Domestic Fuel

It looks like there will be plenty of soybeans for food and fuel use, especially since the non-renewal of the biodiesel tax incentive seems to have put a lot of refineries’ operations on hold.

The latest World Agriculture Supply and Demand Estimate report from the USDA pushes up the 2009 U.S. soybean crop now to an estimated record 3.36 billion bushels, up 42 million bushels from the previous month. Biodiesel Magazine reports that soybean export projections were raised 35 million bushels to a record 1.38 billion led by strong sales and shipments to China and several other markets including Taiwan, Thailand, Egypt, and Canada:

The projected U.S. soybean crush was raised 15 million bushels from the previous month’s report to 1.71 billion reflecting increased soybean meal exports. Soybean ending stocks were projected at 245 million bushels, down 10 million from last month. Despite increased crush, soybean oil production was reduced due to a lower extraction rate. With projected use unchanged, soybean oil stocks were projected at 2.15 billion pounds, down 155 million from last month. The estimate for methyl ester use was unchanged at 2.2 billion pounds for the current 2009/10 marketing year. That compares with 1.9 billion pounds in 2008/09 and 3.24 billion pounds the previous year.

The report goes on to say that U.S. soybean yields averaged an estimated 44 bushels an acre, also a record. Hopefully, this increased size of crop and higher yields will quiet some of the critics who say we can’t have food and fuel.

A new report indicates there will be enough corn and soybeans for ethanol and biodiesel production, as well as the feed, food and export uses those crops are tasked with.

But the evaluation from the Agricultural Marketing Resource Center‘s Robert Wisner, Professor of Economics and Energy Economist, says things could get tight if next year’s crop is hit with bad weather or a natural disaster:

For 2009-10, the current corn crop estimate points to adequate corn supplies for feed, food, fuel, and export uses. Carryover stocks on August 31 of next year are expected to be about 1 and one-half weeks above minimum working stocks levels. Our early and very tentative normal-yield projections for 2010-11 show corn carryover stocks declining slightly by August 31, 2011 but still remaining marginally above minimum working stocks levels.

Wisner does note that there’s not a lot of margin for error in case the Corn Belt gets hit with drought or flooding. He says that will keep corn prices volatile should any inclement weather show up.

As far as soybeans and biodiesel, they should be OK, if, once again, the crops turn out as expected:

[T]he availability of soybeans and soybean oil for 2009-10 and 2010-11 is not indicated to be a major constraint on biodiesel production in U.S. if South American crops are near normal. Supplies for the current marketing year are a little tighter than indicated at this time last year because of extreme weather problems in South America last winter and early spring. However, U.S. and EU government policy actions that limit biodiesel demand and create uncertainty about future policies are a constraint on U.S. biodiesel production. That, in turn, makes 2010-11 soybean availability for biofuels and other uses look a little more adequate than anticipated a year ago.

You can read all of Wisner’s report in the January 2010 edition of the Ag MRC’s Renewable Energy Newsletter.

A group that promotes the use of soybeans and a program that works to reduce local petroleum consumption are partnering again to promote the use of soy biodiesel next year.

This article from radio station KFGO in Fargo, ND-Moorhead, MN says the United Soybean Board’s soybean checkoff and the U.S. Department of Energy-affiliated (USDOE) Clean Cities’ chapters will develop programs that promote the benefits of soy biodiesel:

“The soybean checkoff continued this program to support the use of soy biodiesel in any diesel motor to show how biodiesel is cleaner burning and better for the environment while supporting U.S. agriculture,” says Geno Lowe, a soybean farmer from Hebron, Md., and soybean checkoff leader. “We expect we’ll see some inventive proposals such as school bus demonstrations to public transportation uses to heavy equipment uses by state or local governments or maybe even a bioheat promotion project.”

Biodiesel promotion and education has proved to be important to U.S. soybean farmers’ bottom lines. A checkoff-funded study found that U.S. soybean farmers received an additional $2.5 billion in net returns over the last four years due to the biodiesel industry’s demand for soybean oil. It shows this demand added up to 25 cents in support for the per-bushel price of soybeans.

USB will provide up to $100,000 for funding soy biodiesel communications programs. The biodiesel reimbursement application process has been opened up, and USB is encouraging Clean Cities chapters to partner with Qualified State Soybean Boards (QSSBs) for this project. Selected participants will be announced in the middle of next month.

The deadline for getting in your two cents’ worth on the U.S. EPA’s proposed Renewable Fuels Standard (RFS2) is rapidly approaching, as this Friday, Sept. 25th will mark the end of the comment period.

This article in Biodiesel Magazine says the American Soybean Association and the National Biodiesel Board are making a last-minute appeal to their members and biodiesel supporters to get their comments in:

Both organizations have made it easy to access information at their Web sites, providing background information, sample comments, links to the EPA Web site and instructions on emailing comments. The ASA form is available at www.soygrowers.com/policy/RFS2.htm. The NBB’s action center is available at http://biodiesel.org/news/RFS/. The NBB provides an express comment that features a condense message and only requires a name, city, state and email address. “it takes less than 20 seconds to fill out and submit,” the NBB says. The NBB also offers long and short versions of sample comments to make, and provides information for an individual to craft a unique response.

The stakes are high for the biodiesel industry. “As EPA’s proposed rule is written, soy biodiesel would no longer qualify under the specific federal mandate for biomass-based diesel use,” ASA President Johnny Dodson explained. “With the future of the U.S. biodiesel industry at stake, farmers need to get involved right now by voicing their opposition to the proposed rule.” The ASA has reached out to U.S. soybean farmers in their campaign, as have several state soybean associations and corn grower associations as well to comment on the impact on corn ethanol.

The main sticking point the ASA and NBB (and the Renewable Fuels Association, for that matter) have with the proposal is the inclusion of international indirect land use impacts into the calculations of greenhouse gas emissions.

If you haven’t commented yet, better get your thoughts in now.

American soybean growers have netted an extra $2.5 billion over the past four years, thanks to demand for soybean-based biodiesel.

This story from Feedtuffs.com says a new United Soybean Board and soybean checkoff-funded study also found that biodiesel added 25 cents to the price of a bushel of soybeans:

Because the price of petroleum diesel has such a large influence on the price of biodiesel and soybean oil, the study asserts that the biodiesel industry has essentially created a new floor for soybean oil prices.

“Any lowering of the price of inputs for the animal agriculture industry is a plus,” Bainbridge said. “The swine and dairy industries have had a tough time lately. This is a benefit for them. Every little bit helps in the poultry and livestock industries as far as decreasing their costs. And this demonstrates how biodiesel demand can have a positive impact on this important aspect of our food supply.”

You can read the results of the study at the USB Web site.

The First Coop Association held a grand opening celebration today from 10 a.m. until 2 p.m. for their new ethanol and biodiesel pumps. The station, located on Hwy. 71 South in Sioux Rapids, Iowa featured free food and ethanol and biodiesel specials.

The First Coop Association is one of many stations to take advantage of the Renewable Fuels Promotional Assistance Program sponsored by the Iowa Corn Promotion Board, the Iowa Renewable Fuels Association (IRFA) and the Iowa Soybean Association. Through the Renewable Fuels Promotional Assistance Program, Iowa Corn and IRFA partners with retailers for grand openings for E85 and ethanol blender dispensers. Iowa Soybean and IRFA partners with retailers for grand openings for biodiesel dispensers.

Retailers interested in installing an E85 or biodiesel dispenser can apply for a grant from the Iowa Department of Economic Development.

There are currently 129 E85 facilities in the state of Iowa.

On a warm, clear summer evening in Central Missouri, the night air practically thunders to life as 3,000 horsepower of tractor-pulling power is started and modified machines of farm implement heritage rumble down a dirt track. While the behemoths of the National Tractor Pullers Association Midwest Extreme Truck and Tractor Pull are pushed to the limits of what an engine will do, they are doing it with a green blend of soybean-based B20 biodiesel.

This United Soybean Board (USB) and soybean checkoff sponsored event is a chance to highlight the great performance of the green fuel in these extreme conditions.

Domestic Fuel caught up with a couple of the players at the recent event in Jefferson City… corn & soybean farmer and puller Dennis Shramek, along with Donnie Bungart, who makes and runs the biodiesel-powered sleds… to get their thoughts on the sport and the biodiesel that fuels all that power.

You can hear their comments… and feel a bit of the biodiesel-fueled thunder… here: DFCast-9-04-09.mp3

You can also subscribe to the DomesticFuel Cast here.

What do you think of when you hear that there's a sled running on biodiesel? Probably not thinking tractor pull sled are you? Unless you're a tractor pull fan. Well those big machines that the tractors and trucks pull are also diesel powered and in Jefferson City, MO there's a company that manufactures them and runs them on biodiesel.

The company is Bungart Motor Sports and I learned about if from Donnie Bungart.

Donnie says they do over 160 shows a year around the country. At the Midwest Extreme Truck and Tractor Pull in Jefferson City he says they had two sleds in operation. He says they run B20 in them and have been for over 3 years very successfully. Donnie says they've had a lot of luck locating the fuel when they need it, especially at major truck stops.

So if you're not a tractor pulling enthusiast you might ask, "What's a sled?" Donnie says it's a weight transfer machine. It starts out not weighing much but as the tractor pulls it more and more weight is transferred which ultimately stops the tractor. At least we hope! Thanks again to the United Soybean Board for inviting me out to the tractor pull.

You can listen to my interview with Donnie below: