New Corn Growers CEO Wants to Grow Demand

ncga-novakNew National Corn Growers Association (NCGA) CEO Chris Novak talked about challenges facing the corn industry as he visited with members of the agricultural media during the National Association of Farm Broadcasting convention last week in Kansas City.

“Lots of big challenges ahead for us,” said Novak, who just took over the CEO job for Rick Tolman who retired last month. “Looking at a record crop and lower prices than we’d like to see but that’s an opportunity as well.”

Novak sees increasing demand as the most important challenge and opportunity for the industry. “How do we ensure that with a second record crop in a row that we’ve got the demand that can keep our farmers profitable?” he said. The primary demand sectors – livestock, ethanol and exports – all offer new growth potential.

“Certainly EPA’s support and implementation of the renewable fuels law as passed by Congress is going to be important to us in the short term,” he added. “Longer term we’re looking to build consumer demand for a renewable fuel that increases our energy independence and helps reduce greenhouse gases.”

Chris Novak previously served many years as chief executive officer of the National Pork Board and prior to that, he was executive director of the Indiana Corn Marketing Council, the Indiana Corn Growers Association and the Indiana Soybean Alliance.

In this interview, Novak also talks about NCGA’s comments on the proposed Waters of the U.S. rule, and what he expects from the lame duck session of Congress and the new Congress in January. Interview with Chris Novak, NCGA CEO

2014 NAFB Convention Photos

NAFB Convention is sponsored by
NAFB Convention is sponsored by FMC

More Corn for Ethanol

usda-logoIn the new World Agricultural Supply and Demand Estimate, USDA has increased the amount of corn forecast to be used to make ethanol and co-products such as the livestock feed distillers grains.

Corn used in ethanol production is projected 25 million bushels higher at 5.15 billion bushels for the 2014-15 marketing year. The reason is a reduction in expected sorghum use for ethanol and the strong pace of weekly ethanol production reported so far for the marketing year.

In the November crop forecast, USDA slightly lowered corn production this year to 14.4 billion bushels, with yields now expected to average 173.4 bushels per acre. If realized, this will still be the highest yield and production on record for the United States.

“This is positive news for the market overall as we’re expecting demand to rise to meet these record yields,” said American Farm Bureau Deputy Chief Economist John Anderson. “An estimated increase in ethanol production should also help to absorb this year’s bumper crop.”

The drop in the national production estimate for corn seems to be coming from traditionally high-yield states that are now seeing lower estimates this month, Anderson said. The Iowa yield estimate was shaved by two bushels per acre, and Minnesota’s came down by five.

The main reason for the slight drop in the corn forecast is a slow harvest and weather challenges, that are now including heavy snow in the upper Midwest. The latest crop progress report shows Wisconsin, Michigan, Colorado and Indiana lagging behind the most in harvest, but significant progress was made in the last week so that the corn harvest nationwide now stands at the five year average of 80 percent.

Ag Groups Urge President to Reject Biofuels Cuts

mess-rfsThe National Corn Growers Association (NCGA) and several other agricultural sent a letter to President Obama this week asking him to intervene with the Environmental Protection Agency regarding its proposed cuts in the 2014 volume obligations for the Renewable Fuel Standard.

“The blending targets and the methodology in your administration’s proposed rule are already causing significant harm to the biofuel sector,” the letter states. “These impacts are reverberating throughout the U.S. agriculture economy, and we expect this trend to continue if the targets and the methodology in the rule are not corrected.”

The letter discusses how the ag sector has met its responsibility in growing sufficient feedstock for biofuels, but is also working with the ethanol industry on infrastructure and advanced fuels. The letter concludes: “The EPA’s proposed policy decision is driving one of our key economic engines – the biofuel sector -¬‐ overseas. We have invested in response to the signals in the RFS and are poised to deliver the very low carbon fuels you have sought for so long. Instead of reaping the economic benefits of this investment with a build-¬‐out of a domestic biofuel industry, the methodology proposed by EPA is offshoring the industry – and our market. This is a decision we cannot afford in America’s heartland.”

In addition to NCGA, organizations sending the letter included the Agricultural Retailers Association, American Farm Bureau Federation, Association of Equipment Manufacturers, National Association of Wheat Growers, the National Farmers Union and National Sorghum Producers.

Solenis Receives Corn Oil Extraction Patent

Solenis has received a U.S. patent (Patent No. US 8,841,469 B2) for the use of chemical additives to improve the separation of corn oil. In addition to yielding more corn oil, the company says its corn oil extraction aids, which are marketed as Dimension corn oil extraction aids, also reduce solids in the oil, resulting in a cleaner, higher-quality oil. The extraction aids, which are easily introduced into the process, also have been shown to reduce system deposition, resulting in less downtime for system cleaning and maintenance according to Solenis.

Solenis logo“Our goal is always to drive the profitability of the companies we do business with – and our extraction aids do just that,” said Allen Ziegler, global marketing director of biorefining at Solenis. “We’re not a one-trick product company. We have a full line of products that can benefit our customers – from reducing costs to increasing productivity. On top of that, our process experts are always looking for innovative ways to further build efficiencies. It’s inherent in everything we do.”

Previously known as Ashland Water Technologies, Solenis was part of Ashland Inc. until earlier this year when it became a stand-alone company. In addition to its corn oil extraction technologies, the company’s product portfolio includes a broad array of process, functional and water treatment chemistries as well as monitoring and control systems.

“The reality is that we were first to market with this technology and we have hard data to demonstrate its value, whereas with competitor products there can be significant variances in product performance,” said Ziegler. “Whether customers have a specially blended product or want validation that our technology works the same or better than what they’re currently using, we’ll work with them to get the product they need and the performance they expect.”

“We’re seeking to bring greater value to fuel ethanol plants with our patented and proven technology. But just as important, we want to establish good relationships with those companies,” Zeigler added.

Promoting American Ethanol Texas Style

American-Ethanol-and-NASCAR-LogoThey say that everything is bigger in Texas so it’s appropriate that one of the largest E15 promotions of the year will be held this weekend about the benefits of American Ethanol for NASCAR fans at the Texas Motor Speedway.

“We have done 12 major promotions this year and have exposed millions of NASCAR fans to the performance and environmental benefits of Sunoco Green E15, but there is a lot of excitement surrounding this event,” said Jon Holzfaster, chairman of the National Corn Growers Association’s NASCAR Advisory Committee. “American Ethanol will be everywhere at this race, on the track, on the Midway, in the campgrounds and even on Big Hoss.”

big-hossBig Hoss is the world’s largest, high-definition LED video board, stands 218 feet wide by 94.5 feet tall and features 20,633.64 square feet of high-definition display. The 108 ton beast of a screen will be showing an American Ethanol video throughout the race.

American Ethanol partners Growth Energy and NCGA are joining forces with the Texas Corn Producers to make sure E15 fuel is prominently promoted at this high profile race.

The contest for the NASCAR Championship is now in its third round, and results in Texas and Phoenix will trim the field to only four drivers who will be eligible to win the Sprint Cup Trophy on November 16. As a result, tens of thousands of fans are expected to flock to the full weekend of races, with millions more tuning in on Sunday for the marquis Sprint Cup duel. Every car will be fueled with E15, and will sport the green American Ethanol fuel port as they have all season.

Robert Baker Wins Growth/New Holland Sweepstakes

Robert Baker of Sue City, Missouri has won the 2014 Growth Energy Individual Membership Sweepstakes sponsored by New Holland. His prize included 200 hours of usage of a CR8090 combine with a New Holland Twin Rotor CR8090 combine corn head for the 2014 harvest season.

“I am very excited, and I have a son and grandson that are more excited than me because they get to run [the combine],” said Baker.

Baker is a farmer who has invested in the Macon, Missouri, POET Biorefining plant, and regularly provides feedstock. The 14-year-old plant gained national coverage in 2010 when President Obama visited to learn more about ethanol production and gave a speech discussing the ability of ethanol to “contribute to our clean energy future”.

new-holland8090“We are proud to support a farmer who works so hard every day to grow crops to help feed the world and fuel our nation,” said Growth Energy CEO, Tom Buis. “Our members are working hard to revitalize our rural economies, create new jobs and ensure our nation will have a sustainable and secure energy future. This sweepstakes was part of a larger effort to continue to build grassroots support for biofuels across the country. Our growing grassroots advocates, such as Mr. Baker, help promote our industry and ensure that lawmakers in Washington understand the important role the RFS and biofuels play across America’s heartland. ”

The Growth Energy Individual Membership Sweepstakes offered all new or renewing individual members a chance to win either a NASCAR ticket package or usage of a New Holland combine. The total prize package for the combine is valued at $35,584.

Steve Murphy, General Manager at POET Biorefining – Macon, added, “The economic impact of the ethanol industry here in Missouri is undeniable and what we do here at POET goes far beyond the production process. As the first ethanol plant in the state of Missouri, we are proud of the added value our facility brings to producers and this community. However, we wouldn’t be able to offer consumers cheaper and cleaner choices at the pump if it weren’t for producers like Robert. All of us at POET Biorefining – Macon sincerely thank Robert for his continued support and extend him our congratulations.”

Export Exchange Tours Build Relationships

badger-visitMany of the international teams visiting the United States last week for the 2014 Export Exchange also participated in tours before and after the event to see ethanol plants and farms across the Midwest.

Badger State Ethanol in Wisconsin had the honor of hosting a team of buyers from the Kingdoms of Saudi Arabia and Jordan. The KSA/Jordan team included companies representing the major dairy and poultry companies and major importers of feed grains in both countries and have been buyers of DDGS in the last couple of years.

exex-bob-tomHeld every other year by the U.S. Grains Council (USGC) and the Renewable Fuels Association (RFA), Export Exchange brings together more than 200 international buyers with U.S. sellers of corn, sorghum, barley, distiller’s dried grains with solubles (DDGS), corn gluten meal and corn gluten feed. Over the course of three days of events and the pre- and post-tours, these individuals not only do business directly but also make connections to facilitate future sales.

“This year’s Export Exchange was a resounding success,” said RFA president Bob Dinneen, pictured here with USGC president Tom Sleight. “In addition to new business agreements, it is my hope that attendees from all across the world will return home with a better understanding of international grain markets, domestic supply and demand of DDGS and coarse grains, and the current political landscape.”

Patriot Renewable Fuels Signs Cellulosic Deal

Patriot Renewable Fuels has signed a Professional Services Agreement to install ICM’s Fiber Seperation Technology (FST) as well as their Generation 1.5 Grain Fiber to Cellulosic Ethanol Technology (Gen 1.5) for its biorefinery. According to Gene Griffith, Patriot’s CEO says they are considering beginning construction in February 2015 upon board approval.

According to ICM, FST is a value-added technology that increases ethanol yield and throughput as well as increased oil recovery. Patriot is currently adding a biodiesel plant ICM tank at Patriot Renewable Fuels Biorefinerythat will convert the ethanol’s corn oil to biodiesel. Production is anticipated to begin in early 2015. The FST process separates the fiber from the kernel before the traditional fermentation process.

Once the separation occurs, the Gen 1.5 process then ferments the fiber to produce cellulosic ethanol. With the combined technologies, ethanol production is estimated to increase by six to 10 percent. By removing the fiber prior to the standard fermentation process, FST allows the plant to produce each gallon more efficiently and creates the option of diversified co-products such as high protein feeds.

“With this step, Patriot will be better positioned to help lead the corn-based ethanol industry into increased production of cellulosic ethanol,” said Griffith “With board approval for these projects, Patriot could be the first ethanol plant to produce two Advanced Biofuels [corn-based biodiesel, and cellulosic ethanol]. We believe these processes will not only diversify our plant, but they will also improve ethanol yield of traditional corn based ethanol to over 3.08 gallons per bushel.”

Patriot VP/GM, Rick Vondra added, “We are excited that Patriot’s board approved this next step toward cellulosic ethanol by agreeing to complete the engineering and design for these processes. We appreciate the research and development that ICM has done to develop these new processes along with ICM’s Selective Milling Technology that we installed in 2013. Our team is positioned to continue working with ICM to grow our business. ICM’s ethanol technology is a logical platform on which to build our business as a biorefinery. There are many new products and growth possibilities using corn as our feedstock, and we have identified these as two high potential processes that we can adopt now.”

Small Biodiesel Maker Closing Indicative of RFS Problem

yokayo1While the closing of one small biodiesel maker in California might not seem like big news, it’s certainly indicative of the problems facing the industry, big and small producers alike. This story from the Ukiah (CA) Daily Journal says that Yokayo Biofuels, which turned waste cooking oil into biodiesel, has closed.

[Kumar Plocher, Yokayo Biofuels’ CEO] says the biggest reason for their closure was due to a lack of government support both at the state and federal levels. He explains that the carbon credit programs, those where petroleum companies are required to buy a certain amount of renewable fuels, allowed his company to bank carbon credits, normally valued high based on demand. This year state and federal value levels were very low: the state’s due to tampering by global companies that flooded the market and at the federal’s due to the Obama administration and the EPA. “Every year the federal government is supposed to raise the requirement of renewable fuel that should be purchased. At the beginning of 2014, they did not do that; they kept it static. They waited until September to announce a tiny increase, and by that time the damage was done and carbon credits were worthless all year. Every mid-term election year, the dollar per gallon subsidy that goes to biofuels has been absent; they wait until after the election.”

Plocher’s complaint is a common one among advanced biofuel makers and their advocates this year. In fact, at the recent National Advanced Biofuels Conference & Expo, Michael McAdams, founder and president of the Advanced Biofuels Association, said the partnership between the federal government and industry has to have clarity and certainty, but that’s not been the case lately.

“What we haven’t had in the last two years is certainty for the people I represent in the advanced and cellulosic sector,” McAdams said.

Similarly, Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA), pointed to the U.S. Department of Agriculture’s estimates that corn prices will hit an eight-year low because of the government’s failure to follow through on the promises made in the Renewable Fuel Standard (RFS).

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments.”

There is a little good news in all of this. Plocher was able to sell Yokayo Biofuels’ biodiesel assets to like-minded Simple Fuels.

Crop Report Underscores Need for Market Certainty

The U.S. Department of Agriculture (USDA) has released new corn crop estimates that confirm another record setting corn crop and after accounting for the surplus after all demands are met, will hit a 10-year high. The WASDE report predicts the final 2014 corn crop at 14.48 billion bushels based on a record average yield of 174.2 bushels per acre In addition, WASDE estimated global grain stocks will reach a 14 year high.

While the corn crop is at record levels, corn prices are falling. USDA projected prices will average $3.40 per bushel – the lowest in eight years. This is also below the cost of production for more farmers.

“API [American Petroleum Institute] has spent millions upon millions of dollars on ad campaigns trying to sell people on the canard that ethanol drives up food prices in a misguided attCorn Harvestempt to garner opposition to the Renewable Fuel Standard (RFS),” said Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA). “But their argument is bankrupt. Because of the RFS, farmers have invested in technology and increased yields to assure ample supply for all users. Today’s report demonstrates the API campaign is intellectually dishonest.

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments. The White House has an opportunity to help alleviate this situation simply by fixing the badly misguided 2014 RFS proposal and getting the program back on track.”

Bioenergy for the Birds

A new research paper examines the relationship between bioenergy and the birds. The study, conducted by researchers at the University of Wisconsin-Madison (UW-Madison) in conjunction with the Wisconsin Department of Natural Resources (DNR) and published in PLOS ONE, looked at whether corn and perennial grassland fields in southern Wisconsin could provide both biomass for bioenergy as well as a bird habitat.

The answer is yes.

UW-Madison biofuels and bird studyThe study found that where there are grasslands there are birds. For example, grass and wildflower dominated field supported more than three times as many bird species as cornfields. And grassland fields can product ample biomass to be used to produce advanced biofuels.

Monica Turner, UW-Madison professor of zoology, and study lead author Peter Blank, a postdoctoral researcher in her lab, hope the findings help drive decisions that benefit both birds and biofuels, too, by providing information for land managers, farmers, conservationists and policy makers as the bioenergy industry ramps up, particularly in Wisconsin and the central U.S.

The research team selected 30 different grassland sites – three of which are already used for small-scale bioenergy production – and 11 cornfields in southern Wisconsin. Over the course of two years, the researchers characterized the vegetation growing in each field, calculated and estimated the biomass yields possible, and counted the total numbers of birds and bird species observed in them.

According to Blank and Turner, the study is one of the first to examine grassland fields already producing biomass for biofuels and is one of only a few analyses to examine the impact of bioenergy production on birds. While previous studies suggest corn is a more profitable biofuel crop than grasses and other types of vegetation, the new findings indicate grassland fields may represent an acceptable tradeoff between creating biomass for bioenergy and providing habitat for grassland birds. The landscape could benefit other species, too.

Among the grasslands studied, the team found monoculture grasses supported fewer birds and fewer bird species than grasslands with a mix of grass types and other kinds of vegetation, like wildflowers. The team found that the presence of grasslands within one kilometer of the study sites also helped boost bird species diversity and bird density in the area.

This is an opportunity, Turner said, to inform large-scale land use planning. By locating biomass-producing fields near existing grasslands, both birds and the biofuels industry can win.

Food Prices Still Up Despite Lower Corn Prices

With record corn production forecast this year comes lower corn prices, which makes the food versus fuel argument harder than ever to make, according to Growth Energy.

Total corn production is now projected at 14.475 billion bushels, 550 million bushels more than last year’s record, while the average price received by farmers is expected to be $3.40 per bushel, the lowest price in eight years.

Meanwhile, the United Nations Food and Agriculture Organization (FAO) reports the international food price index is down 6.0 percent over the last year, grain prices are down nearly 9 percent since 2013, but meat prices are nearly 22 percent higher than a year ago.

Domestic food prices are up 2.5 percent compared to December 2013, nearly the same as the overall Consumer Price Index, which is up 2.1 percent for the same period. But while corn and other grain prices are rapidly declining, consumer meat prices are up 11.6 percent since last December.

growth-energy-logo“The current WASDE projections and recent reports from the FAO and Bureau of Labor Statistics further confirm that there is virtually no correlation between U.S. ethanol production and consumer food prices,” said Tom Buis, CEO of Growth Energy. “Corn prices are below the cost of production for most farmers, and ethanol is selling approximately $1.00 per gallon less than the gasoline on the wholesale marketplace.”

“As integrated livestock and poultry companies brag about their record profits and margins to their stockholders and investment bankers, the Turkey Federation, National Chicken Council and The National Council of Chain Restaurants, all allies of Big Oil, continue their campaign to intentionally mislead Americans about the cause of rising food prices in the U.S,” Buis added.

USDA Increases Crop Forecast Again

il-harvest-14The harvest may be running a little slow right now, but the latest report from USDA’s National Agricultural Statistics Service is calling for a bit more corn than expected a month ago, adding to the already record forecasts.

Corn production is now forecast at 14.5 billion bushels, up almost one percent from the previous forecast and four percent more than last year. Corn yields are expected to average 174.2 bushels per acre, up 2.5 bushels from the September forecast and 15.4 bushels above the 2013 average.

The bigger crop mean lower prices and USDA’s latest World Agricultural Supply Demand Estimate also released today. Corn supplies for 2014/15 are now projected at 15,736 million bushels, up 129 million from last month, while season average prices were lowered 10 cents to $3.10 to $3.70 per bushel. Corn used to produce ethanol, distiller’s grains and other co-products is projected at 5.125 billion bushels, while corn consumption for feed is estimated at 5.375 billion bushels.

More Corn in the Bins

usda-logoThere’s more corn in the bins than there was a year ago at this time. USDA’s newest Grain Stocks report shows 1.24 billion bushels of old crop corn in all positions as of September 1, up 50 percent from the same time last year. Of the total stocks, 462 million bushels of corn were stored on farms and 774 million bushels were stored off the farm, up 68 and 42 percent from the prior year, respectively. The U.S. corn disappearance totaled 2.62 billion bushels during June-August, up from 1.95 billion bushels during the same period last year.

il-harvest-14Meanwhile, the corn harvest nationwide is running behind average for this time of year and just a bit ahead of last year, but the crop continues to look good.

According to USDA, the condition of the corn crop remains 74% good to excellent, 60% of the crop is mature, and 12% was harvested as of Sunday. All states are behind normal pace in the harvest.

The Illinois Corn Growers Facebook page has been showcasing harvest photos from around the state, including this one here submitted by Jordan Miles.

Orrie Swayze: EPA is Destroying Grain Prices

Orrie Swayze, from Wilmont, South Dakota is a long-time ethanol advocate and has been involved with the American Coalition for Ethanol (ACE) since its inception more than 20 years ago. He has been following the progress of the Environmental Protection Agency’s (EPA) writing of the final 2014 final rule for the Renewable Fuel Standard and as a retired farmer, he is not happy with their direction. While no one knows what the renewable volume obligations will be for obligated parties this year (yes, the EPA is way behind should be releases the proposed rule for 2015 in November) there is grave concern among the renewable fuels industry that volumes will be lower than mandated by the law and from years past.

orrieSwayze is speaking out. “The EPA deceitfully created E10 blend wall destroys free enterprise’s role deciding corn prices because it locks a potential new five billion bushel demand for corn out of the market,” he says. “Free enterprise cannot play a legitimate role in corn and auto fuels markets when EPA’s dishonest policies limit ethanol’s auto fuels market participation to ten percent. Countering free enterprise principles EPA picks gasoline as auto fuels market winner by deceitfully claiming high octane E30 is illegal to use in and damages standard auto engines.”

He notes that unlike gasoline, ethanol does not contain or emit harmful tailpipe emissions that are particularity harmful to children and the elderly. “Therefore it isn’t Clean Air Act defined tampering or illegal, as EPA alleges, to fuel standard autos with E30 because it decreases known human carcinogenic tailpipe/evaporative emissions 30 percent,” explains Swayze.

“Importantly, auto companies urgently request EPA to raise minimum gasoline octane levels,” he continues. “Autos endorse ethanol’s high octane E30 but ridicule low octane E15. E15 cannot provide E30’s air cooling turbocharging effect and 93 ‘safe’ octane that’s required for optimized, efficient high compression engines. Engines autos need to be competitive in international markets plus meet 2017 café standards.”

South Dakota farmers have a deep experience of producing corn and ethanol with the state producing nearly a billion bushels of corn plus a billion bushels of ethanol each year. “We all have hit EPA’s fraudulent blend wall evidenced by a dollar plus lower tumbling corn prices and necessarily all grain/ethanol prices,” says Swayze. “The economic impact of government’s war on E30 use in standard autos creating the e10 blend wall will obviously extort several billion dollars annually from SD’s economy alone.”

Swayze concluded, “Incredibly state government, corn and ethanol organizations assure the blend wall stands firm today: They irresponsibly agree with EPA’s big oil sponsored fabrications that built the blend wall: E30 is illegal to use in and damages standard auto engines.” He is asking corn growers associations and ag associations to stand firm on ethanol and be more proactive in fighting Big Oil who is perpetuating myths about ethanol.