The first speaker here at the Transition To A Bio Economy conference is Michael Wetzstein, University of Georgia. His talk deals with two issues. One is on price volatility and the other is on food and fuel.

Michael says that gas price volatility can be avoided with fuel diversification by blending renewable fuels with fossil fuels. That’s what his research shows. He also suggests that we could relax gas taxes and reduce the tariff on the importation of Brazilian ethanol.

Another part of his research is on food and fuel and to answer the question of “Is there a direct link between the volatility of ethanol production and the volatility of corn prices. His research has found that there is a link but not a persistent or long lasting one. In fact, in the long run he says there is no direct link.

The bottom line he says is to produce more food.

You can listen to my interview with Michael here:

You can also download the interview using this link (mp3).

I’m also uploading pictures to a photo album which you can feel free to use if you’d like: Transition To A Bio Economy Photo Album

The United Nations Food and Agriculture Organization High Level Conference on Food Security focused on solutions to fight global hunger and increase agricultural development this week, rather than place restrictions on biofuels production.

The final declaration adopted by 180 countries calls for further study on the issue, an approach which world biofuels producers called “thoughtful.”

In a statement, leaders from the Canadian Renewable Fuels Association (CRFA), the European Bioethanol Fuel Association (eBio), and the Renewable Fuels Association said they the proposal to undertake further study of biofuels in agriculture. “We are confident it will underscore the valuable contribution biofuels can make to ease the energy and agriculture challenges confronting all nations,” they said.

Agriculture Secretary Ed Schafer also welcomed the declaration’s recognition of the important issues related to the challenges and opportunities of biofuels. “The United States is firmly committed to the sustainable production and use of biofuels, both domestically and globally,” he said in a statement.

During a press conference with reporters from Rome, Schafer said that during his time there, he has “become more confident that our ethanol policy of energy security, of better environmental factors, and a reduction in the cost of petroleum use in our country is the right policy direction. And I certainly am going to urge continuing along the way we’re going.”

The real focus of the summit was on getting countries to come up with more money to meet urgent humanitarian needs for food and to help countries achieve continuing food security through investment in agriculture and research. Schafer said the United States will continue to provide the majority of food aid globally, projecting to spend nearly $5 billion on programs to combat hunger over the next two years. By contrast, oil-rich countries like Venezuela and Kuwait have only pledged to spend $100 million a year.

Leaders of five major agricultural organizations and the head of the Renewable Fuels Association joined together Wednesday to try and dispel many of the accusations that have been levied against biofuels in recent months and emphasize the positive contributions of ethanol in particular.

“Instead of using ethanol as a scapegoat for increased food prices, we should be having a discussion about the business, economic and policy issues that are connected with the world of $130 plus per barrel oil,” said American Farm Bureau Federation president Bob Stallman. He said the country’s Renewable Fuels Standard passed by Congress in December was the “right thing to do and continues to be the right thing to do.”

Stallman was joined by Tom Buis of the National Farmers Union, in a rare show of unity for the two general farm organizations that are frequently at odds over policy issues. Buis listed his top six myths about higher prices being blamed on ethanol, including Mexican tortillas, pasta, rice, bagels, beer and movie theater tickets. “I’m tired of debating these myths,” said Buis. “The last thing we need to do on renewable energy is backslide again because 30 years from now we will be back talking again about our dependence on imported energy.”

Other farmer leaders from the National Corn Growers Association, National Association of Wheat Growers, and the National Sorghum Producers participated in the conference call with members of the news media, fielding questions from reporters at media outlets ranging from Reuters to the Capitol Press in Idaho.

LifeLine Foods sells ethanol, but ethanol is just one of many products the company produces. The St. Joseph, MO-based corn milling plant started off as a manufacturer of snack foods in 2001. Today, LifeLine’s identity is continually evolving. The 51 percent farmer-owned company is committed to innovation and is now partnered with ICM, Inc, a world leader in ethanol facility design and engineering, in the production of ethanol.

In this DomesticFuel Cast, we hear from LifeFine Foods CEO Bill Becker about the company’s current innovations with corn, food and fuel and what’s in store for the future.
Here is the Domestic Fuel Cast #4:

You can also subscribe to the Domestic Fuel Cast using the following url/feed link: http://www.zimmcomm.biz/domesticfuel/domestic-fuel-cast.xml.

The ethanol industry in Brazil has been developing some major traction. Marcos Jank, President of UNICA, says the demand for ethanol in Brazil is now matching that of the demand for gasoline. He says ethanol is gaining ground and Brazil “won’t move back to gas.”

Marcos was one of seven speakers at today’s Ethanol Summit held at the Indianapolis Motor Speedway today. General Motors sponsored the event. The object of the Summit was to explore Brazil’s strong and sustained success with ethanol while also taking a look at where and how the U.S. ethanol industry has room to grow.

Marcos and Indy racing legend Emerson Fittipaldi - a Brazilian ethanol producer - highlighted a number of milestones the Brazilian ethanol industry has already attained:

• All fuel sold in Brazil contains a 20 to 25 percent blend of ethanol
• The unsubsidized ethanol industry offers a fuel that is on average one dollar below the price of gasoline
• Virtually all 33,000 gas pumps offer E100
• Just one percent of the 40 percent of arable land in Brazil is being used to produce sugarcane ethanol
• Forty-five percent of fuel for cars is from sugarcane
• Sugarcane ethanol production is 100 percent self-sufficient
• The food industry is growing faster than the ethanol industry
• Ninety percent of all new automobiles sold are flex-fuel automobiles
• One-hundred percent of GM vehicles produced in Brazil are flex-fuel
• Twenty percent of all cars are flex-fuel vehicles today
• Fifty percent of all cars will be flex-fuel vehicles by 2012
• Three percent of electricity is from sugarcane
• Honda and Yamaha are introducing flex-fuel motorcycles this year

(more…)

The 2008 Indy Pace Car corvette wasn’t the only shiny new toy to check out at the giveaway this morning. The Indiana Corn Marketing Council debuted its new interactive mobile marketing unit complete with videos detailing the production of ethanol and a database of local fuel retailers that offer E10 and E85 fuel blends. Visitors can even print off a list of local stations.

I caught up with Indiana Corn’s Mark Walters again, as well as ICMC’s Mike Shuter (pictured), the council’s President and a Frankton, IN farmer. We talked about the new mobile marketing unit, the truth about ethanol as they see it and how IN corn fits into the ethanol industry. You can listen to my interview with Mark and Mike here:

2008 Indy 500 Photo Album

Team Ethanol Driver Ryan Hunter-Reay says pump promotions help emphasize what ethanol is all about: giving consumers a break at the pump as fuel prices continue to spike. Ryan drives the No. 17 Rahal-Letterman Racing IndyCar in the Indy Racing League and he and two other IndyCar drivers were out at the pumps in Carmel, IN today educating consumers on a fuel that’s become the focal point of controversy.

The Indianapolis Star featured a cover story about the recent spotlight on ethanol, fuel prices and food prices. The local newspaper quoted Indiana Agriculture Director Andy Miller saying Congress’ proposed reduction or even end to federal ethanol subsidies “would be a major blow” for his state.

And that’s what Ryan wants to point out: that ethanol would be a considerable blow for consumers too… in every state. Ryan says, in some cases, ethanol helps keep gas prices down by as much as $0.50 a gallon. He says consumers have many questions about ethanol and its negative propaganda, wondering what’s true and what’s false. That’s where pump promotions help. Ryan says filling up on E10 or E85 helps open consumers’ eyes and gives them an opportunity to ask both ethanol experts and IndyCar drivers questions. “It’s worked for the IndyCar Series at 240 miles per hour, it can work for these folks driving at 35,” Ryan said.

I spoke with Ryan about how pump promotions are still a relevant tool in getting out the facts about ethanol. You can listen to my interview with Ryan here:

2008 Indy 500 Photo Album

The U.S. Secretary of Agriculture has a difference of opinion with the Grocery Manufacturers Association.

During a Monday press conference, Secretary Ed Schafer said he had talked to the people who have “initiated these underground things that have been going on” to influence public opinion about ethanol incentives and found that while they understand that higher energy and transportation costs are the driving factor for increased food prices, they think “it’s easier” to target corn and ethanol.

“The change in the Renewable Fuels Standard, the change in the (ethanol) tariff or duty, isn’t going to effect food prices,” Schafer said. “We need to focus on things that will actually have an effect, instead of a short-term political solution we need to look long-term, because we have a long-term problem here.”

When asked directly if he was referring to the Grocery Manufacturers Association campaign against ethanol that was revealed last week by the Capitol Hill publication Roll Call and publicized by Senator Charles Grassley (R-IA) and others, Schafer said yes.

“Clearly, we have a difference of opinion with GMA,” said Schafer. “They are a trade organization driven by their membership and evidently that is the course they chose to take, not one that I would take.”

Schafer did say that they were now talking about “sharing information” with GMA. “I would just as soon we share information ahead of the fact,” he said.

Armed with power points and statistics, officials with the U.S. Department of Agriculture held a press conference in Washington DC Monday to discuss the case for producing both food and fuel in the United States.

“We think the time has come for USDA to join in the public conversation about the relationship between food prices and biofuels,” said Agriculture Secretary Ed Schafer. “We want to offer our perspective and what has happened in the marketplace, to share our data and the analysis of what has happened.”

Presenting the data was USDA chief economist Dr. Joe Glauber, who pointed out that all commodity prices have risen in the past year, not just food prices. “We certainly don’t want to minimize what’s going on with ethanol, because it is a very important factor in today’s market, but it’s important to discuss it in its proper context,” Glauber said. He noted that all commodities are up 47 percent, food is up 46 percent, and oil is up 68 percent.

The factors Glauber says have contributed to higher food prices are economic growth, weather, export restrictions, higher food marketing and transportation costs, and finally, increases in biofuels.

An economic analysis of the pass-through for an increase in corn prices on the Consumer Price Index (CPI) shows that a 50 percent increase in corn prices raises the CPI less than one percent, but Glauber says, “It’s a difficult thing to sort out how much of the increase in corn prices was necessarily due to ethanol.”

However, he says the Council of Economic Advisers estimates the total global increase in corn-based ethanol production accounts for only about three percent of the recent increase in global food prices.

Link to USDA power point presentation slides.

Ethanol proponents from the halls of Congress to the corn fields of the Midwest are expressing outrage at documentation that major food corporations may have supported a high-dollar public relations campaign to blame farmers and ethanol for rising food prices.

In a prepared floor statement on Thursday, Senator Chuck Grassley of Iowa told his colleagues that “this anti-ethanol campaign is not a coincidence. It turns out that a $300,000, six-month retainer of a beltway public relations firm is behind the smear campaign, hired by the Grocery Manufacturers Association.”

That information was reported Wednesday in the Capitol Hill publication Roll Call, which obtained confidential documentation of the effort.

“Rising food and fuel prices have led the biofuels industry to take a beating on Capitol Hill the past few weeks,” the article stated. “But the pummeling hasn’t been by chance — it’s part of a concerted effort spearheaded by the Grocery Manufacturers Association and the Glover Park Group. GMA has been leading an ‘aggressive’ public relations campaign for the past two months in an effort to roll back ethanol mandates that passed in last year’s energy bill.”

Among the documents obtained by Roll Call was the GMA’s proposal request “to build a groundswell in support of freezing or reversing some provisions of the 2007 Energy Bill and for the elimination/reform of ethanol subsidies and import restrictions.”

Glover Park Group’s proposal response included the number one objective to “obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites.”

National Corn Growers Association president Ron Litterer says that corn farmers are shocked and outraged by the news. “It is simply unfathomable that food companies through the Grocery Manufacturers Association chose to smear their farmer-suppliers rather than cooperate with us to meet the growing challenge for America’s fuel needs,” Litterer said. “Unfortunately, from what we’ve heard this not the only campaign in the works to place the blame on agriculture.”