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Ethanol and biodiesel are making “modest” contributions to ag products giant Cargill’s profits… according to numbers released by the U.S.’s largest agricultural company.

This story in the Minneapolis Star-Tribune says the company reports fiscal first-quarter profit rose 83 percent as more soybeans and corn were processed and the company was able to successfully hedge higher grain costs:

Cargill benefited from soaring worldwide demand for soybeans, corn and other agricultural products, more than making up for surging commodity costs and volatile credit markets. Corn prices were 49 percent higher in the quarter than a year earlier, wheat was up 67 percent and soybeans rose 41 percent.

“Cargill was able to handle the volatility,” said Anil Passi, an analyst with Dominion Bond Rating Service in Toronto who follows Cargill’s $9.9 billion in bonds.

Of course, a lot of that increased demand comes from the fact that more corn and soybeans are going to biofuels, which make up about 5 percent of the company’s net income.

Ask the American public about renewable fuels and odds are you’ll get two thumbs up. At least, that’s what a poll conducted by Harris Interactive found.

A new poll conducted by Harris Interactive(R) shows overwhelming American support for expanding renewable fuel options with nine in 10 U.S. adults (88 percent) agreeing the U.S. should pursue renewable energy sources.

The poll, commissioned by the Clean Fuels Development Coalition, concludes that 72 percent of adults believe that higher oil prices have had a substantial impact on the rising cost of food in recent months, compared to only 35 percent who believe ethanol production has had a significant impact on rising food prices.

The poll asked 2,199 U.S. adults about their attitudes regarding ethanol. Other results indicate that nearly eight in 10 adults (78 percent) believe usage of ethanol would lessen the country’s dependence on foreign oil.

Energy policy is at the forefront of national debate with pending energy legislation expected to hit congressional calendars this fall. The Senate- approved version of the energy bill contains a provision mandating the use of 36 billion gallons of ethanol by 2022.

Surprise, surprise… petroleum giant Texas has cut some of the state’s incentives to biofuels makers.

The Dallas Morning News reports that lawmakers in the state legislature removed funding for biodiesel and ethanol because some complained that they were competing with the state’s petroleum industry. But some lawmakers see the move as short sighted:

Rep. David Swinford, a Republican lawmaker from West Texas who wrote the original legislation, said Texas was betting the state’s future on “a depleting entity” by ignoring alternative fuels.

“We have been subsidizing oil and gas in Texas for a long time, and I voted for it,” Mr. Swinford said. “But the federal government is saying, ‘We want everybody to go and do these things – we are willing to give incentives.’ It would be like Texas having its head in the ground … to say, ‘We don’t want to do that.’ “

The move is already causing some renewable fuel plant builders to reconsider plans for refineries in Texas, and it has drawn the ire of biofuel advocates:

“We can’t dally for a whole lot longer if we expect to have an industry in this state,” said Russel E. Smith, executive director of the Texas Renewable Energy Industries Association. “You have to lay the groundwork for producing the fuels in a state and help stimulate the market for them.”

Meanwhile, other states and the federal government seem to be going in the other direction… with no time to wait and see if Texas catches up.