will be hosting the debate via broadcast and the web on September 12 starting at 11:00 am Eastern time live from the Longworth Building, Room 1300. Participants will be RFA president and CEO Bob Dinneen and NCBA Vice President Government Affairs Colin Woodall.

RFA-logo-13“The Renewable Fuel Standard is decreasing our dependence on foreign oil, creating jobs, and revitalizing rural communities. I am all geared up to explain the facts and debunk the negative attacks,” Dinneen says. “It is an excellent time for this debate. USDA is expecting a robust corn crop and just last month USDA issued a report showing that food prices are rising at a slower rate than expected.”

ncba-logo“We appreciate the opportunity to discuss the Renewable Fuel Standard (RFS). America’s cattlemen and women are not opposed to renewable fuels; it’s the arbitrary mandate of their use that is at issue,” says Woodall. “This mandates places cattle feeders and the entire cattle sector on an un-level playing field for the finite amount of corn produced.”

Questions from AgriTalk and Agri-Pulse listeners and readers will be included in the debate led by Mike Adams and Sara Wyant. If you have questions on this topic, please submit them to or to no later than Wednesday, September 11. The Agri-Pulse team will be live tweeting from the event @AgriPulse. Look for the hashtag #RFSdebate.

Impact of RFS on Agriculture

Increased ethanol production has been good for corn growers, bad for poultry producers, but has overall helped increase farm income to record levels according to some testimony given in a House hearing on the Renewable Fuel Standard (RFS) this week.

rfs-hearing-pam“The Renewable Fuel Standard is doing exactly what it was intended to do,” said National Corn Growers Association President Pam Johnson of Iowa. “It has positively impacted the agriculture sector by creating jobs and promoting rural development, reducing greenhouse gases and allowing our nation to grow our energy at home.” Pam Johnson Testimony

rfs-chicken National Chicken Council (NCC) Senior Vice President and Chief Economist Bill Roenigk said at the hearing that poultry producers have struggled with rising feed costs. “Since the RFS was implemented in October 2006, the feed costs for chicken, turkey and eggs have gone up $50 billion,” he said. “More troubling than the higher costs is the volatility and trying to outguess the market.” Bill Roenigk Testimony

rfs-hearing-hurtPurdue University agricultural economist Chris Hurt told the hearing that farm income and land values have risen dramatically since implementation of the RFS. “Higher farm incomes on crop farms benefited rural communities as that higher income spread through local purchases of farm and consumer goods and services,” Hurt said. “In addition, expansion of the ethanol industry in rural communities added some employment and related economic activity.” While feed costs have increased and the crop sector has done better than livestock, Hurt said the livestock industries appear to in a recovery phase. Dr. Chris Hurt Testimony

Biodiesel Keeps U.S. Tallow at Home

Livestock eating DDGs Photo CHS IncThe world is seeing less of American tallow as biodiesel makers turn more of the animal grease into the green fuel. This article from Bloomberg says U.S. tallow exports are expected to fall nearly 4 percent because the biodiesel market is squeezing the supply and keeping the price up:

Tallow shipments from the U.S. may decline to 680,000 metric tons in 2013 from 706,000 tons last year, the Hamburg-based industry researcher wrote in an e-mailed report. They’ve dropped from a record 1.32 million tons in 1998, Oil World said.

Tallow is a by-product of beef production, meaning supply is not price sensitive, according to the report. Use of the fat to make biodiesel jumped 60 percent in the past two years, requiring demand rationing in chemistry and for edible purposes.

“Virtually stagnating world supplies and the increasing consumption from the biodiesel industry have considerably squeezed supplies available for other consumers,” Oil World said. “We expect this trend to continue in 2014, keeping tallow prices well supported.”

Around the world, biodiesel is credited with helping push up tallow use to 1.6 million tons last year from 1 million tons in 2010.