Increasing Profit Margins for Ethanol

Ethanol production has become a key market for U.S. corn, but margins are often tight. New technology would allow existing ethanol plants to convert a part of their production into making plant-based chemicals that have higher values, with profits that could be passed along to corn growers.

“We know that ethanol today is a commodity that has been really pressed down with pricing and margins,” said Joaquin Alarcon, President and CEO of Catalyxx. “So, this technology allows a plant to convert part of their production into chemicals that have higher value and provide significant profits related to that.”

Alarcon told participants at the 2018 Corn Utilization and Technology Conference in St. Louis that higher end butanol and other alcohols are examples of fuels that could provide at least $1.00/gallon of additional profit to the ethanol producer. Alarcon said it’s an exciting prospect as these are green, renewable chemicals with a cost of production that is the lowest in the industry. He said a facility could be built onto an existing ethanol plant or as a standalone processor that would transport ethanol from the Midwest.

To learn more, listen to Chuck’s interview here: Interview with Joaquin Alarcon at CUTC18

2018 Corn Utilization & Technology Conference Photo Album

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Planted Acreage Report Surprises

USDA’s planted acreage report out Friday contained some surprising numbers for the trade.

The National Agricultural Statistics Service (NASS) estimates 89.6 million acres of soybeans planted in the United States for 2018, down 1 percent from last year, and corn area planted is estimated at 89.1 million acres, also down 1 percent from last year.

All cotton planted area for 2018 is estimated at 13.5 million acres, 7 percent above last year, and all wheat planted area for 2018 is estimated at 47.8 million acres, up 4 percent from last year.

NASS also released the quarterly Grain Stocks report Friday:

• Soybeans stored totaled 1.22 million bushels, up 26 percent from June 1, 2017. On-farm soybean stocks were up 13 percent from a year ago, while off-farm stocks were up 33 percent.
• Corn stocks totaled 5.31 billion bushels, up 1 percent from the same time last year. On-farm corn stocks were down 3 percent from a year ago, but off-farm stocks were up 7 percent.
• All wheat stored totaled 1.10 billion bushels, down 7 percent from a year ago. On-farm all wheat stocks were down 32 percent from last year, while off-farm stocks were down 2 percent.
• Durum wheat stored totaled 35.9 million bushels, down 1 percent from June 1, 2017. On-farm stocks of Durum wheat are down 19 percent from June 1, 2017. Off-farm stocks of Durum wheat were up from the previous year by 17 percent from a year ago.

Jack Scoville of The PRICE Futures Group provided commentary for the MGEX Crop Report Conference Call. “A very interesting report – farmers planted a lot more of everything than anybody thought,” said Scoville on the call. “Corn planted area…is well above the average trade guess – really above all trade guesses.”

Listen here: MGEX 6-29-18 Crop report call with commentary from Jack Scoville, PRICE Futures Group

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Driving Ethanol Podcast on EPA Actions

Cindy Zimmerman

EPA’s proposed rule for 2019 biofuel obligations under the Renewable Fuel Standard (RFS) maintains conventional renewable fuel volumes at 15-billion gallons and increases the advanced biofuel standard by almost 600 million gallons over 2018, which looks good on the surface, but fails to assure that those gallons will actually be blended.

In this edition of the Driving Ethanol podcast, Growth Energy Vice President of Regulatory Affairs Chris Bliley discusses the proposal and EPA’s continued granting of small refinery exemptions.

Growth Energy Driving Ethanol Podcast 6-29-18

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Ethanol Production Continues Strong

Cindy Zimmerman

U.S. ethanol production is continuing at a strong and steady pace, hitting a new four week high for the year, according to the latest Energy Information Administration data analyzed by the Renewable Fuels Association.

Last week, ethanol production averaged 1.072 million barrels per day (b/d) or 45.02 million gallons daily. Output grew 8,000 b/d over the week before, climbing to a 26-week high. The four-week average for ethanol production lifted to 1.057 million b/d, which is the highest this year, for an annualized rate of 16.20 billion gallons.

Stocks of ethanol were 21.7 million barrels. That is a 0.5% draw down from last week.

There were zero imports recorded for the 29th week in a row.

Ethanol, Ethanol News, RFA

Growth Energy Reacts to EPA Proposal

Cindy Zimmerman

Growth Energy remains committed to making sure the Renewable Fuel Standard moves forward, despite EPA’s proposed volumes for 2019 that essentially move the program backward.

Growth Energy Vice President of Regulatory Affairs Chris Bliley says EPA’s proposal this week for 15 billion gallons for conventional biofuels in 2019 fails to ensure those gallons will, in fact, be blended. “By neglecting to reallocate gallons that were lost to small refiner waivers, basically EPA is doubling down on another year of an estimated 1.5 billion gallons in destruction of demand,” said Bliley. “What it essentially does is roll us back to a time, probably five years ago, when we were 13.5 billion gallons of blending.”

Bliley comments on the proposal, and to news that EPA Administrator Scott Pruitt may have been wrong about the Department of Energy’s role in granting refinery exemptions, in this interview:
Interview with Chris Bliley, Growth Energy, on EPA 2019 RVO proposal

Audio, EPA, Ethanol, Growth Energy, RFS

Corn Growers Winning with Enogen

Cindy Zimmerman

Corn prices are barely at break-even levels right now, so every advantage a grower can get to make a little extra per bushel is well worth it these days.

Steve Stenzel of Hamburg, Iowa has been growing Enogen corn for four seasons now and he says it has worked out very well for him. “We’ve been very happy with the yields and the premium,” said Stenzel during an interview at the recent Iowa 250 NASCAR race presented by Enogen. He provides corn for two different ethanol plants in southwest Iowa. “I like the Enogen product in that farming is providing that enzyme (for the ethanol plant) that otherwise would be brought in commercially from another industry.”


Enogen corn farmers from several states attended the race earlier this month, courtesy of Syngenta, and most are looking at a corn crop right now that is rated as much as 86 percent good to excellent. With the possibility of yet another bin-busting crop, growers are pleased that Enogen corn offers the potential to earn up to a $.40/bu (on average) premium for grain delivered to the ethanol plant. Enogen corn is expected to generate approximately $28.5 million of additional revenue for local growers in 2018 through per-bushel premiums.

Listen to comments from a few growers and seed dealers at the race from Iowa, Nebraska, Minnesota, and North Dakota –
Comments from guests at Syngenta Enogen race

Interview with Steve Stenzel, Iowa Enogen corn farmer

NASCAR Xfinity Series Iowa 250 presented by Enogen Photo Album

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Report Contradicts EPA Chief

Cindy Zimmerman

EPA Administrator Scott Pruitt and NAFB president Tom Cassidy in April – photo credit Spencer Chase

Yet another revelation in the Environmental Protection Agency small refinery exemption saga came to light this week, thanks to the investigative journalism of Reuters, reporting Tuesday that EPA “consistently ignored recommendations from the Department of Energy (DOE) to reject or limit waivers to oil refiners seeking exemptions from the Renewable Fuel Standard (RFS).”

This contradicts what EPA Administrator Scott Pruitt has been saying for months now in claiming the agency is obligated to give waivers to refiners who meet certain objective criteria. “And oh by the way, DOE is involved in that,” Pruitt said during a meeting with members of the National Association of Farm Broadcasting (NAFB) in April. “What’s happened historically, that has not worked well, is that DOE and EPA have not been working together collaboratively – we have. We use their data and we make informed decisions based upon their data.”

Listen here: Pruitt defends small refinery exemptions

Pruitt said the same thing when he met with farmers and ethanol producers in the Midwest earlier this month, leaving many now questioning his credibility.

“Administrator Pruitt just finished telling crowds of struggling farmers that the massive increase in EPA handouts wasn’t driven by his loyalty to a few wealthy refiners,” said Growth Energy CEO Emily Skor. “In fact, those waivers are at odds with everything we hear from the Department of Agriculture, President Trump, and now the Department of Energy.”

American Coalition for Ethanol (ACE) CEO Brian Jennings says, “Administrator Pruitt’s … less than truthful answer to farmers in South Dakota blaming the DOE for requiring EPA to hand out waivers like candy is the last straw. Disagreeing is one thing — lying to cover up something you did that impacts rural families’ livelihoods is another.”

Renewable Fuels Association CEO Bob Dinneen says Pruitt is “ignoring the Department of Energy, just as he’s ignoring the President of the United States – he doesn’t care.”

ACE, Audio, EPA, Ethanol, Ethanol News, Growth Energy, RFA, RFS

Ethanol Report on EPA RFS Proposal

Cindy Zimmerman

At one time, the ethanol industry would have been thrilled with the Environmental Protection Agency (EPA) proposal for 2019 RFS blending requirements, which maintains the 15 billion gallon statutory level for conventional biofuels and increases the levels for advanced biofuels. But that was before EPA Administrator Scott Pruitt started handing out small refinery exemptions like Halloween candy resulting in over 2.5 billion gallons of demand destruction – by EPA’s own admission.

Renewable Fuels Association president and CEO Bob Dinneen says he is especially infuriated because the announcement was delayed on Friday to change language in the proposal “that would have, at least for future small refinery waivers, created a more transparent process by which those gallons would have been reallocated.”

In this Ethanol Report, Dinneen reacts to the proposal, and to a Reuters report that EPA ignored Department of Energy recommendations to limit waivers. Ethanol Report on EPA Proposed 2019 RVOs

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EPA, Ethanol, Ethanol News, Ethanol Report, RFA, RFS

EPA Releases 2019 Biofuel Proposal

Cindy Zimmerman

The Environmental Protection Agency released its proposal for 2019 biofuel obligations under the Renewable Fuel Standard (RFS) Tuesday, maintaining the statutory level for corn ethanol while increasing advanced biofuels, but failing to address the small refinery exemptions that have decimated demand and effectively lowered the required amount of biofuels to be blended.

Under the proposed rule, conventional renewable fuel volumes would be maintained at the implied 15-billion gallon target set by Congress for 2019, the advanced biofuel standard would be increased by almost 600 million gallons over the 2018 standard – including an increase of 100 million gallons for the cellulosic biofuel standard and a 330 million gallon increase for the biomass-based diesel standard for 2020.

EPA is also “taking comment on a host of ways to improve market transparency, including by limiting who can participate in the Renewable Identification Number (RIN) market and the length of time a RIN can be held.”

The biofuels industry would be more pleased with the rule if it had addressed the gallons lost due to refinery waivers.

National Biodiesel Board VP of Federal Affairs Kurt Kovarik – “We welcome the Administration’s proposal to grow the biodiesel volumes, following two flatlined years. This is a positive signal for our industry and we’re pleased the EPA has acknowledged our ability to produce higher volumes…The fact remains, though, instability in the RFS program caused by the EPA has done significant damage that can only be rectified for biodiesel through consistent and predictable growth in volumes.”

American Coalition for Ethanol CEO Brian Jennings – “While EPA says it is proposing to maintain the 15-billion-gallon conventional blending target for 2019, in reality Administrator Pruitt’s ongoing actions will reduce ethanol blending far below 15 billion gallons…The proposal to modestly increase cellulosic and advanced RVOs for 2019 is welcome but EPA’s waivers and exemptions have collapsed RIN prices across-the-board discouraging investment in the production and use of cellulosic and advanced biofuels.

Growth Energy CEO Emily Skor – “The EPA proposed 15 billion gallons for conventional biofuels, but that still isn’t a real number we can count on. This plan fails to ensure those gallons will, in fact, be blended. By neglecting to reallocate gallons lost to waivers, the EPA is doubling down on another year of an estimated 1.5 billion gallons in demand destruction…The EPA cannot continue to enrich the largest oil companies and refiners at the expense of struggling U.S. farmers.”

Renewable Fuels Association CEO Bob Dinneen – “The proposal means nothing until EPA reallocates those lost gallons and sets forth a more transparent and rational process that assures small refinery waivers are not abused or granted unnecessarily. Unfortunately, over the past few days, Administrator Pruitt buckled yet again to pressure from the oil industry and removed language from this proposal that would have indicated the Agency’s interest in addressing what has clearly become an abused process.”

ACE, advanced biofuels, Biodiesel, biofuels, corn, EPA, Ethanol, Ethanol News, Growth Energy, RFA, RFS

Keeping Up With Corn Research

While the content shared during sessions at the 2018 Corn Utilization and Technology Conference was very technical, it was valuable to Mark Sponsler, Executive Director of the Colorado Corn Growers Association.

“Behind any market development effort, and at the root or the base of any new technology that represents market demand, there has to be a foundation of solid research,” Sponsler said.

Sponsler uses the opportunity to learn where the research is headed and what the future holds for corn and potential markets for corn. Whether it is the future of cellulosic ethanol or the development of corn-based products to replace those currently derived from petroleum, it’s information that Sponsler wants to know.

He said Colorado is like many other states that are looking to redefine the focus of research investments and sometimes choosing between funding production technology or product development. Often the budget of one state association is not big enough to do both. Sponsler said many times several states will work together on projects that expand markets for corn, using ethanol production and promotion as a prime example of that kind of effort.

Interview with Mark Sponsler, Colorado Corn Growers Association

2018 Corn Utilization & Technology Conference Photo Album

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