Grain Demand for Biofuels Expected to Stagnate

afbf15-westhoffA bumper crop has helped lower feedstock prices for grain-based biofuels, but the industry is still expected to stagnate. Patrick Westhoff, director of the Food and Agricultural Policy Research Institute, told attendees of the American Farm Bureau Federation’s 96th Annual Convention and IDEAg Trade Show that this year’s bumper crop and low prices is good news for those buying the green fuels’ feedstocks, but lower expected demand for biofuels will still hurt.

“We’ll have significantly smaller corn yields in 2015/16 caused in part by the low demand for ethanol. Yield numbers will change.”

Due to corn prices dropping to levels not seen in years, Westhoff said that farmers will plant less corn in the next two years. More than 90 million acres were planted in 2014 and he projected that only 87.9 million acres will be planted in 2015 and 89.7 million acres in 2016.

Westhoff said large corn and soybean crops will weigh on grain and oilseed prices in the short run, and that although average corn prices remain low by 2007-2012 standards, they are still above pre-2007 levels.

Livestock producers are expected to benefit from the big crop with lower prices for their animal feed. But we’ll need to see what happens to that industry if those smaller grain crops sizes driven by lower biofuels demand come to fruition.

2015 AFBF Convention photo album

Ag Secretary Stresses Biofuels Support at AFBF

afbf15-vilsack-stallmanReal farmers from around the country had a chance to ask Agriculture Secretary Tom Vilsack questions during an informal town hall-style meeting at the American Farm Bureau convention this week in San Diego.

The last question he took was from a South Dakota farmer who asked about continuation of strong biofuels policy in the United States. Vilsack detailed his continued support for the industry, particularly in the area of exports. “I am a firm believer in the future of the biofuels industry,” he said. “Ethanol production is at record levels…we’re now beginning to see great interest in the export market, not just for ethanol but also for dried distillers grains.”

Beyond the Renewable Fuel Standard, Vilsack said USDA is working hard to encourage the Defense Department to use more biofuels. “They are scheduled this year to begin a process of buying hundreds of millions of gallons of biofuels for jets and ships,” he said.

The last point the secretary made was on the need to update the research on ethanol in particular, especially when it comes to indirect land use. “A lot of the push back to the industry is based on studies that took place 15 years ago, 10 years ago, and there have been enormous increases in productivity of American farmers, that basically suggest the indirect land use calculations are not as accurate as they need to be,” he said.

Listen to the secretary’s comments on biofuels here: Secretary Vilsack at AFBF on biofuels

2015 AFBF Convention photo album

USDA Predicts Another Record Corn Crop

usda-logoThe U.S. Department of Agriculture released its initial assessment of the nation’s corn crop for the coming year on Friday, calling for another record based on the March 31
Prospective Plantings report.

Corn production is projected at 13.9 billion bushels, up slightly from the 2013/14 record with higher expected yields more than offsetting the year-to-year reduction in planted area. The corn yield is projected at 165.3 bushels per acre, up 6.5 bushels from 2013/14, based on a weather adjusted yield trend model and assuming normal mid-May planting progress and summer weather.

Farm organizations welcomed the news but sounded a note of caution.

corn-plant-14“America’s corn farmers continuously strive to improve and, in 2014, they certainly will make their achievements evident should these projections be realized,” said National Corn Growers Association Chairwoman Pam Johnson. “As farmers, we take great pride in our work and feel that the projections recognize our efforts. Yet, our optimism is tinged caution as we have all seen conditions change quickly and a crop shift course in a few short weeks.”

“Farmers are still out there facing the reality of unpredictable weather as they work to get their crops in the ground, favorable weather during the growing season and then cooperative weather again at harvest time,” added American Farm Bureau Federation crops economist Todd Davis. “There’s still a long way to go before the crops are in the bin.”

The USDA World Agricultural Supply and Demand estimate projects U.S. corn use for 2014/15 will be two percent lower than in 2013/14, while corn used to produce ethanol in 2014/15 is expected to be unchanged on the year with gasoline consumption expected to remain flat in 2015.

Farm Bureau Lends Support to Keeping RFS

afbf-logoAs the U.S. Environmental Protection Agency (EPA) considers its proposal that would, in effect, slash the amount of ethanol and biodiesel to be blended into the Nation’s fuel supply, the American Farm Bureau Federation (AFBF) is telling the government to leave the Renewable Fuel Standard (RFS) alone. During their policy session at the recent AFBF annual meeting in San Antonio, Texas, delegates voted to reaffirm “their support for the renewable fuels standard and approved a policy supporting renewable fuels tax incentives for the production of biodiesel and cellulosic ethanol and installation of blender pumps.”

ilfb-guebertAs we reported earlier this week, the new president of the Illinois Farm Bureau, Richard Guebert, told us RFS remains the top priority for farmers in his state and the region.

“Midwest farmers have worked so hard and so long to get those standards where they are today,” he told Chuck right before heading into a policy session at the meeting. Richard added they have even overcome some of the price spikes for commodities that go into the green fuel, so other sectors aren’t hurt by high prices for someone else’s feedstocks. “It’s just difficult for us to understand why we’re being forced to rollback those standards.”

The EPA has proposed to set the cellulosic biofuel category at 17 million gallons, biomass-based diesel at 1.28 billion gallons, advanced biofuel at 2.20 billion gallons and renewable fuel at 15.21 billion. The comment period on the proposal ends in the next two weeks.

New Illinois Farm Bureau Prez: RFS Top Priority

ilfb-guebertMembers of the American Farm Bureau Federation have met in San Antonio, Texas, where they have been talking AFBF policy. And the new Illinois Farm Bureau President Richard Guebert says ethanol and the Renewable Fuels Standard (RFS) remains the top priority for farmers in his state and the region.

“Midwest farmers have worked so hard and so long to get those standards where they are today,” he told Chuck right before heading into a policy session at the meeting. Richard added they have even overcome some of the price spikes for commodities that go into the green fuel, so other sectors aren’t hurt by high prices for someone else’s feedstocks. “It’s just difficult for us to understand why we’re being forced to rollback those standards.”

He went on to say that he doesn’t understand the Obama Administration’s position that most renewable energy experts agree will hurt biofuel producers and markets, especially in the rural economy, considering how the president has repeated his dedication to green energy, including biofuels, time and time again.

You can hear all of Chuck’s interview with Richard here: Interview with Illinois Farm Bureau President Richard Guebert
2014 AFBF Convention Photos

RFS Proposal Could Devastate Rural Economy

Protect the RFSRepresentatives from state government, the agriculture community, and the ethanol industry all say the Environmental Protection Agency’s proposed 2014 Renewable Fuel Standard (RFS) biofuels requirements would have a negative impact on agriculture and rural economies.

During a telephone press discussion today about the proposal, Iowa Governor Terry Branstad said he was proud of his state’s leadership in biofuels production and he believes lowering the volume obligations would be detrimental for jobs and land values in rural America. “I’m concerned that this would be devastating to what has been a robust economic recovery” in the agricultural heartland of America, said Branstad. “I think the president’s made a terrible mistake caving in to Big Oil on this issue.”

american-farm-bureau-logoThe proposal has already led to lower futures prices for corn, which American Farm Bureau economist Matt Erickson says could mean 2014 will see prices below the cost of production for the first time since 2005. “Looking at USDA’s cost of production forecast, the breakeven for corn for 2014 is forecasted to be over $4 a bushel,” Erickson said, adding that if the price is lower, farmers would lose money.

Reducing America’s dependence on foreign oil was the primary objective of the RFS, but “revitalizing rural communities, boosting farm income and reducing farm program costs were also important policy objectives,” but noted Renewable Fuels Association president and CEO Bob Dinneen. “The RFS has certainly helped to do that and this proposal will reverse that policy as well.”

Listen to comments from Branstad, Erickson and Dinneen with questions from the media here: Comments on RFS Proposal Negative Impacts

Farm Bureau: RFS Bendable, Just Don’t Break It

afbf-logoFarm Bureau officials are making the case that the Renewable Fuels Standard has some flexibility… but just don’t break it. In this story on its newsline, American Farm Bureau energy economist Matt Erickson makes the case that the RFS is working, but Americans are using 10 billion fewer gallons of gasoline this year than in 2007 when the law was passed. That drop makes mandated amounts in the RFS unrealistic. But he believes the flexibility in the law still makes it beneficial.

“It’s reduced our dependence on foreign crude oil. Now we’re importing over 40 percent instead of 60 percent that we saw in 2007-2008. It also creates good paying jobs in rural America, creates environmental benefits to society. It’s a good energy policy and I’d rather have my energy source come from a farmer than a Middle East dictator.”

Erickson dismisses Big Oil’s claims that the law is causing economic harm, and he says it just needs a little tweaking.

“EPA does have the flexibility to adapt within a changing environment. The world is changing quite frankly. We had the recession. We have CAFE standards which are higher fuel efficiencies within our transportation system.”

Finally, Erickson makes the case that if we abandon the RFS, we would pull the plug on new cellulosic technology.

“Looking at cellulosic, we’re going to sources such as algae or corn residue containing the corn cob anything that’s left in the field that’s not the food.”

American Farm Bureau Supports RFS

AFBF President Bob Stallman Press ConferenceDelegates for the American Farm Bureau Federation (AFBF) last week voted overwhelmingly to support continuation of the Renewable Fuels Standard (RFS), despite the fact that membership in the organization includes a substantial percentage of livestock producers.

“The livestock guys still have concerns about high feed costs, and I’m one of them, I’m a beef producer,” said AFBF president Bob Stallman. “On the other hand, we have this renewable fuels infrastructure that’s in place, a very large industry that employs lots of people and provides a market for a lot of products, so we need to be very careful not to have policies trying to dismantle that.”

There were 362 voting delegates at the 94th AFBF Annual meeting in Nashville last week representing every crop and livestock sector in the 50 states and Puerto Rico. The policies approved at the annual meeting will guide the nation’s largest general farm organization in its legislative and regulatory efforts throughout 2013.

Vilsack Ties Farm Bill to Biofuels, Will Serve Again as Ag Secretary

Vilsack 2013 afbfSecretary of Agriculture Tom Vilsack says the future success of biofuels in this country is also tied to successfully getting a new five-year farm bill passed. Speaking to delegates of the American Farm Bureau Federation at their annual meeting in Nashville, Tenn., Vilsack expressed his disappointment that a new farm bill was not passed … reserving some of his stronger language for maybe a smaller gathering. But he says the impacts of a new farm bill will be on more than just the mainstream renewable fuels, ethanol and biodiesel. It is for the overall bio-based economy.

“I’ve seen the ability to use corncobs and switch grass and algae and a wide variety of things that are grown and raised or could be produced in rural areas, converted into plastics, into chemicals, into fabrics, into fibers, into fuel, into energy. It is an unlimited future. But we require support and assistance and help and a commitment through a five-year bill,” Vilsack explained.

Vilsack reminded his audience who knows full well that rural America is providing the feed stock for most of the energy and most of the fuel that’s consumed and used across the country, while providing millions of jobs, many of those in the renewable energy sector. And he said that rural economy, booming with renewable energy, will attract young folks back to the heartland.

“If I were talking to a young person, I would say, you’re concerned about our overreliance on foreign oil, you can solve that problem in rural America.”

Growth_Energy_logo-1Vilsack also announced that he plans to serve another term as Secretary of Agriculture … a move applauded by Tom Buis, CEO of Growth Energy:

“Secretary Vilsack has been a tireless advocate for the renewable fuels industry, and I commend President Obama for his reappointment to the Department of Agriculture. I am confident that Secretary Vilsack will build upon his excellent service record supporting renewable fuels and economic growth across rural America. I know that during his tenure he will continue his strong advocacy for biofuels increased market access for higher ethanol blends such as E15.

You can listen to or download Sec. Vilsack’s speech here: Sec. Vilsack Speech

And his press conference after the closing session here: Sec. Vilsack Press Conference

DF Cast: House’s Turn at Biofuels in Farm Bill

During the last Domestic Fuel Cast, we talked about the U.S. Senate’s work on the renewable energy provisions of the Farm Bill. In this edition, we follow the debate over to the House, where not much funding in the energy title of the bill moved out of the Agriculture Committee.

Listen to what some key lawmakers, as well as leaders from the renewable energy sector, farm groups, and government officials had to say as the discussion spilled over into another House committee considering changes to the Renewable Fuel Standard (RFS).

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast

You can also subscribe to the DomesticFuel Cast here.

Farm Group Opposes Bill that Would Weaken RFS

afbfThe American Farm Bureau Federation (AFBF) is opposed to a bill introduced by Congressman Jeff Flake (R-AZ) that they claim would weaken the Renewable Fuel Standard (RFS) by requiring fuel companies to blend only the amount of cellulosic ethanol currently being produced into gasoline.

“Basically any weakening of the RFS is not a good thing for the country going forward. When you look at the ambitious goals that have been set to wean ourselves off foreign sources of oil and create a domestic biofuels industry, that’s a threat when you’re trying to undermine that,” said AFBF energy specialist Andrew Walmsley, noting that pulling back on the requirement will reduce the incentive for investment in advanced biofuels.

Walmsley says investment and increased production of cellulosic biofuels could open up new markets for farmers. “Those producers that may not grow corn and have had the opportunity to benefit from the growth of corn ethanol – the advanced biofuels and cellulosic ethanol is where they can break in. There’s crops that fit into southern rotation for southern growers between peanuts and cotton or you could look at perennials. There’s crops that grow year after year that you plant and have a dedicated source of income.”

Bioenergy Interests Invited to Attend Capitol Hill Day

A diverse group of bioenergy stakeholders is holding a Capitol Hill Day for Bioenergy in Washington, DC on March 21.

The event is being sponsored by a number of organizations including the 25x’25 Alliance, American Farm Bureau Federation, Advance Biofuels Organization, Algal Biomass Organization, American Council on Renewable Energy, Biomass Power Association, Energy Future Coalition, National Alliance of Forest Owners, National Farmers Union, and SAFER Alliance.

The groups are holding the event to draw attention to the fact that renewables make up nearly 12 percent of all energy produced in the U.S., such as fuels, electricity and thermal energy from biomass, and that bioenergy reduces the nation’s risks from dependence on foreign oil, strengthens our economy and ensures the continued, sustainable management of our natural resources.

The day will include a morning briefing with congressional members and trade group association leaders on bioenergy issues, small group visits to educate Congressional leaders and their staffs, an evening reception on Capitol Hill to network with other industry stakeholders, Congressional staff, and association partners.

Anyone in the bioenergy sector is welcome to take part in the event – registration and other information is available on-line.

Farm Bureau Supports Change in Biofuels Policy

AFBF Annual MeetingThe American Farm Bureau Federation is supporting a new direction in biofuels policy away from the blenders tax credit and toward increasing infrastructure.

“The whole discussion has been evolving within the industry and within the Congress,” said AFBF President Bob Stallman during a press conference following the conclusion of the organization’s 92nd annual meeting. “It doesn’t surprise me that that showed up in our policy this year and our members have said it’s a good idea for us to make that transition.”

AFBF Annual Meeting“Part of that is the recognition that maybe that blend credit isn’t serving as good a purpose as it could and the fact that it is a pot of money that may be subject to budget reductions and if we could shift that to infrastructure you can make the case that its a better use of public funds,” Stallman added.

The voting delegates of the nation’s largest general farm organization also adopted urged Congress to “pursue vigorous oversight” of the Environmental Protection Agency.

In approving the “sense of the delegate body” resolution, the delegates said “congressional action is necessary to restore common sense to environmental regulation on our farms.” EPA, they said, is limiting the use of private property, “encroaching on state land use and water quality planning efforts,” and impeding economic growth.

To change those regulatory trends, the delegates urged Congress to assess the impact EPA’s actions have had on agriculture, conduct a “critical examination of how the agency uses science,” and “determine an adequate budget for necessary agency activities.”

The resolution also asked lawmakers to consider legislation to “halt” EPA’s regulation of greenhouse gases.

Wesley Clark at AG CONNECT Expo

Retired General Wesley Clark visited the second AG CONNECT Expo Saturday in Atlanta to talk with farmers and ranchers visiting the event about the importance of ethanol to our nation’s security.

Representing Growth Energy, Clark greeted folks at the CASE IH exhibit on the floor of the agricultural trade show. He also made time for some media interviews to talk about ethanol issues, like what he thinks will happen with ethanol policy this year in Congress. “We need to be thinking ahead about how to fix America’s dependence on foreign oil,” Clark said. “We probably are going to need some incentives for service station owners to invest in blender pump technology and that can be done by giving them some of the credit that is being given right now to the blender itself.” So Growth will probably support some kind of a split in the current tax incentive structure to give some for infrastructure.

Clark also talks about EPA’s rule on E15. “Ethanol is not poison at E15,” he said. “So we need to be sensitive in terms of labeling. We want consumers whose cars can take E15 to use it. It’s good for America. And I think we’re going to win that discussion.”

Listen to my interview with Wesley Clark here: Wesley Clark

2011 AG CONNECT Expo Photo Album

Polk County Farm Bureau Supporting Ethanol

Polk County Farm BureauThere were a lot of volunteers helping pump gas during the Kum & Go E-85 pump promotion in Des Moines in advance of the Iowa Corn Indy 250. Some of them were from the Polk County Farm Bureau.

I spoke with Carol Miller, past President and Board member. She and her family are farmers. They really appreciate the relationship with Kum & Go and getting the word out about E-85. She points out that 35 gallons of E-85 purchased replaces a barrel of foreign oil. She says the Indy Car drivers love it because they use less fuel. She’s hoping to be at the race on Sunday.

You can listen to my interview with Carol below.

Iowa Corn Indy 250 Photo Album.