UN Calls for Easing of U.S. Ethanol Mandates

Joanna Schroeder

The concern over the American drought and the impact that ethanol production is having on corn prices has gone global. Jose Graziano da Silva, the director-general of the UN’s Food and Agricultural Organization, said that the easing of U.S. ethanol mandates could stave off another world food crisis.

In response, the Global Renewable Fuels Alliance  (GRFA) wrote, “While the current drought in the US Midwest has placed tremendous pressure on farmers, any action to reduce or eliminate the RFS would be premature and have immediate consequences in lost jobs and an increased reliance on crude oil imports.”

GRFA cited that the flexibility embedded in the Renewable Fuel Standard (RFS) is an effective way of reducing demand for corn during difficult time. U.S. ethanol production is down nearly 14 percent and refiners are holding an estimated 2.6 billion RFS credits that can be used to meet their compliance requirements.

Total grain output globally is expected to drop by 2.9 percent this year; yet, it is still estimated to be the second largest in history. Estimates show grain ending stocks 4% above the 10 year average.

National Corn Growers Association (NCGA) President Garry Niemeyer thanked farmers for having done so much to increase the corn supply. This year’s corn acres paralleled that in 1937; however, this year with advanced agronomic practices, new seed technologies and improved genetics, corn is able to withstand extreme conditions, such as heat and drought, better than ever before.

.”..we remain hopeful that above average yields in some areas will further augment the crop. At the same time, we recognize that it will not fully cover yield concerns.” Without these advanced technologies, said Niemeyer, the production losses would be much greater.

“As prices and emotions rise, so does the temptation to take action that might actually hurt us all in the long run,” added Niemeyer. “Right now, farmers, ranchers, ethanol producers and much of the country is suffering through this historic drought. Yet, we suffer together. We have all seen our investments, be they of time, hard work or resources, wither under the unrelenting heat. With empathy and a strong spirit of cooperation, we will come through these difficulties stronger for the experience and with renewed vigor to build a brighter future for ourselves, our industry and our country.”

Miscellaneous

Setting the Record Straight On Drought & RFS

Joanna Schroeder

The National Corn Growers Association (NCGA) is setting the record straight on the truth behind what would happen if the Environmental Protection Agency (EPA) allowed a waiver of the Renewable Fuels Standard (RFS2). Garry Niemeyer, NCGA president sent a letter to every member of the House of Representatives along with EPA Administrator Lisa Jackson, that included corrects inaccuracies.

“Unfortunately, the letter sent to EPA Administrator Jackson did not provide accurate information about the amount of corn used to produce ethanol or livestock feed,” Niemeyer stated in the letter. “Furthermore, it lacks a comprehensive description of the “burden of proof” required under the RFS waiver provisions. The letter relies on long discredited claims that opponents of the RFS have continued to reference in their on-going efforts to repeal the RFS.”

One of the pieces of misinformation according to Niemeyer is that research has shown that increased worldwide demand and the rising cost of oil and other inputs have had a much greater effect on the price of corn than the ethanol required by the RFS. NCGA believes it is premature for the EPA to waive the RFS at this point and until the harvest numbers are final, it is too early to determine how much corn will be available.

“It is important to remember that a Congressional majority wisely passed a renewable fuel standard that would work in both good and bad crop years,” Niemeyer said. “NCGA urges you to consider the benefits of the RFS to rural America, American energy security and the American farmer.”

Neimeyer also encouraged members of Congress to visit with farmers and community leaders to learn more about the important role they play for America.

Agribusiness, biofuels, corn, Ethanol, NCGA

Ag Secy Vilsack Stresses Support of RFS

Cindy Zimmerman

Agriculture Secretary Tom Vilsack demonstrated his strong commitment to the ethanol industry and the Renewable Fuel Standard (RFS) by spending over an hour at the American Coalition for Ethanol (ACE) conference on Friday morning.

“This is an industry that is worth supporting,” he told the crowd of about 250 ethanol industry leaders. “Which is why the president is supporting the Renewable Fuel Standard, and it’s why I’m supporting the Renewable Fuel Standard.”

In light of the lowered crop forecast for corn due to the drought, Vilsack noted that the RFS has built-in flexibilities and the market is responding as it should. “The market responds, the market reacts, the market pays attention, and we’re already seeing that,” he said.

Vilsack stressed the need for the industry to defend itself in the face of attacks by critics.

Listen to Vilsack’s remarks here: Secy Vilsack at ACE


2012 ACE Conference Photo Album

ACE, Audio, Ethanol, Ethanol News, RFS, USDA

Ethanol Producers: Report Doesn’t Justify RFS Waiver

John Davis

Today’s USDA crop report shows the nation’s corn crop will be down 13 percent from last year’s numbers. But the country’s ethanol producers say that should not justify any waiving of the Renewable Fuels Standard. Both the Renewable Fuels Association and Growth Energy put out statements this morning right after the report came out, and the RFA says we already knew the drought would take its toll on the crop:

“What this report does not do is provide justification for waiving the Renewable Fuel Standard for the rest of 2012. Given the abundance of RFS credits, ample ethanol stocks, and various other flexibilities, obligated parties under the RFS will have every opportunity to demonstrate compliance this year.”

RFA officials plan to hold a webinar next week to outline the report’s impact on U.S. ethanol production. Meanwhile, Tom Buis CEO of Growth Energy echoed RFA’s statement that we knew the drought would have an impact but predicted a big enough crop to meet demand:

“We will have enough corn – in fact, USDA’s report demonstrates how the market is already working to cut demand as they actually increased available corn stocks at the end of the year – showing over one billion bushels of corn surplus. Ethanol production is already down 15 percent in the last month alone. Any attempt to change the Renewable Fuel Standard, our nation’s successful biofuel policy would simply be a knee-jerk reaction to the benefit of Big Oil. The current policy has flexibility built in for exactly these types of situations.”

corn, Ethanol, Ethanol News

Corn & Soybeans Down in USDA Report

John Davis

The drought is certainly taking its toll on row crops, and that could be trouble for the nation’s biodiesel and ethanol makers. The latest USDA crop report out this morning shows that the corn harvest this year will be down 13 percent from last year’s numbers, with soybeans expected to be 12 percent lower than 2011.

Corn production is forecast at 10.8 billion bushels, down 13 percent from 2011 and the lowest production since 2006. Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011. If realized, this will be the lowest average yield since 1995. Area harvested for grain is forecast at 87.4 million acres, down 2 percent from the June forecast but up 4 percent from 2011.

Soybean production is forecast at 2.69 billion bushels, down 12 percent from last year. Based on August 1 conditions, yields are expected to average 36.1 bushels per acre, down 5.4 bushels from last year. If realized, the average yield will be the lowest since 2003. Area for harvest is forecast at 74.6 million acres, down 1 percent from June but up 1 percent from 2011.

Biodiesel, biofuels, corn, Soybeans, USDA

10 Ways Ethanol is Helping Livestock Producers

Joanna Schroeder

Despite the lack of rain that is occurring across the U.S. this summer, the Iowa Renewable Fuels Association (IFRA) has released a list of 10 ways ethanol producers are helping livestock farmers during the drought. IRFA says that although the drought is having a profound impact on crop production, because of ethanol production, there is larger corn crop and more flexible supply than ever available during other drought periods.

“Today’s USDA report confirms what we already knew – that the drought’s impact on supply and price will be felt by corn consumers around the world,” said IRFA Executive Director Monte Shaw. “Yet, the ag sector has seen droughts before, and it will survive again. This is a time when all of agriculture should pull together. Unfortunately, national livestock trade associations have chosen to politicize the on-going drought as part of their multi-year effort to return corn prices to $2 per bushel. At times like this, it is important to look past the rhetoric to the facts.”

During the American Coalition for Ethanol 25th Annual Conference, Cindy Zimmerman sat down with Shaw to discuss the call for a waiver of the Renewable Fuel Standard (RFS) with many of the calls coming from the livestock industry. They also discussed 10 ways ethanol producers are helping livestock producers during this tough time.

Monte Shaw interview at ACE

Ethanol helps all types of livestock producers. “We have a better price of corn. It makes them more competitive against the integrators,” explained Shaw. “But then we also have the distillers grains. And if you think about it, we planted 95 million acres of corn this year instead of 75 million because of ethanol. So yes, we’re taking a nasty hit from this drought and this is going to cause pain among all corn users, but we’re going to have a much bigger crop than we would have otherwise.”

“And then the ethanol industry returns that 20 million additional acres of protein goes straight to the livestock industry. So we have 20 additional acres of protein that would not be out in the market, the feed market, if it weren’t for the ethanol industry,” he added. Read More

Agribusiness, Audio, biofuels, corn, Ethanol, Iowa RFA

Herseth-Sandlin Honored with ACE President’s Award

Cindy Zimmerman

One of several awards given at the American Coalition for Ethanol (ACE) conference in Omaha on Thursday night was presented by the organization’s president to his daughter.

Lars Herseth had the honor of presenting the award to Stephanie Herseth-Sandlin, former Congresswoman from the state of South Dakota. She was honored for her dedication to the ethanol industry, both as a member of Congress and in private industry.

“It was certainly special to receive the award from my father and all the folks I’ve worked with over the past decade,” she said. “To receive such a distinction makes me feel great about my public service as well as my on-going advocacy that I’ve brought value to the table for all of their efforts.”

Herseth-Sandlin, a Democrat who served in Congress from 2004 to 2011, helped to shape energy policy at the time that included the current Renewable Fuel Standard (RFS). “Now it’s about making smart judgements in defending the RFS but looking for additional new opportunities,” she said. Those opportunities include the Urban Air Initiative, which she talks about some in this interview and will be discussed at the ACE conference on Friday.

Listen to my interview with Herseth-Sandline here: Stephanie Herseth-Sandlin
2012 ACE Conference Photo Album

ACE, Audio, Ethanol, Ethanol News

Part of the Proud History of ACE

Cindy Zimmerman

Back in 1987, a man by the name of Merle Anderson saw the need for a grassroots organization to support a new use for corn that would help farmers as well as the entire country. His vision became the American Coalition for Ethanol (ACE) and 25 years later, Merle is Chairman Emeritus of the organization he helped to found.

“When I found out about this ethanol thing, I got a religion that I was never able to shake,” Anderson said. “I could see that this was some way to balance demand for agriculture.”

Anderson is proud of what the ethanol industry has accomplished in 25 years but sorry it has taken so long. “I thought it was all going to happen a lot quicker than it actually has,” he said.

Merle, pictured here with his sweet wife Lee who has been at his side for nearly 69 years, gets frustrated by ethanol critics. “I think we’re getting a bum deal when we shouldn’t be,” he says, since it keeps us from sending more dollars overseas.

Anderson proudly notes that Lee is the only woman who has attended every single ACE meeting for the last 25 years and she’s happy to see how it has turned out. “I think they have gotten a long way, but there’s a lot of opposition and I wish them the best,” she said.

Listen to my interview with Merle and Lee here: ACE Founder Merle Anderson
2012 ACE Conference Photo Album

ACE, Audio, Ethanol, Ethanol News

ACE Marks 25 Years of Grassroots Ethanol History

Cindy Zimmerman

American Coalition for Ethanol (ACE) president Lars Herseth of South Dakota was pleased to welcome more than 250 ethanol industry representatives to the 25th annual meeting of the grassroots organization, with the theme of “Proud History, Bright Future.”

“We know that we have a challenging, though a bright future in front of us,” said Herseth, a livestock producer who strongly supports ethanol, noting that the current situation facing the industry due to the drought will be short-lived. “So certainly we don’t want to look at any rash decisions to solve a short term problem.”

Listen to his opening comments here: ACE president Lars Herseth

ACE Executive VP Brian Jennings says one of the characteristics that has defined the organization since 1987 is the need to “humanize” the benefits of ethanol. “The need for there to be a grassroots voice for ethanol is as critical today as it ever was,” said Jennings.

Discussing the attacks on the Renewable Fuel Standard (RFS) by critics in the face of this year’s drought, Jennings pointed out that there is no good reason to change it. “It’s the drought that’s the problem, not the RFS,” he said. “If they had the evidence that the RFS was causing severe harm to the economy, they would have convinced a governor by now to submit a valid petition to EPA and we would be well into the process.”

Jennings said the industry is very grateful for the support of Agriculture Secretary Tom Vilsack and Senator Chuck Grassley (R-IA) but wonders why other ethanol supporters have been so quiet lately. “We haven’t had enough of our champions come to our defense,” he said.

Listen to Jennings’ comments here: ACE Executive VP Brian Jennings

Vilsack and a few other supporters, like Sen. Ben Nelson (D-NE), will be at the ACE meeting tomorrow. Check out the photo album link and watch for updates from the conference.

2012 ACE Conference Photo Album

ACE, Audio, Ethanol, Ethanol News

Kansas Ethanol Producer Blames Drought for Shutdown

John Davis

A Kansas ethanol producer is blaming the drought for a shutdown coming this fall. Officials with East Kansas Agri-Energy, LLC in Garnett, KS announced they will temporarily suspend production operations beginning October 1st, 2012:

The company cited the prolonged drought conditions as having a negative impact on availability of corn and rising feedstock prices as the main reasons for the halt of production. Additionally, the demand for gasoline is down resulting in surplus ethanol stocks. These challenges led to the Company to reduce plant production capacity by 20 percent on April 1, 2012.

Bill Pracht, Chairperson of the board said, “We have studied the situation extensively and with the challenging economic conditions the Board of Directors has determined that it is in the best interest of the company and its shareholders to halt production at this time.”

“We will monitor the situation with the hope to resume production of the facility as soon as market conditions allow,” Pracht added.

The 42-million-gallon-a-year plant has been producing ethanol since 2005.

Ethanol, Ethanol News