Ethanol and Food Prices

Cindy Zimmerman

Ethanol has been blamed for both higher egg prices and higher milk prices recently due to higher costs for livestock feed.

AFBF Overall, the American Farm Bureau Federation reports that for the first quarter of this year, food prices are about four percent higher than the previous quarter. Farm Bureau’s regular market basket survey shows 12 of 16 basic grocery items are higher priced, including eggs, flour, bacon, pork chops, milk, potatoes, corn oil, mayonnaise, vegetable oil, ground chuck, sirloin tip roast, and toasted oat cereal.

Items lower in price compared to the end of last year were cheddar cheese, bread, chicken and apples.

It’s interesting to note that higher egg prices are blamed on ethanol while chicken prices are lower – and that higher milk prices are blamed on ethanol, but cheese prices are lower. It’s also interesting to note that red meat prices are higher compared to the last quarter of last year, but lower or the same compared to the same quarter last year.

Finally, Farm Bureau notes that the farmer’s share of the food dollar continues to decline. At this point, farmers and ranchers only receive about 22 cents out of every dollar spent on food – which means the rest goes to costs for transportation, manufacturing, retailers, etc. In other words, the middle men. Unlike most other business people, most farmers and ranchers are unable to set their own price for the commodities they produce and sell. They receive prices set by the buyers of the products. Even if their costs go up, they are unable to accordingly pass those costs on to the consumer. Therefore, most of the time, higher food prices go to the middle men, not the farmer.

Ethanol, News

BioWillie Distributor Woes

John Davis


In what could be seen as a cautionary tale that you’ve got to have more than good intentions to make it in the biodiesel business, the company that had rights to Willie Nelson’s brand of biodiesel… BioWillie… will delay the filing of its 2006 financial results because of “circumstances surrounding the auditor review of our financial information.”

In this story in the Kansas City Star, Earth Biofuels, Inc. had to notify the Security and Exchange Commission of the delay:

Robert Anderson of Kansas City joined the company in October to help with its expansion into the Midwest. Initially enthusiastic about the company, he soon became disenchanted with its inability to follow through on its plans. Now working for another biodiesel company, Anderson worries that Earth Biofuels’ mounting difficulties could unfairly taint the biodiesel industry.

“This is a company and not an industry problem,” Anderson said.

… by late 2006 others were raising questions about the company and its financial health. The Motley Fool investment service warned investors about Earth Biofuels. Earlier this year, Forbes magazine published a critical article, alleging the company was running short on cash.

Forbes also raised questions about Dennis McLaughlin, the company’s chief executive officer, and his previous dealings, including his role at another company, Aurora Natural Gas, which filed for bankruptcy shortly after he left.

Some employees, including those selling BioWillie, have been laid off.

Biodiesel

Thune Hosts Ethanol Hearing

Cindy Zimmerman

Thune and Indy CarSenator John Thune this week hosted a hearing in his state on the growing need for ethanol research and availability.

The Senate Agriculture Committee’s energy subcommittee field hearing on “The Next Frontier of Biofuels Production: Cellulosic Ethanol and the 2007 Farm Bill” included testimony from representatives of VeraSun Energy, Poet (the company formally known as Broin), South Dakota Corn Growers, South Dakota State University, Pheasants Forever, and Ceres, Inc.

According to a press release, the senator also visited the Sioux Valley Coop in Watertown to fill up on E-20 and discuss methods for providing greater access to ethanol blends like E-20 and E-85 across the country. Senator Thune highlighted his legislation that would provide incentives to gas station owners across the country who install alternative fuel pumps that give consumers cleaner, more diverse, cost-effective options for fueling their vehicles.

E85, Ethanol, Government, Legislation, News, Research

E85 Viper Tries for Speed Record

Cindy Zimmerman

E85 ViperA Dodge Viper fueled with 85 percent ethanol will attempt to break a world speed record this week.

According to a media advisory, car enthusiast and entrepreneur Karl Jacob will attempt to break the world speed record for the standing mile in his street-legal, biofuel powered 1100hp E85 Dodge Viper. The attempt will be made on April 11 at the Mojave Air and Space Port in Mojave, Calif.

During the process of converting the Dodge Viper SRT-10, Jacob discovered that ethanol was not only a viable source for a high performance vehicle but could provide optimal performance. Inspired by the benefits of E85 – it’s renewable, 85% alcohol, burns clean and has a minimal impact on the environment – Jacob’s goal is to make more people aware of the benefits of renewable fuels and to encourage them to consider ethanol in their own modifications.

“While one vehicle alone may not change the environment, it can help people understand the benefits of alternative and renewable fuel sources and influence them to think about what they can do to benefit the environment,” says Jacob. “Though some may not be ready to give up their passion for performance vehicles, the E85 Viper proves that they can continue pursuing their passion without having to rely on conventional fuel.”

Additional information on Jacob and the E85 Viper can be found at www.e85viper.com.

E85, Ethanol, Flex Fuel Vehicles, News

JAMA Warns Biodiesel Homebrewers to be Careful

John Davis

A brief report in the Journal of the American Medical Association (JAMA) points out that biodiesel is a substance that needs to handled carefully.

The article points out an incident in Colorado where a biodiesel homebrewer accidently left the heating element on while he left for the weekend. The resulting fire released biodiesel, recycled restaurant cooking oil, smaller amounts of glycerin and sodium hydroxide, and 1-gallon containers of sulfuric and phosphoric acid that seeped into the ground. There were no injuries or evacuations, but JAMA says that biodiesel should come from commercial sources:

Biodiesel usually is produced commercially; however, some persons in the United States and elsewhere produce biodiesel in their homes for personal use. Those who produce homemade biodiesel should be aware of the substantial risk for injury. Substances used in biodiesel production can be highly explosive (i.e., methanol) or corrosive (i.e., sodium hydroxide). If improperly handled, these substances can cause severe eye, skin, and upper respiratory irritation; chemical burns; and other serious injuries. During the preceding 10 years, almost all fires and injuries caused by home production of biodiesel of which the National Biodiesel Board (NBB) is aware were caused by improper handling of methanol during production.

Sounds like the old advice from Hill Street Blues… “Let’s be careful out there.”

Biodiesel

Eleven States Considering Biodiesel Requirement

John Davis

We’ve been trying to document all the different pieces of state legislation out there that have impacts on the biodiesel industry. This blog entry posted by John Gartner on Autopia – Wired News, I think, kind of sums up what the effects might be if the 11 states… Florida, Connecticut, Missouri, California, Oregon, Mississippi, Arkansas, Nebraska, Montana, Tennessee and New Mexico… raise their biodiesel requirements from two to five percent, and other states look at reducing taxes on biodiesel:

You can view this as interventionist government messing with the free market for both food and fuel. Or, you can say it is the states creating a minimum market that ensures interest from growers and refiners to establish demand that is necessary to battle oil dependency (for national security reasons) or for environmental purposes.

Another option would be that states (or the federal government) could use their purchasing power to create the market. If all government vehicles used only biofuels, it would provide the certainty that producers need while reducing the effect on the free market. This is done all of the time with emerging technologies, so it shouldn’t be a surprise if it happens here.

Well said.

Biodiesel, Legislation, Opinion

Ethanol on the Campaign Trail

Cindy Zimmerman

At least three GOP presidential candidates were talking about biofuels on Wednesday.

In his campaign kickoff address, Republican Tommy Thompson, former Governor of Wisconsin, noted that his state “saw the promise of ethanol and renewable energy far before it was fashionable.”

On the environment and energy, America must become independent in its energy needs and break reliance on foreign oil. We must begin with greater investments in renewable energy, like ethanol, so we can bring these technologies to market faster and more efficiently. And we must come together and deal with our changing climate.

According to an Associated Press article, Republican presidential candidate Rudy Giuliani said during a visit to Florida that everything should be considered if the United States wants to break its reliance on foreign oil.

The former New York mayor cited Brazil’s use of ethanol as an example the United States should follow.

“Brazil’s a wonderful country, wonderful economy, wonderful scientific community – it’s not the United States of America. Why should they be ahead of us on ethanol? We should be ahead of them. That should be our goal,” he said.

If the United States concentrates on new or improved technologies for energy production, it can then turn around and sell them to countries like India and China who have a growing demand, he said.

Meanwhile, in Oklahoma, CNHI News Service reports that Sen. Sam Brownback (R-KS) voiced support for a new version of the Homestead Act that would “encourage capital investments in rural communities, which could include the production of corn or other ethanol-producing or alternative fuel-producing crops.”

Ethanol, News

Fuel From Fiber

Cindy Zimmerman

ValcoA reader alerted us to the impending opening of VALCO Bio Energy in Harlingen, Texas – the first plant to use cottonseed oil as a base stock for manufacturing biodiesel.

Valley Coop Oil Mill announced the project last fall and is expected to open the plant this spring.

Southeast Farm Press did a story earlier this year with Valco CEO Hollis Sullivan, who was at the Beltwide Cotton Conferences in New Orleans talking about the opportunities for biodiesel production to add value to cottonseed.

“An energy efficient plant is a goal,” said Sullivan. “We want to see what can be done. We can fill up trucks with bio-fuel when they bring in cotton. But we’re also looking for other opportunities. In 20 years, anyone who does not seize available opportunities will be left behind. We’re interested in adding anything that adds value to the crop.”

Sullivan said the Harlingen Co-op will be the first cottonseed mill with a bio-diesel plant. But he doesn’t expect it to be the only one. Anyone interested in following their lead, he said, “should do their homework. Study other bio-diesel plants and either build close to the raw material or make arrangements for a consistent supply.”

Biodiesel

Florida E10 Hold Up

Cindy Zimmerman

Marathon OilDespite the support of Florida’s commissioner of agriculture for biofuels production, despite two recent ethanol history-making races held in the Sunshine State, and despite a new campaign that “Florida Needs Ethanol” – a bureaucratic snag is keeping Marathon Oil from blending and distributing 10 percent ethanol-enhanced fuel in Florida.

According to an article in the St. Petersburg Times, Marathon and the state department of agriculture are “at an impasse.”

Florida’s Department of Agriculture and Consumer Services says it is unwilling to tweak state regulations until it gets scientific data to satisfy a fuel vapor issue, which officials fear could cause vehicles to stall in hot weather.

Marathon wants the state to modify the standard so its fuel would comply. The Houston-based company points to other states where regulations have been modified to suit E10 suppliers. Among them are Arkansas and Louisiana, which have climates similar to Florida’s.

Ethanol, Government, News

Fueling North Carolina’s Future

Cindy Zimmerman

NC Capitol The North Carolina General Assembly is considering a sweeping statewide strategic plan to strengthen North Carolina’s future in biofuels development and use.

According to a release from the North Carolina Biotechnology Center:

The 16-page document, “Fueling North Carolina’s Future: North Carolina’s Strategic Plan for Biofuels Leadership,” is the culmination of a seven-month process involving more than 70 leaders from across the state representing industry, agriculture, academia and government.

Significantly, the plan calls for North Carolina to bypass corn for its ethanol feedstock. Though corn is increasingly used in the Midwest, the plan notes that North Carolina can’t efficiently grow enough corn to meet its fuel needs. Instead, it should tap the best of its own agricultural and industrial infrastructure to develop so-called cellulosic ethanol, using enzymes from companies such as Novozymes, in Franklinton, to efficiently break down wood waste, barley, soybeans, sweet potatoes, switchgrass and possibly even crops not yet identified.

Cellulosic, Ethanol, Government, News