USDA Announces Funding for Biofuel Infrastructure

USDA logoAgriculture Secretary Tom Vilsack today announced that 21 states will receive grants through the Biofuel Infrastructure Partnership (BIP) to help provide access to more renewable fuels for America’s drivers.

“The Biofuel Infrastructure Partnership is one approach USDA is using to aggressively pursue investments in American-grown renewable energy to create new markets for U.S. farmers and ranchers, help Americans save money on their energy bills, support America’s clean energy economy, cut carbon pollution and reduce dependence on foreign oil and costly fossil fuels,” said Vilsack.

USDA estimates that the BIP grants will support nearly 5,000 pumps at over 1,400 fueling stations across the country. “Our investment will nearly double the number of pumping systems available across the U.S.,” Vilsack said. According to the list of estimated numbers of pumps that could be installed per state, Florida and Texas will be the biggest beneficiaries with 892 in Florida and 763 in Texas. Minnesota at 620 and Illinois at 428 are the largest recipients in the Midwest.

Secretary Vilsack also challenged conclusions in the American Petroleum Institute report out yesterday that he called “preposterous.”

Listen to Vilsack’s announcement here: USDA Secretary Vilsack biofuels investment

Q and A with reporters: Vilsack answers BIP questions

USDA Report Shows Importance of Int’l Biofuel Trade

USDA logoA new government report says that while the U.S. is a major exporter of biofuels, it still imports biofuels in order to meet government mandates. The study from the U.S. Department of Agriculture’s Economic Research Service says some other countries are major exporters and domestic users, thanks to laws there that allow greater blending amounts.

The ethanol blend wall in the United States, and an increase in demand for biofuels from other countries, helped the United States emerge as a net exporter of ethanol for the first time in 2010, with net exports positive each year since. Indeed, the United States has become the world’s largest exporter of ethanol. U.S. ethanol production and exports both remained strong in the face of falling gasoline prices in 2014 due to interactions of supply- and demand-side factors; production capacity beyond domestic policy requirements and strong export markets helped make high exports possible. In addition, U.S. imports of ethanol in 2014 fell to their lowest amounts in years.

Along with market forces, policies can affect future U.S. biofuel trade. If the blending rate in Brazil continues to increase (as it has recently), less Brazilian ethanol will be available to compete with the United States on the global market. At the same time, Brazil could continue to import U.S. ethanol to help meet its mandate. In addition, U.S. biofuel policies could affect the future of U.S. biofuel trade. For example, reducing the amount of ethanol that can be derived from corn in the U.S. renewal fuel mandate could potentially lead to reduction in U.S. ethanol production infrastructure in the long run, which could limit the availability of ethanol for exports.

The study also indicates some grave implications for the U.S.’ biofuel producers if the federal government continues to ignore the requirements under the law that created the Renewable Fuel Standard.

If the scheduled future increases in the U.S. mandate for advanced biofuel are not met by increased domestic production of advanced biofuels (and are not waived), the increase in the mandate amounts will need to be met with imports, such as sugarcane-based ethanol from Brazil.

USDA Offers Incentives for Biomass for Energy

usda-logoEnrollment is underway for farmers and forest landowners to get financial assistance for growing new sources of biomass for energy or biobased products. This U.S.Department of Agriculture (USDA) news release says the money comes from the Biomass Crop Assistance Program (BCAP).

Biomass energy facilities or groups of producers may submit proposals for new BCAP project areas. Proposals will be accepted on through Nov. 6, 2015. USDA will also allocate $7.7 million towards four existing BCAP project areas in New York, North Carolina, Ohio/Pennsylvania and Kansas/Oklahoma, targeting the establishment of an additional 10,500 acres of shrub willow, giant miscanthus, and switchgrass for energy. Project area sponsors include Chemtex International, Aloterra Energy LLC, Abengoa Biomass LLC and ReEnergy Holdings LLC. Farmers and forest landowners may enroll for biomass establishment and maintenance payments for these four sites through Sept. 25, 2015.

In June, USDA began accepting applications from foresters and farmers seeking financial assistance for removing biomass residues from fields or national forests for delivery to energy generation facilities; the deadline for those applications is Sept. 4, 2015. The retrieval payments are provided at a cost-share match of $1 for $1 up to $20 per dry ton with eligible crops including corn residue, diseased or insect infested wood materials, or orchard waste. The energy facility must first be approved by USDA to accept the biomass crop, and deliveries to the facilities can continue until Dec. 11, 2015.

So far, BCAP has provided incentives for producers across more than 48,000 acres in 71 counties and 11 different project areas.

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

USDA Builds Rural Energy with Loans & Grants

usda-logoThe U.S. Department of Agriculture is helping build renewable energy in rural areas. Agriculture Secretary Tom Vilsack announced $63 million in loans and grants for 264 renewable energy and energy efficiency projects nationwide that USDA is supporting through its Rural Energy for America Program (REAP).

“This funding will have far-reaching economic and environmental impacts nationwide, particularly in rural communities,” Vilsack said. “Investing in renewable energy and energy efficiency projects supports home-grown energy sources, creates jobs, reduces greenhouse gas pollution and helps usher in a more secure energy future for the nation.”

These REAP projects are expected to generate and/or save 207.8 million kilowatt hours (KWh) of energy – enough to power more than 13,600 homes for a year.

The next application deadline for REAP grants is November 2, 2015.

Despite Fewer Acres, Plenty of Corn for Ethanol

NCGA-Logo-3The number of acres corn planted is down this year. But the National Corn Growers Association (NCGA) says there’s plenty of the crop for ethanol and all the other uses from the grain. Citing the U.S. Department of Agriculture’s (USDA) Acreage report, NCGA says total corn planting in the United States totals 88.9 million acres, the lowest planted acreage since 2010 but the sixth-largest U.S. corn acreage planted since 1944.

“Corn farmers produced an abundance in 2014 that resulted in a large carry over into this year,” National Corn Growers Association President Chip Bowling said. “While planted acreage has decreased as farmers in many parts of the country face unrelentingly wet conditions, U.S. farmers have steadily increased our ability to grow more corn on every acre. Americans can rest assured that we will be able to meet all needs, be they for food, fuel or fiber, for years to come.”

USDA projects 13.5 billion acres of corn to be harvested this fall.

Better Switchgrass Makes for Better Biofuel

switchgrassWhile switchgrass is seen as a good candidate for biofuels, the challenge has been producing it in the quantities of biomass yield to make it worth the effort. But this story from the American Society of Agronomy says researchers with the U.S. Department of Agriculture are looking at ways to make the plant more biofuel friendly.

[Michael Casler, a research geneticist with the USDA Agricultural Research Service,] and others are trying to [make a better switchgrass for biofuels] by using alternative breeding methods. Zulfi Jahufer is a senior research scientist in genetics and plant breeding at the AgResearch Grasslands Research Centre in Palmerston North in New Zealand, and was a co-researcher with Casler.

But achieving their goals isn’t easy. The ideal switchgrass wouldn’t possess one trait, but many. It would have a high amount of biomass per acre and be able to produce a lot of ethanol. It would also have low levels of lignin, a material found inside plants that prevents maximum ethanol production…

When the ideal plant would contain more than one important trait, it’s inefficient to select for them one at a time. To combat this issue, and breed switchgrass that has the optimal combination of these traits, the researchers tried evaluating plants using the Smith-Hazel Selection Index.

This index allowed the researchers to estimate and combine information on multiple traits. It also looked at the economic value of each trait, which further maximizes the rating.

The researchers say the next step needed to meet their goals is to use the protocols in an actual breeding program. They will begin to employ the best selection indices over the next few generations to obtain a more ideal switchgrass.

This research was recently published in the journal Crop Science.

USDA Taking Apps for Biofuels Infrastructure Funding

USDA logoUSDA’s Commodity Credit Corporation (CCC) is now accepting applications in 50 states, the Commonwealth of Puerto Rico and Washington, D.C. for up to $100 million in grants under the Biofuels Infrastructure Partnership (BIP). The funding is to support the infrastructure needed to make more renewable fuel options available to American consumers. The Farm Service Agency will administer BIP.

Through BIP, USDA will award competitive grants, matched by states, to expand the infrastructure for distribution of higher blends of renewable fuel. These competitive grants are available to assist states, the Commonwealth of Puerto Rico and Washington, D.C. with infrastructure funding. States that offer funding equal to or greater than that provided by the federal government will receive higher consideration for grant funds. States may work with private entities to enhance their offer.

CCC funds must be used to pay a portion of the costs related to the installation of fuel pumps and related infrastructure dedicated to the distribution of higher ethanol blends, for example E15 and E85, at vehicle fueling locations. The matching contributions may be used for these items or for related costs such as additional infrastructure to support pumps, marketing, education, data collection, program evaluation and administrative costs.

This new investment seeks to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers. This will expand markets for farmers, support rural economic growth and the jobs that come with it, and ultimately give consumers more choices at the pump.

USDA Funds 544 REAP Projects

The U.S. Department of Agriculture (USDA) has awarded 544 renewable energy and energy efficiency projects more than $6.7 million as part of the Rural Energy for America Program (REAP). USDA Secretary Tom Vilsack made the announcement at the Snake River Brewing Company, in Jackson, Wyoming. The company received a $13,810 REAP grant to install a solar panel to generate energy for the business.

srb-logo-3dThese grants will help farmers, ranchers and small business owners use more renewable energy, which cuts carbon pollution, reduces our dependence on foreign oil, saves businesses money on their energy bills and creates American jobs,” Vilsack said. “All of these are crucial components to developing healthier, more economically vibrant rural communities.”

REAP was created by the 2002 Farm Bill and was reauthorized by the 2014 Farm Bill. REAP funding has helped farmers expand renewable energy use in recent years. The new Census of Agriculture shows the number of farms utilizing renewable energy production has doubled in the last five years. Since 2009, USDA has awarded $545 million to support more than 8,800 REAP projects nationwide.

Eligible agricultural producers and rural small businesses may use REAP funds to make energy efficiency improvements or install renewable energy systems, including solar, wind, renewable biomass (including anaerobic digesters), small hydroelectric, ocean energy, hydrogen and geothermal.

USDA Lowers Corn for Ethanol Forecast

usda-logoIn the June World Agricultural Supply and Demand Estimate, USDA raised corn beginning stocks for 2015/16 with a 25 million bushel reduction in 2014/15 forecast corn use in ethanol production. The revision, the result of a reduction of the forecast corn use in ethanol reduction for 2014/2015, is based on data reported in the Grain Crushings and Co-Products Production report through April.

Forecasts continue to show farmers planting 89.2 million acres and harvesting 81.7 million acres, with an average yield of 166.8 bushels per acre and production of 13.6 billion bushels, down from 2014 corn production of 14.2 billion bushels.

Despite total supply and ending stocks revisions, USDA continues to estimate the average farm price for the current market year at $3.55 to $3.75 per bushel, and a broader range of $3.20 to $3.80 for the next market year, which begins Sept. 1.