USDA Officials Provide Details of Support Package for Farmers

U.S. Secretary of Agriculture Sonny Perdue and other agency officials today announced further details of the $16 billion package “aimed at supporting American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals.”

In May, President Trump directed Secretary Perdue to craft a relief strategy in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions. The Market Facilitation Program (MFP), Food Purchase and Distribution Program (FPDP), and Agricultural Trade Promotion Program (ATP) will assist agricultural producers while President Trump works to address long-standing market access barriers.

Secretary Perdue was joined by Under Secretary Bill Northey; Acting Deputy Under Secretary Brandon Lipps; and USDA’s Chief Economist, Dr. Rob Johannson to explain the details of the package, which will help producers of a wide variety of commodities impacted by trade disruptions.

USDA provides new trade aid details

Agricultural organizations reacted positively to the announcement. “While we are grateful for the continuing support for American agriculture from President Trump and Secretary Perdue, America’s farmers ultimately want trade more than aid. It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world,” said American Farm Bureau Federation president Zippy Duvall.

Under the plan, eligible U.S. pork producers will receive $11 per head based on inventory between April 1-May 15, 2019 and USDA will make pork purchases of $208 million to support its programs for the food insecure. National Pork Producers Council President David Herring says they “are grateful to the Trump administration for providing partial relief as hog farmers have incurred significant losses due to trade disputes that have lingered for more than a year.”

National Corn Growers Association (NCGA) President Lynn Chrisp says farmers definitely need aid at this time. “It’s no secret that farmers are facing difficult decisions amid wet spring weather, trade disputes and tariffs, and demand destruction in the ethanol market. While NCGA’s focus remains markets, we welcome USDA’s quick rollout of MFP 2.0 and the Department’s creative efforts to reorient MFP to better reflect market impacts and support American farmers. We look forward to learning more about how MFP will work for corn farmers.”

AgWired Animal, AgWired Energy, AgWired Precision, Audio, NCGA, USDA

REG to Close New Boston, Texas Biodiesel Plant

Cindy Zimmerman

Renewable Energy Group (REG) is closing its New Boston, Texas biorefinery “due to challenging business conditions and continued federal policy uncertainty, most notably the long-lapsed federal biodiesel tax credit.”

The company acquired the 15-million gallon per-year biodiesel plant near Texarkana, Texas in October 2012 and began producing biodiesel there several months later. The facility is capable of running both high and low free fatty acid feedstocks and has truck and rail access.

“We truly appreciate all the efforts of our team and those that support our New Boston plant,” said Brad Albin, Vice President of Manufacturing. “They significantly improved safety, demonstrated capacity, yield, quality and costs. However, these improvements could not overcome the unfavorable economics of the plant relative to our other options for ongoing focus and forward investment.”

The company is currently working with plant employees on relocation opportunities within the production network.

“This closure comes today as a result of the poor economics over the last 18 months resulting in large part from the uncertainty surrounding the Biodiesel Tax Credit,” said Cynthia J. Warner, REG President and CEO. “Despite significant bipartisan support, Congress’ inaction on this value-added incentive has led to unsustainable market conditions.”

Biodiesel, REG

Energy Secretary Contradicts EPA in Letter to Senator

Cindy Zimmerman

Sen. Chuck Grassley (R-IA) finally got an answer this week from the Department of Energy to a request he sent in April about the agency’s role in Small Refinery Exemptions, and it directly contradicts what the Environmental Protection Agency has been saying.

Contrary to assertions by the EPA, the Energy Department confirmed in a letter to Senator Chuck Grassley (R-Iowa) that the EPA has issued so-called “economic hardship” exemptions under the Renewable Fuel Standard (RFS) to small refineries, often owned by billion-dollar oil companies, even when the Energy Department found that the refineries faced little or no actual “hardship.”

In a response to an April 10 letter from Grassley, Secretary of Energy Rick Perry outlined the role of the Energy Department in the issuance of these waivers and indicated EPA has on at least one occasion issued an exemption when the department recommended no exemption and has ignored recommendations to grant only partial exemptions in other cases. Perry also indicated that the department has not changed how these analyses are applied or scored from the prior administration.

Renewable Fuels Association (RFA) President and CEO Geoff Cooper says the letter clearly shows EPA ignored the recommendations and analysis provided by DOE. “The demand destruction that has resulted from these exemptions has been real and significant,” said Cooper. “Ethanol producers and the corn farmers who supply our industry are facing some of the worst market conditions in a generation, and these small refinery bailouts are largely to blame for that. We urge President Trump and Administrator Wheeler to restore some integrity and judiciousness to the small refiner exemption program, and ensure that any exempted renewable fuel blending requirements are redistributed to non-exempt refiners.”

Cooper said the letter also corroborates information recently uncovered through a Freedom of Information Act request filed by RFA, in which a former EPA official warned former Administrator Scott Pruitt that granting certain exemptions “would be a clear violation of Mr. Pruitt’s oath of office.” Other information uncovered in the FOIA request shows the White House knew exemptions were being granted without any demonstration of “true economic hardship.”

EPA, Ethanol, Ethanol News, RFA

BP and Bunge Grow Biofuels Business in Brazil

Cindy Zimmerman

BP and Bunge have formed a 50:50 joint venture to create a world-scale producer of sugarcane ethanol in Brazil, BP Bunge Bioenergia. BP will combine its Brazilian biofuels and biopower businesses with that of Bunge and BP’s interest in the new venture will grow its existing biofuels business by more than 50 percent.

Brazil is the world’s second largest and most integrated market for ethanol as a transportation fuel with demand forecast to grow rapidly. The majority of vehicles in the country – around 70% – are already able to run on ethanol and the country’s demand for ethanol is estimated to increase by around 70% by 2030.

BP Bunge Bioenergia will have 11 biofuels sites in Brazil. With 32 million metric tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar. It will also generate renewable electricity – fuelled by waste biomass from the sugar cane – through its cogeneration facilities to power all its sites and sell surplus electricity to the Brazilian power grid. BP and Bunge’s assets are largely complementary, with sites in five Brazilian states including three in the key region of São Paulo.

biofuels, Brazil, Ethanol, Ethanol News, International, sugarcane

Ethanol Report on Current Issues

Cindy Zimmerman

While the rest of us are filling up on E15 to fuel our summer vacations, the Renewable Fuels Association is having a busy summer keeping up with the latest EPA actions impacting ethanol.

In this edition of “The Ethanol Report,” RFA president and CEO Geoff Cooper discusses preparing for the July 31 public hearing on the proposed 2020 volume obligations, waiting on EPA to make a decision about more Small Refinery Exemptions, and when the agency will propose the RFS reset rule.

Ethanol Report on Current Issues

Subscribe to the podcast via iTunes

Audio, Ethanol, Ethanol News, Ethanol Report, RFA

MN Biofuels Releases Mid Year Report

Cindy Zimmerman

MN Biofuels executive director Tim Rudnicki and president Brian Kletscher

The Minnesota Bio-Fuels Association (MN Biofuels) released its 2019 First Half Report last week, giving an overview of Minnesota’s ethanol industry in the first six months of 2019 and what they have been doing to help increase ethanol consumption in the state.

MN Biofuels executive director Tim Rudnicki says the report highlights projects in the fields of advocacy, communications and fuel supply in the first half of 2019.

During that period, Rudnicki said MN Biofuels directly engaged with over 58 state and federal lawmakers and agency officials, delivered more than 1.5 million monthly ad impressions promoting E15 in the Twin Cities metro and continued market development initiatives with many of the 352 fuel retailers offering E15 in Minnesota.

Additionally, he said the lifting of the summertime Reid Vapor Pressure (RVP) ban on E15 had presented new opportunities.

“This year, as of May 31, E15 sales in Minnesota have hit 29.26 million gallons and with E15 now available throughout the summer, we have launched several promotional campaigns aimed at further increasing E15 consumption this year. Moreover, with E15 now available year-round, there will be new opportunities to increase the number of fuel retailers who offer E15 in Minnesota,” Rudnicki said.

Read the MN Biofuels 2019 First Half Report.

Ethanol, Ethanol News

REG Opens Retail Station in Illinois

Cindy Zimmerman

Renewable Energy Group, Inc. this week celebrated the grand opening of the company’s first diesel fueling station in Seneca, Illinois.

“This diesel fueling station is another example of how REG is moving fuel forward by expanding our capabilities,” said Cynthia J. Warner, REG President & CEO. “It gives us another avenue of getting our high quality, clean fuel to new and existing customers.”

REG Seneca, a 60 million gallon-per-year biorefinery located adjacent to the fueling station, will provide the low carbon biodiesel used in the diesel blends between B11 and above.

“More than 17,000 trucks go through REG Seneca each year,” said Gary Haer, Vice President of Sales and Marketing. “We are thrilled that those who help support our industry and the local community can fuel their vehicles right here at this station.”

REG Seneca has been producing biodiesel for over a decade and currently operates with 53 employees in addition to the hundreds of other jobs indirectly supported in agriculture, transportation and energy sectors. The Seneca plant also adds approximately $75 million into the Illinois economy through the purchasing of feedstocks. Last year, biodiesel produced at REG Seneca reduced approximately 556,000 metric tons of CO2 compared to emissions from petroleum diesel.

Biodiesel, REG, Retailers

Japan Receives First Shipment of ETBE from U.S. Ethanol

Cindy Zimmerman

The U.S. Grains Council reports a new milestone in the effort to develop new export markets for U.S. ethanol with the first shipment of ethyl tert-butyl ether (ETBE) made with U.S. corn-based ethanol arriving in Japan.

The sale of ETBE, a gasoline component, was made following a policy change by the Japanese government recognizing the positive greenhouse gas (GHG) benefits. The shift allows for U.S. corn-based ethanol to be eligible for production of ETBE brought into Japan, in addition to sugarcane-based ethanol.

Japan will now allow U.S. ethanol to meet up to 44 percent of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons of U.S.-produced ethanol annually. Japan imports nearly all ETBE from ethanol it uses.

The first ETBE shipment from the United States, purchased by Japan Biofuels Supply LLP, unloaded at Chiba port near Tokyo and then Wakayama port near Osaka. The shipment of 13.5 million gallons represents 2 million bushels of corn demand.

The USGC has been working with ethanol organizations and corn growers to demonstrate the benefits of U.S. ethanol to Japanese officials and members of the Japanese fuel industry, providing detailed scientific information about U.S. ethanol’s production processes and the improvements in carbon intensity. Japan approved use of U.S. ethanol as an oxygenate in April 2018.

Ethanol, Ethanol News, Exports, RFA, USGC

ZimmCast 621 – Ag Media Summit/IFAJ Congress Preview

chuck zimmerman

This week we have a preview of the upcoming 2019 Ag Media Summit and International Federation of Agricultural Journalists Congress in Minneapolis/Bloomington, Minnesota. This is the largest gathering of agriculture’s top writers, editors, photographers, publishers and communication specialists in the U.S. This year’s dates are July 26-31 for the Congress with AMS overlapping on July 27-31. The last time the two programs were held together was in 2009 in Fort Worth, Texas.

The annual Ag Media Summit includes AAEA The Agricultural Communicators Network, the Livestock Publications Council and the Connectiv Agri-Media Committee. With the addition of IFAJ, more than 700 media and communications professionals are expected to attend.

To help me preview the events I spoke with Carey Brown, Kentucky Cattlemen’s Association and co-chair of the coordinating committee for the events.

Listen in to our conversation. I hope you enjoy it and hope to see you there in a week or so!

Listen to the ZimmCast here: Preview of Ag Media Summit & IFAJ Congress

AgWired Animal, AgWired Energy, AgWired Precision, Audio, ZimmCast

New Studies Show Ethanol GHG Benefits

Cindy Zimmerman

Two new studies released this week provide further evidence that grain-based ethanol is significantly reducing greenhouse gas emissions and call into question the reliability of recent “land use change” analyses based on flawed satellite imagery-based methodologies, according to the Renewable Fuels Association (RFA).

The first new study, conducted by the Laboratory for Applied Spatial Analysis at Southern Illinois University Edwardsville (SIUE-LASA), exposes fundamental flaws in satellite imagery-based research regarding land use change that was quoted in the EPA’s Second Triennial Report, released in 2018. SIUE-LASA’s review of the data sets and methodologies that were used in the prior research revealed some remarkable errors.

In one example, a body of water was misclassified as deciduous forest and grass pasture, underscoring why the research based on this data should not be used for regulatory decision-making.

The second new study, a worldwide meta-analysis funded in part by the Department of Energy and USDA, determined that corn residue (“stover”) retained on fields—which is the common practice—results in the sequestration of approximately 0.41 metric ton of carbon per hectare per year in the soil. This implies not only that the carbon intensity of corn-based ethanol is significantly below current estimates by EPA, the California Air Resources Board, and others, but also that leaving more residue on the field can have a larger carbon benefit than significant removal and conversion of the residue into ethanol.

Based on this research, properly accounting for the soil carbon sequestration benefits of corn production would reduce the existing lifecycle “carbon intensity score” of corn ethanol by some 20-25 percent, meaning most dry mill corn ethanol produced today would result in a 50-65 percent GHG savings compared to gasoline.

“As the Environmental Protection Agency considers the GHG impacts of expanded ethanol consumption under the Renewable Fuel Standard, we urge them to strongly consider the latest science and data regarding ethanol’s tremendous carbon benefits,” said RFA President and CEO Geoff Cooper. “At the same time, we implore EPA to exercise great caution and prudence when considering the results of flawed land use change studies reliant on data from satellites that, frankly, can’t tell the difference between a pasture and a parking lot.”

View the SIUE report
View the DOE study

corn, EPA, Ethanol, Ethanol News, RFA, RFS