Ethanol Report 4-16-20

Cindy Zimmerman

The social-distancing and stay-at-home restrictions associated with COVID-19 continue to take a devastating toll on U.S. ethanol producers with about half of the industry’s capacity now idled.

But the good news is how those ethanol producers, their farmer-owners and employees, have turned around and put those idled plants to good use by helping those on the front lines fighting the virus.

In this Ethanol Report podcast, we get an update from Renewable Fuels Association (RFA) president and CEO Geoff Cooper on how the industry is being impacted by the crisis, and we talk to KAAPA Ethanol CEO Chuck Woodside about what they are doing to help and keep their spirits up at the same time.

Ethanol Report 4-16-20 (23:11)

The Ethanol Report is a podcast about the latest news and information in the ethanol industry that has been sponsored by the Renewable Fuels Association since 2008.

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Ethanol, Ethanol News, Ethanol Report, RFA

ASA Hires Biofuels & Infrastructure Policy Lead

Cindy Zimmerman

The American Soybean Association (ASA) has hired Alexa Combelic to lead biofuels and infrastructure policy on its government affairs team starting May 4.

Combelic joins ASA as a Director of Government Affairs. Her portfolio will include biofuels and infrastructure, both of which are current priority issues for ASA. In her previous roles, Combelic has worked on a vast array of issues applicable to and of interest to soy, among them agriculture, transportation, energy, appropriations, labor, trade, environment and nutrition.

Combelic has served in various Hill staff roles the past 10 years, working for Members of both the House and Senate, and currently is legislative director for Congressman Joe Courtney of Connecticut.

ASA, Biodiesel, biofuels, Soybeans

Analysis Shows U.S. Agriculture Reducing Emissions

Cindy Zimmerman

American agriculture is more environmentally sustainably than ever.

A new analysis of updated data from both USDA and EPA shows U.S. farmers and ranchers continue to reduce per-unit greenhouse gas emissions. All told, the U.S. agricultural sector accounts for less than 10% of total U.S. emissions. That’s less than the emissions from the transportation, electricity generation and industrial sectors. Globally, agriculture accounts for about 24% of GHG emissions.

At the same time, American farmers are producing more crops on fewer acres, according to an analysis of USDA data. When compared to farm production in 1990, U.S. farmers would have needed almost 100 million additional acres to grow the same amount of corn, cotton, rice, soybeans and wheat they harvested in 2018.

The analysis builds on data shared during the launch of Farmers for a Sustainable Future (FSF), a coalition of agriculture groups aimed at educating lawmakers and finding solutions to challenges posed by climate change. The gains farmers have made in reducing their environmental footprint have been significant, and FSF supports federal investment in innovation, science-based research, voluntary conservation programs, resilient infrastructure, and incentives to assist farmers in furthering these efforts.

“Corn farmers are proud of their successful efforts to improve soil, water and air quality,” said Kevin Ross, president of the National Corn Growers Association, an FSF member. “These efforts are paying off in increased carbon sequestration and carbon retention in the soil, which helps offset agriculture’s relatively low contribution to U.S. greenhouse gas emissions.”

Read more from AFBF

AFBF, Ag group, corn, Environment, Farming, Sustainability

New York Biofuel Plant Supplies Ethanol for Sanitizer

Cindy Zimmerman

Western New York Energy (WNYE), New York’s only operational ethanol facility, is supplying corporations across the Northeast and Canada with ethanol to produce 80% antiseptic alcohol sanitizer amidst the COVID pandemic.

The plant is producing over 100,000 gallons a day of tech-grade ethanol for businesses that halted operations to meet the urgent sanitizer needs of hospitals and at-risk communities. WNY Energy generates over 60-million gallons of biofuel annually, using 20-million bushels of corn. The $90-million facility was the first biofuel company in the northeastern U.S.

“WNYE has also established a manufacturing and distribution network that will exponentially increase the production of antiseptic sanitizers made from our farmers’ corn. All the sanitizer and sanitizer products will be made in Western New York and the United States,” Tim Winters, WNYE President & CEO, said. “We could do none of this without support from farmers, our partners for the past 13 years. Corn ethanol is the key ingredient in making 80% antiseptic sanitizer. Farmers are as essential to WNYE’s operation as they are to America’s food supply – their contributions sustain this nation.”

Ethanol, Ethanol News

Biofuels Caucus Urges USDA to Help Ethanol Producers

Cindy Zimmerman

The bipartisan House Biofuels Caucus today sent a letter urging Secretary of Agriculture Sonny Perdue to utilize funds made available to USDA as part of the recently passed CARES Act to assist ethanol producers who are suffering severe economic harm as a result of the COVID-19 global pandemic.

“The biofuels sector provides a direct and significant boost to the value of corn and soybeans,” said the letter signed by 32 U.S. Representatives. “Ethanol plants purchase two out of every five bushels of U.S. corn and biodiesel producers use over 8 billion pounds of soybean oil a year. Ethanol plants produce dried distillers grains (DDGs) as a byproduct, providing livestock farmers with a low-cost, high-protein component of animal feed.”

Renewable Fuels Association (RFA) President and CEO Geoff Cooper thanked the caucus members for their support of the industry. “The thirty-two Members of Congress who signed this letter recognize the important role ethanol plays in the economic stability of rural America, and they understand it is a necessity to support farmers and commodity markets by allowing funds recently allocated to USDA to protect the ethanol industry’s workforce. Even as gasoline demand is devastated by national and global stay–at–home orders, ethanol remains the single most important value-added market for farmers. We cannot allow this critically important industry to be further imperiled, and these House members should be applauded for their efforts to protect the 350,000 jobs supported by the ethanol industry.”

Ethanol, Ethanol News, RFA

Green Plains Donates 5,000 Gallons of Ethanol

Cindy Zimmerman

Iowa ethanol producer Green Plains Inc. is the latest to donate ethanol to the state of Iowa for its hand sanitizer production project with Iowa Prison Industries (IPI).

The Iowa Renewable Fuels Association (IRFA) reports that Green Plains Inc. donated 5,000 gallons this week, following recent donations of ethanol from Southwest Iowa Renewable Energy and Absolute Energy and a donation of glycerin by Western Iowa Energy. IPI has already produced over 10,000 gallons of hand sanitizer and is producing approximately 4,500 gallons a week.

“It’s incredible to watch this project grow as Iowa ethanol producers continue to step up to fight the spread of COVID-19,” said IRFA Executive Director Monte Shaw. “Given the hurdles that initially stood in the way of the success of this project, we are proud to see Iowans coming together to help however they can. We applaud Governor Reynolds and Iowa Prison Industries for working to make this production of hand sanitizer possible.”

Governor Kim Reynolds launched the program last month to leverage Iowa’s ample production of ethanol and glycerin, a coproduct of biodiesel, in the effort to relieve the national hand sanitizer shortage. Her office and IPI worked through regulatory and supply challenges to secure other necessary ingredients for FDA’s approved hand sanitizer formula and launch the production. The hand sanitizer IPI produces is being distributed for free by the state for priority use in locations such as the Iowa Veterans Home and DHS childcare facilities.

Ethanol, Ethanol News

President Trump Says Help for Farmers Coming Soon

Cindy Zimmerman

During the daily White House Coronavirus Task Force briefing on Thursday, President Donald Trump said help for hurting farmers is coming soon.

“We have money going out to our farmers in the pretty near future,” said President Trump. “The farmers got hurt very badly by all of this. People are eating less from the standpoint that there’s no restaurants that are open, no businesses are open, no hotels are open, they’ll start to come back, but we’re going to be helping out our farmers.”

President Trump on coronavirus aid for farmers (:25)

Closed restaurants and hotels, along with schools and other large operations that require food service, are the main reason that food prices are plummeting because they are no longer buying milk, meat, fruits, vegetables and other food.

According to the American Farm Bureau, nearby futures prices for nearly all the major crops have dropped by double-digit percentages. Pushed down by a 40% plunge in ethanol prices, corn prices have fallen 15%. Soybean prices are down 10%, while the price for cotton, which is heavily dependent on foreign manufacturing capacity, sank nearly 30%. Buoyed by demand in the U.S. and China, wheat prices have declined only 3%.

On the livestock front, since the beginning of the year, both beef and pork futures prices have declined more than 30%. Milk futures prices have also fallen sharply, with the price for milk used to make cheese down 28% and the price for milk used to make nonfat dry milk falling by 34%.

AFBF, Audio, corn, Ethanol, Government

USDA Lowers Corn for Ethanol Outlook

Cindy Zimmerman

COVID-19 took its toll on the April World Agricultural Supply and Demand Estimates released Thursday, especially for corn and soybeans.

This month’s 2019/20 U.S. corn outlook is for reduced imports, greater feed and residual use, lower food, seed, and industrial use, and larger stocks. Feed and residual use is raised 150 million bushels to 5.675 billion. This is based on corn stocks reported as of March 1 which indicated disappearance during the December-February quarter rose about 4 percent relative to a year ago. Lower forecast corn used for ethanol also supports larger feed and residual use. Corn used to produce ethanol is lowered 375 million bushels to 5.050 billion based on the latest indications from Energy Information Administration data indicating an unprecedented decline in ethanol production and motor gasoline consumption as a result of COVID-19. Partly offsetting is a forecast increase in the amount of corn used for alcohol for beverages and manufacturing use.

The decline in ethanol production is being felt in the livestock feed sector with less production of distillers grains. “Domestic soybean meal use is forecast higher with an expected reduction in available supplies of DDGs resulting from lower ethanol production. With higher crush only partly offsetting lower exports, seed, and residual use, ending stocks are projected at 480 million bushels, up 55 million.”

corn, Distillers Grains, Ethanol, Ethanol News, Soybeans, USDA

Ethanol Production Hits Record Lows

Cindy Zimmerman

The latest EIA Weekly Petroleum Status Report for the week ending April 3 hit some very troubling record lows as a result of the deepening impact on the ethanol industry from the social-distancing and stay-at-home restrictions associated with COVID-19.

According to EIA data analyzed by the Renewable Fuels Association, ethanol production plunged 20.0%, or 168,000 barrels per day (b/d), to 672,000 b/d—the lowest level since the EIA began reporting ethanol production statistics in 2010. Production was 33% below the same week in 2019. The four-week average ethanol production rate fell 9.5% to 888,000 b/d, equivalent to an annualized rate of 13.61 billion gallons.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, hit a record low of 5.065 million b/d (77.65 bg annualized), the smallest volume since the beginning of EIA’s dataset in 1991. Refiner/blender net inputs of ethanol slumped to 502,000 b/d, equivalent to only 7.70 bg annualized, down over 45% from last year to the lowest level on record.

Meanwhile, ethanol stocks are hitting record highs, up 5.3% to a record 27.1 million barrels.

Ethanol, Ethanol News, RFA

10th Circuit Court Rejects Request for Rehearing

Cindy Zimmerman

The 10th Circuit Court of Appeals has rejected the request for a rehearing that was filed by two oil refining companies in response to the court’s unanimous decision Jan. 24 in Renewable Fuels Association et al. v. U.S. Environmental Protection Agency. The court found that EPA abused its statutory authority in issuing Renewable Fuel Standard compliance exemptions to small refineries and overturned three specific exemptions.

“We are pleased the 10th Circuit Court acted so quickly to deny the refiners’ baseless request for a rehearing,” said RFA President and CEO Geoff Cooper. “It’s time for EPA to immediately implement the 10th Circuit decision nationwide, starting with the pending 2019 petitions. There are no excuses left for further delaying implementation of this important decision that helps restore integrity to the Renewable Fuel Standard.”

American Coalition for Ethanol (ACE) CEO Brian Jennings said this is an opportunity for EPA to restore some certainty for the industry. “We always believed the appeal by HollyFrontier and CVR had no merit. Now, we fully expect EPA to comply with the law and end its mismanagement of the RFS. The economic fall-out of COVID-19 is causing substantial damage to the ethanol industry, and in this world filled with so much uncertainty, EPA can provide some much-needed certainty to the RFS by applying the Tenth Circuit Court precedent nationwide.”

ACE, EPA, Ethanol, Ethanol News, RFA