Senate Ag Committee Approves USDA Nominees

usda-nomineesThe Senate Agriculture, Nutrition and Forestry Committee this week unanimously approved the nominations of Krysta Harden to serve as deputy secretary of agriculture and Robert Bonnie to serve as under secretary for natural resources and the environment.

The Renewable Fuels Association (RFA) congratulated Harden on her confirmation. “Krysta Harden is the right person for the job,” said Bob Dinneen, President and CEO of the RFA. “Her years as Chief of Staff at USDA, her work on Capitol Hill, and her vast understanding of value-added agriculture gleaned from years working for farmers and biofuels have all given her the knowledge and insight needed to fill this very important position as Deputy Secretary at USDA. Just as she has been confirmed in the past, we are eager to see her sweep through the approval process and look forward to her full confirmation by the U.S. Senate.”

Harden has been nominated to succeed Kathleen Merrigan in the second-highest post at USDA Bonnie, while Bonnie, who has been a senior advisor to Agriculture Secretary Tom Vilsack, would succeed Harris Sherman in the post of natural resources under secretary.

House Subcommittee RFS Hearing

The House Energy and Commerce Subcommittee on Energy and Power held a hearing Wednesday on the “Overview of the Renewable Fuel Standard: Government Perspectives.” The hearing featured testimony from the Energy Information Administration (EIA), U.S. Department of Agriculture (USDA) and the Environmental Protection Agency (EPA).

rfs-hearing-eiaAdam Sieminksi with the EIA, made several points during his testimony regarding the RFS. “The RFS program is not projected to come close to achievement of the legislated target that calls for 36 billion gallons of renewable motor fuels use by 2022,” he noted first, adding that “Substantially increased use of biofuels can only occur if they can be used in forms other than the low percentage blends of ethanol and biodiesel that account for nearly all of their current use.”

Read Sieminski’s testimony – listen to opening statement here: Adam Sieminksi, EIA

rfs-hearing-epaChristopher Grundler, Director of EPA’s Office of Air and Radiation, noted that the agency has expanded the number of approved fuel pathways to help meet the RFS “including the recent finalization of a rule that includes certain renewable fuels from camelina, ethanol from energy cane, and renewable gasoline from various feedstocks” adding that they have also “proposed a rule that will expand the opportunity for use of additional new advanced biofuels, including cellulosic fuels from landfill biogas and advanced biobutanol from corn.”

Read Grundler’s testimony – listen to opening statement here: Christopher Grundler, EPA

rfs-hearing-usdaUSDA Chief Economist Dr. Joe Glauber focused his testimony on the impact of the RFS on agriculture. “Driven by a combination of favorable market forces and government biofuel policies, including the RFS, the increase has spurred corn production and corn use for ethanol and has been one of the factors in the recent grain price boom and overall improvements in farm balance sheets including record farm incomes over the past few years,” said Glauber. Noting that while livestock, dairy and poultry producers have “faced more uneven, and in some cases, declining returns” since 2005, Glauber said the ethanol co-product DDGS has increased as a livestock feed and USDA anticipates pressures on corn prices to continue to mitigate as more alternative feedstocks are used for biofuel production.

Read Glauber’s testimony – listen to opening statement here: Joe Glauber, USDA

USDA Report Increases Corn for Ethanol Use

usda-logoThe latest World Agricultural Supply and Demand Estimates (WASDE) report from USDA lowers forecast corn production for the U.S. this year but increases corn for ethanol use estimates.

Stressing right up front that because planting is still underway projections are “highly tentative,” the report lowers the projected corn production number due to delayed plantings by 135 million bushels to 14.0 billion with the average yield projected at 156.5 bushels per acre, down 1.5 bushels from last month. “Despite rapid planting progress during mid-May across the Corn Belt, rains and cool temperatures since have delayed the completion of planting in parts of the western Corn Belt and raised the likelihood that seasonally warmer temperatures and drier conditions in late July will adversely affect pollination and kernel set in a larger share of this year’s crop.” As of June 10, USDA reported that 95% of the corn nationwide was planted, just about caught up to the five year average of 98%, and the crop condition is still rated mostly good to excellent despite the weather challenges.

The report increased the estimate for corn used in ethanol production this year by 50 million bushels to 6.35 billion on higher-than-expected May ethanol production as indicated by weekly data reported by the Energy Information Administration. “Those have been, just this past week, up close to 13.6 billion gallons on an annualized basis,” said USDA Chief Economist Joe Glauber. “That’s certainly kept demand stronger than what we were anticipating last month.” Favorable margins for ethanol producers and high prices for Renewable Identification Numbers (RINS) are also expected to moderate any slowdown in production through the end of the marketing year.

USDA: $98.6 Mil Available for Advanced Biofuels

usda-logoThe USDA is making available up to $98.6 million to support the production of advanced biofuels. This news release from the agency says it will be an opportunity for eligible producers to submit applications and strengthen the rural economy:

“The United States is on the path to a cleaner, more secure energy future,” [Agriculture Secretary Tom] Vilsack said. “By helping producers to support and expand the production of advanced biofuels, USDA is ensuring that Rural America is a key component of President Obama’s ‘all-of-the-above’ energy strategy to reduce the Nation’s reliance on foreign oil.”

The payments are provided through USDA Rural Development’s Bioenergy Program for Advanced Biofuels, commonly referred to as the Advanced Biofuel Payment Program. It was established in the 2008 Farm Bill to support the expansion of advanced biofuel production. Payments are made to eligible producers based on the amount of biofuel produced from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include crop residue; animal, food and yard waste; vegetable oils; and animal fat.

Producers use the payments to offset production costs and in some instances expand their operations. For example, in 2012, Sequential-Pacific Biodiesel, a biodiesel facility based in Salem, Ore., increased its annual production by approximately 1 million gallons, or about 20 percent. Sequential-Pacific primarily uses locally sourced waste vegetable oils in its production of biodiesel. The support USDA Rural Development provided through its Bioenergy Program for Advanced Biofuels helped the company buy equipment that increased the speed of production and pre-treatment of feedstock.

If producers didn’t apply for payments during the October 2012 application window, they may now apply for these payments for third and fourth quarter fiscal year 2013 production as well as for any applicable incremental production. Applications must be in by July 11, 2013. More information is available here on the Federal Register.

Since 2009, more than 275 eligible producers in 44 states have received payments.

REAP Deadline Extends, Creates More Biogas Opps

usda-logoThe U.S. Department of Agriculture extends the deadline on a program that could see more farmers, especially those in the dairy industry, turning livestock waste into energy. The deadline to submit for funds under the Rural Energy for America Program (REAP) and Dairy Industry Memorandum of Understanding has been extended to to May 31, 2013. During a teleconference moderated by Jerry Bingold from the Innovation Center for U.S. Dairy, the USDA’s Energy Policy Advisor for Rural Development Todd Campbell said this is a top priority of his agency.

“Taking biomass feedtsock and creating renewable energy, helping to implement enhanced manure management techniques, it not only helps our dairy farmers across the country to continue to be the great stewards of the land, it makes also makes real dollars and cents in their farming operations,” Campbell said.

Kelley Oehler, USDA’s Branch Chief Energy Division said the budget battles that have resulted in continuing resolutions, instead of real federal budgets, actually helped more money go to REAP.

“We’re still working with budget to identify the specific amount, but what I can tell you is it is significantly more than the [$20.8 million original amount announced in the March 29, 2013 deadline],” Oehler said.

More money meant they needed more time to give out the grants for things such as grants for under $20,000 programs, feasibility study grants (up to $50,000), and grants and combination grants-loans for things like biodigesters (which could be up to $500,000 for those digesters) that dairy farmers can use to turn waste into energy. Guaranteed loan-only deadlines remain at July 15, 2013. (More information available here.) Another program, the 9005 Program (for advanced biofuels payments made from things, such as biodigesters) will have a notice go out shortly that will have an additional 30 days, usually sometime in October.

Meanwhile, Campbell and Oehler praised the recent renewal of the Memorandum of Understanding (MOU) signed to accelerate the adoption of innovative waste-to-energy projects and energy efficiency improvements on U.S. dairy farms, both of which help producers diversify revenues and reduce utility expenses on their operations. The original MOU was signed in Copenhagen, Denmark, in 2009.

“Through the renewed commitment, the USDA, working with the Innovation Center for U.S. Dairy, will continue the research, development and deployment of these technologies that are helping to make dairy farmers’ operations more sustainable,” Campbell said.

Listen to an edited version of the teleconference here: USDA Teleconference on REAP

Advanced Biofuels Payments Go Out to Producers

USDA Rural Development LogoBiofuels producers in 38 states recently received payments from the U.S. Department of Agriculture. Acting Under Secretary for Rural Development Doug O’Brien made the announcement, pointing out these payments of nearly $14 million to 162 producers are still going out, even with the current budget cuts:

“These payments represent the Obama administration’s commitment to support an ‘all of the above’ energy strategy,” O’Brien said. “Producing advanced biofuels is a major component of the drive to take control of America’s energy future by developing domestic, renewable energy sources.”

The funding is being provided through USDA’s Bioenergy Program for Advanced Biofuels, which was established in the 2008 Farm Bill. Under this program, payments are made to eligible producers based on the amount of advanced biofuels produced from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include but are not limited to: crop residue; animal, food and yard waste material; vegetable oil; and animal fat. Biofuel can be from a variety of non-food sources, including waste products.

Biodiesel Magazine reports most of the current payments are to biodiesel producers.

In the five years the program has been in effect, the USDA says more than 280 producers in 45 states and territories have received $192.5 million, supporting the production of more than 3 billion gallons of advanced biofuels. A full list of payees is available here.

New Yeast Strain Could Cut Cellulosic Ethanol Costs

Liu1Researchers at the U.S. Department of Agriculture have developed a new strain of yeast that could cut the costs of cellulosic ethanol production. This Agricultural Research Service (ARS) news release says the work is being done at the agency’s National Center for Agricultural Utilization Research in Peoria, Ill.

ARS molecular biologist Zonglin Lewis Liu and his colleagues determined that this yeast strain can break down and ferment the sugars in corn cobs left behind after the compound xylose—which is sometimes used for industrial activities—has been extracted. The new strain of yeast, Clavispora NRRL Y-50464 (Y-50464), can tolerate cob-derived compounds that interfere with yeast growth and fermentation rates.

It is able to grow rapidly at 98.6 °F, so it thrives at the higher temperatures needed to optimize simultaneous saccharification and fermentation (SSF) rates. SSF is a one-step process in cellulosic ethanol production that combines releasing and fermenting feedstock sugars…

The scientists added the enzymes cellulase and beta-glucosidase, which are often used to break down residues and extract sugars, and observed that Y-50464 reached its peak ethanol production rate of 25.7 grams per liter 5 days after the experiment began. But the yeast actually produced more ethanol, 26.6 grams per liter in 5 days, without the addition of beta-glucosidase.

Confirmation of beta-glucosidase in Y-50464 will eliminate the need to include the cost of that additional enzyme to the process.

USDA Renews Dairy Energy Pact

Agriculture Secretary Vilsack today renewed a historic agreement with U.S. dairy producers to accelerate the adoption of innovative waste-to-energy projects and energy efficiency improvements on U.S. dairy farms, both of which help producers diversify revenues and reduce utility expenses on their operations. The pact extends a Memorandum of Understanding signed in Copenhagen, Denmark, in 2009.

usda-logoUSDA support for agricultural and waste-to-energy research has played a key role in the agreement’s success to date. Since signing the MOU, USDA has made nearly 180 awards that helped finance the development, construction, and biogas production of anaerobic digester systems with Rural Development programs, such as the Rural Energy for America Program (REAP), Bioenergy Program for Advanced Biofuels, Business and Industry Guaranteed Loan Program, Value Added Producer Grants, amongst others. These systems capture methane and produce renewable energy for on-farm use and sale onto the electric grid. Additionally, during this period, USDA awarded approximately 140 REAP loans and grants to help dairy farmers develop other types of renewable energy and energy efficiency systems at their operations.

Anaerobic digester technology is a proven method of capturing methane from waste products, such as manure, and converting into heat and electricity. The technology utilizes generators that are fueled by the captured methane. Dairy operations with anaerobic digesters routinely generate enough electricity to power hundreds of homes per year.

The Secretary was joined on a conference call to make the announcement by The Innovation Center for U.S. Dairy CEO Tom Gallagher and Doug Young, a farmer from NY who has benefited from this MOU.

Listen to that call here: USDA/Dairy MOU press call

Vilsack, LaHood Extend Aviation Biofuels Commitment

vilsack-lahood3Two members of Pres. Obama’s cabinet today have signed their names to an agreement that will extend the administration’s commitment to the production of biofuels for use in airplanes. Secretary of Agriculture Tom Vilsack and Transportation Secretary Ray LaHood have extended by five years the “Farm to Fly” program, an initiative to partner the USDA and Federal Aviation Administration (FAA) to help develop a viable biofuel for the aviation industry.

During remarks at the ceremony at the Advanced Biofuels Leadership Conference (ABLC) near Washington, D.C., Vilsack said this is a real job producer, especially for rural parts of the country.

“By continuing to work together to produce American made ‘drop-in’ aviation fuels from renewable feedstocks, we will create jobs and economic opportunity in rural America, lessen America’s reliance on foreign oil and develop a thriving biofuels industry that will benefit commercial and military enterprises,” Vilsack said. “USDA is pleased to partner with the FAA in our quest to develop alternatives to fossil-based fuel, which is critical to reducing carbon emissions and protecting the environment.”

LaHood pointed out that it’s been the hard work of people in attendance at the ABLC that made this agreement even a possibility.

“Through the use of sustainable alternative jet fuels, we are showing the world that we can come together to solve our greatest environmental challenges,” said LaHood.

vilsack-lahood4During a news conference after the signing, Vilsack said that while there are some that want to derail the renewable fuels industry through the destruction of programs such as the Renewable Fuels Standard (RFS), he remains one of biofuels’ biggest allies.

I asked Vilsack how they overcome objections from automakers who don’t approve of E15 for most cars on the road, and he bristled and remained steadfastly behind the studies that show it would work in model years 2001 and after.

“The testing would suggest that there would not be damage to the engines. And I think if consumers were given the option, consumers would choose [E15] because they want to be supportive of a domestic fuel industry.”

And while there might be some who dispute on how much renewable energy is saving consumers and creating jobs, Vilsack said there are some things that are crystal clear.

“I am positive consumers benefit from this. I am positive that hundreds of thousands of jobs are connected to this industry. And I am positive that it has stabilized farm income,” he said.

Listen to Vilsack and LaHood’s remarks here: Secs. Vilsack and LaHood at ABLC

USDA Increases Corn for Ethanol Use

usda-logoThe latest World Agricultural Supply and Demand Estimate released this week increased 2012-13 year-ending corn stocks and corn use for ethanol.

Domestic corn use for 2012/13 is projected 100 million bushels lower as a 50-million-bushel increase in corn used to produce ethanol partly offsets the lower projection for feed and residual disappearance. Larger-than-expected March
1 corn supplies, lower corn prices, and favorable margins for producing and blending ethanol limit the expected year-to-year decline in ethanol production during the second half of the marketing year (March-August).

The report also projects higher world corn production, increasing 1.5 million tons for Brazil, 1.4 million tons for Europe with upward revisions to production in Spain, Hungary, and Poland and a bit more for Russia on the final government estimate.

Oversupply Could Provide US Sugar for Ethanol

Ethanol producers could get a sweet deal on sugar for ethanol if the administration approves the sale of up to 400,000 tons of surplus sugar under the 2008 Farm Bill Farm Bill Feedstock Flexibility Program.

naaj-vilsackThe program allows USDA to buy the surplus sugar and then sell it to ethanol producers at a loss in order to keep prices from going below mandated levels, but it has never been used. With large crops in the United States and Mexico causing sugar futures prices to fall below 21 cents a pound, USDA last week a proposal to the White House budget office to implement the program. “We’re doing it because it’s the law,” said Agriculture Secretary Tom Vilsack on Monday during a meeting of agricultural journalists.

However, Vilsack said it is not yet decided how much, if any of it will be used. “We’ll make that decision following a review of all the circumstances,” he said. “This is an issue where we have a significant oversupply and we have some issues that need to be resolved fairly quickly.” Those issues include storage challenges and minimizing the cost to taxpayers.

Listen to Vilsack comments here: Secretary Vilsack on sugar-to-ethanol

Ethanol Blender Pumps Funds Now Available

Federal money to help offset the costs of putting in ethanol blender pumps is being made available. The Renewable Fuels Association (RFA) announced the USDA is now accepting applications for federal Rural Energy For America Program (REAP) funds to help gasoline retailers install blender pumps, the third year that blender pumps have been authorized as part of the REAP program and part of the USDA’s plan to have 10,000 blender pumps installed over the next five years.

RFA-logo-13“This program provided funding for hundreds of blender pumps the past two years, providing many consumers with the choice and flexibility they deserve to pick the ethanol blends that work for them based on their vehicle, their beliefs, and their budget,” said RFA Director of Market Development Robert White.

ACElogo“We can continue to break the stranglehold oil has over our nation’s economy and energy future by giving consumers more options at the pump,” said ACE Senior Vice President Ron Lamberty. “The USDA’s announcement together with the efforts of the [Blend Your Own (BYO)] ethanol campaign will go a long way toward making that happen.”

The RFA and ACE are offering free grant writing services to those interested in applying. Applications for the grant program are due on April 30, 2013.

Partnership for Sustainable Cellulosic Feedstock Harvesting

USDA has announced a new collaboration with DuPont to promote sustainable harvesting of bio-based feedstocks for cellulosic ethanol.

DuPont_logoThe joint agreement between USDA’s Natural Resource Conservation Service (NRCS) and DuPont aims to set voluntary standards for the sustainable harvesting of agricultural residues for renewable fuel, and supports rural job creation, additional income for farmers, bio-based energy development, and the safeguarding of natural resources and land productivity.

usda“USDA and DuPont share a common interest in the wise use and management of soil, water and energy resources,” said Agriculture Secretary Tom Vilsack. “Both organizations also share an interest in helping individual farmers adapt to new market opportunities in ways that are consistent with the wise use of these natural resources.”

“Working with farmers is critical to maximizing the land’s productivity and protecting natural resources,” said Jim C. Borel, executive vice president of DuPont. “With this new collaboration, we have a partner in the Natural Resources Conservation Service to ensure that the collection of corn stover for the production of cellulosic renewable fuel makes sense for an individual grower’s operation and the land they farm.”

Under the agreement, NRCS will provide conservation planning assistance for farmers who supply bio-based feedstocks to biorefineries as the industry begins to commercialize. Conservation plan, written for individual operations, will ensure sustainable harvest of corn crop residues while promoting natural resource conservation and land productivity. A conservation plan is a voluntary document, written in cooperation with farmers, which helps them protect natural resources while promoting a farm’s economic sustainability.

Farmers Expect to Plant Most Corn and Soybeans Ever

According to the USDA 2013 Prospective Plantings report, farmers intend to plant a little more corn and a little less soybeans this year, for a total of 174.4 million acres.

“This will be the highest total amount of acres for those two crops that we have on record,” said USDA chief economist Joe Glauber.

usda-logoCorn growers intend to plant 97.3 million acres of corn for all purposes in 2013, up slightly from last year and 6 percent higher than in 2011. If realized, this will represent the highest planted acreage in the United States since 1936 when an estimated 102 million acres were planted. “While farmers struggled with drought last year, they remain resilient and dedicated to producing an abundant corn crop in 2013,” National Corn Growers Association First Vice President Martin Barbre said. “This report shows that the innovative American farmer understands the increasing global demands of corn for food, feed, fuel and fiber and that they see the importance of meetings those needs.”

The majority of acres gained lie outside of the traditional Corn Belt, with only Minnesota, North Dakota and Ohio projecting increased acreage planted to corn within that area. Acres planted to corn outside of the Corn Belt made gains in Arkansas, Georgia, Texas and Mississippi. Final planting projections remained close to last year’s acreage as Colorado, Illinois, Indiana, Kansas, Missouri, Nebraska and South Dakota all project planting at least 100,000 fewer acres than in 2012, with Illinois projecting acres planted to corn will drop by 600,000 acres from 2012. The actual number of planted acres will be released in USDA’s June 28 report.

Soybean acres are estimated at 77.1 million acres, down slightly from last year but the fourth highest on record.

Corn Use for Ethanol Steady

Projected 2012/13 U.S. corn ending stocks were unchanged in the World Agricultural Supply and Demand Estimate report out Friday, lowering exports but increasing feed use and keeping corn use for ethanol the same.

usda-logoProjected corn use for ethanol this season remains unchanged at 4.5 billion bushels, which is down 10 percent from last year on lower gasoline use, according to USDA Deputy Chief Economist Rob Johansson. “Obviously we expect that will increase towards the end of this year when the new crop comes in,” said Johansson.

Corn exports were lowered 75 million bushels, imports were increased 25 million, and feed usage was increased by 100 million – due in part to “continued expansion in poultry production.” The projected season-average farm price for corn was lowered by 20 cents a bushel to $6.75-7.45.