USDA Increases Corn Use for Ethanol

usda-logoDespite the Environmental Protection Agency proposal to lower corn ethanol volume obligations for 2014 under the Renewable Fuel Standard (RFS), USDA’s December supply/demand report is predicting a 50 million bushel increase in corn use for ethanol next year. Ending stocks are now expected to total 1.792 billion bushels, down 5 percent from last month’s estimate.

The new report also calls for increases in exports, food and seed use but ending stocks will still be more than double a year earlier with this year’s record crop of just under 14 billion bushels. Prices are expected to average $4.40 a bushel in the current year, down significantly from $6.89 last marketing year.

Ethanol By-Product as Biodegradable Kitty Litter

usda-logoResearchers at the U.S. Department of Agriculture (USDA) have found a way to turn a by-product of ethanol production into a biodegradable form of kitty litter. This news release from the Agricultural Research Service (ARS) says USDA plant physiologist Steven Vaughn and his colleagues are using dried distiller’s grains, DDGs, as a starting material for a more environmentally friendly alternative to nonbiodegradable clay-based litters.

In preliminary studies, Vaughn’s group tested “x-DDGs.” These are DDGs that, after being used for ethanol production, are treated with one or more solvents to extract any remaining, potentially useful natural compounds.

The team’s laboratory experiments yielded a suggested formulation composed of the x-DDGs and three other compounds: glycerol, to prevent the litter from forming dust particles when poured or pawed; guar gum, to help the litter clump easily when wet; and a very small amount of copper sulfate, for odor control.

The resulting litter is highly absorbent, forms strong clumps that don’t crumble when scooped from the litter box, and provides significant odor control, according to Vaughn. He’s based at the Agricultural Research Service (ARS) National Center for Agricultural Utilization Research in Peoria, Ill. ARS is USDA’s chief intramural scientific research agency.

This isn’t the first time corn or grains have been looked at to use for environmentally friendly cat litter. But this is the first time DDGs have been thoroughly examined for this purpose.

Vilsack Defends EPA’s Slashing of RFS

vilsackSecretary of Agriculture Tom Vilsack is defending the Obama Administration’s proposal to cut the 2014 Renewable Volume Obligations (RVOs) as part of the Renewable Fuel Standard (RFS) for the amount of renewable fuels to be blended into gasoline and diesel. But some of the people he spoke to, along with several biofuel advocates, are questioning the legality of the cuts. The Environmental Protection Agency 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.

In remarks before farm broadcasters during the 70th National Association of Farm Broadcasting Annual Convention in Kansas City, Vilsack said EPA’s unprecedented number of comments in the proposal shows how much the agency wants to work with the biofuels industry to make sure their fuels will work for American consumers.

“What EPA has done is essentially said ‘We are very interested in maintaining this industry, and we need information from the industry as to policies and programs, in addition to the RFS, that would allow this industry to be more sustainable and more profitable,'” Vilsack said, adding that as part of the comment period for this RVO proposal, the industry will get more input on policies.

As far as USDA is concerned, he said his folks will concentrate on parts of the industry they can control, pointing to programs such as Rural Energy for America Program (REAP), which provides funds for infrastructure to make sure those higher blends biofuels can be available.

“I think our challenge is to work with the industry … that they need work to create a distribution system, and that they can’t rely on the petroleum industry [to do it for them].”

When pressed by Michelle Rook of WNAX about the authority that EPA had to set RVOs lower than what the law allows, Vilsack, while pointing out he doesn’t run the EPA, said the law does allow for the waiving of statutorily mandated requirements.

“[EPA] would say the reason they are reducing the numbers is because we are at a point where the amount of fuel being consumed in this country is 130 billion gallons,” and when you figure on the distribution problems he said needed to be worked on that basically limit to a 10 percent ethanol blend, that caps how much the EPA can require. “That’s why the EPA went the extra mile of saying, ‘Hey, we have to figure out how to get more higher blends in the marketplace. Give us your ideas.'”

Vilsack pointed to how USDA is working with the EPA, the military and civilian aviation industries to expand biofuel use in those areas as his agency’s commitment to making sure the RFS and biofuels industries are successful.

You can hear Vilsack’s remarks specifically about the RFS here: Secretary Vilsack Press Conference comments on RFS

And you can hear the entirety of what he had to say to farm broadcasters here: Secretary Vilsack Press Conference

Beetle-Infested Trees to be Turned into Biofuel

usda-logoTrees lost to beetle infestations might not be a total loss; they could be turned into biofuels. The U.S. Department of Agriculture (USDA) awarded nearly $10 million in grants to a consortium of academic, industry and government organizations led by Colorado State University (CSU) to see if insect-killed trees in the Rocky Mountains could be a sustainable feedstock for bioenergy.

“Infestations of pine and spruce bark beetles have impacted over 42 million acres of U.S. forests since 1996, and a changing climate threatens to expand the threat from bark beetle on our forest lands,” said Agriculture Secretary Tom Vilsack. “As we take steps to fight the bark beetle, this innovative research will help take the biomass that results from bark beetle infestation and create clean, renewable energy that holds potential for job creation and promises a cleaner future for America.”

There are many benefits to using beetle-killed wood for renewable fuel production. It requires no cultivation, circumvents food-versus-fuel concerns and likely has a highly favorable carbon balance. However, there are some challenges that have been a barrier to its widespread use. The wood is typically located far from urban industrial centers, often in relatively inaccessible areas with challenging topography, which increases harvest and transportation costs. In addition to technical barriers, environmental impacts, social issues and local policy constraints to using beetle-killed wood and other forest residues remain largely unexplored.

CSU researchers, together with other scientists from universities, government and private industry in the region, created the Bioenergy Alliance Network of the Rockies (BANR) to address these challenges. The project will undertake comprehensive economic, environmental and social/policy assessment, and integrate research results into a web-based, user-friendly decision support system. CSU will collaborate with partners across four states to complete the project. Partners include: University of Idaho, University of Montana, Montana State University and the University of Wyoming, U.S. Forest Service Rocky Mountain Research Station, National Renewable Energy Lab and Cool Planet Energy Systems.

The release goes on to say that they are exploring recent advances in scalable thermochemical conversion technologies to produce advanced liquid biofuel and co-products on-site.

Vilsack also points out that this type of program highlights why a new farm bill is needed.

USDA Says Spring Canola is Good Biodiesel Crop

OLYMPUS DIGITAL CAMERAResearchers at the U.S. Department of Agriculture believe spring canola could be a good crop for biodiesel for producers in the drier parts of the Great Plains. This news release from the Agricultural Research Service says ARS agronomist David Nielsen and others are finding ways to stretch scarce water supplies and increase crop returns in that part of the country.

Nielsen, who works at the ARS Central Great Plains Research Station in Akron, Colo., worked with colleagues to combine existing plant growth computer models and generate spring canola production simulations. Then they ran their results from the combined model with 16 years of regional weather data, four different soil water levels at planting time, and other site-specific information to generate spring canola yield estimates for nine locations in Nebraska, Colorado and Kansas.

Results from their crop simulations suggested the highest yields would be produced in the north-central area near Champion, Neb., and the lowest yields would be produced in the south-central area near Walsh, Colo. When 75 percent of the soil water was available for crop use at planting, the model indicated six of the sites had more than a 70 percent probability of producing a canola seed yield of at least 900 pounds per acre.

The researchers found they could net anywhere from $67 to $189 per acre in returns, depending on plant-available soil water levels. They’ve also developed a simple decision support tool for canola production and economic analysis that can be used by farmers for canola planning.

Surplus US Sugar Sold to Ethanol Makers

usda-logoIn an effort to get rid of surplus sugar and produce green fuel, the US Department of Agriculture has sold a large block of the sweetener to ethanol makers. This article from Ethanol Producer Magazine says the government sold the sugar rather than just forfeiting it under the Feedstock Flexibility Program for Bioenergy Producers.

The program requires the USDA to purchase sugar and sell it as feedstock for bioenergy producers in order to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse community loans for them Commodity Credit Corp. Sugar purchased by the CCC under the program is sold on a competitive basis to bioenergy producers. The regulation establishing the program requires that purchasers use the sugar to produce biofuel, including ethanol, butanol or other marketable biofuels as CCD determines.

In this sale, USDA sold a reported 136 thousand tons of refined beet sugar to bioenergy producers through FFP, about a third of the nearly 377,000 tons that was offered by processors. While the government sold the sugar at a pretty steep loss of more than $53 million, that is less than if the USDA had to forfeit the sugar without the proceeds at all.

Rural Areas to REAP Benefits of Energy Projects

usda-logoFarmers, ranchers and small businesses in rural areas of 22 states will benefit from projects designed to use renewable energy, as well as conserve power. The U.S. Department of Agriculture (USDA) announced the latest round of grants and loans being made available through the Rural Energy for America Program (REAP).

“REAP continues to help farmers and rural businesses reduce their energy consumption and by doing so, improve the bottom line of their operations,” [Acting Under Secretary for Rural Development Doug] O’Brien said. “This important Farm Bill program and others like it would not be available without a comprehensive Food, Farm and Jobs Bill.”

The dozens of projects across the country approved for the REAP funds include nearly $50,000 for two biodiesel blending and pumping stations in Georgia, more than $31,000 for some E85 and biodiesel blender dispensers in Iowa, almost $60,000 to purchase equipment to make biodiesel in Indiana, and a $41,000 grant to assist with the installation of ground-mounted solar panels at a bed and breakfast in Arizona.

You can see the entire list of projects here.

USDA Announces Support for Advanced Biofuel Producers

usda-logoUSDA announced Thursday that the agency is making nearly $15.5 million in payments to support the production of advanced biofuel.

At the National Advanced Biofuels Conference in Omaha, USDA Rural Development Acting Under Secretary Doug O’Brien said 188 producers will received payments through the Advanced Biofuel Payment Program.

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

The funding is being provided through USDA’s Advanced Biofuel Payment Program, 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; vegetable oil; and animal fat.

Read more from USDA.

USDA Increases Corn Crop Forecast

Despite a slowly maturing corn crop impacted by late summer heat, USDA upped its production forecast for the crop this year by a little bit instead of lowering it.

corn-harvestCorn production is forecast at 13.8 billion bushels, up less than 1 percent from the August forecast and up 28 percent from 2012. If realized, this will be a new record production for the United States. Based on conditions as of September 1, yields are expected to average 155.3 bushels per acre, up 0.9 bushels from the August forecast and 31.9 bushels above the 2012 average. If realized, this will be the highest average yield since 2009.

“The ear count numbers are a lot higher than what we were looking at just a month ago,” said USDA Economist Joe Glauber. “We’re expecting prices to fall, for ending stocks to recover a lot from where they were.” USDA is now predicting an average price for 2013 of $4.80 per bushel, about $2 less than year.

“It is a huge improvement over last year when we produced less than 11 billion bushels,” said Geoff Cooper with the Renewable Fuels Association who said lower prices will help increase ethanol production next year. “As this new crop comes in and corn prices come down, it’s very likely we could see close to 14 billion gallons in production next year,” compared to just over 13 billion expected this year.

Brian Jennings of the American Coalition for Ethanol (ACE) noted that a record corn crop on the heels of the worst drought in 50 years “is further proof the Renewable Fuel Standard (RFS) is working and Congress should not repeal or reduce it.”

The corn harvest is just beginning in some areas this week but should be getting into full swing in the next few weeks as the crop hits maturity.

Record Corn Crop Forecast

Despite a wet spring causing a challenging start to the season, the 2013 corn crop is still looking to break new ground this year, according to the latest USDA production estimate out today.

corn-fieldCorn production is forecast at 13.8 billion bushels, up 28 percent from 2012. If realized, this will be a new record production for the United States. Based on conditions as of August 1, yields are expected to average 154.4 bushels per acre, up 31.0 bushels from 2012. If realized, this will be the highest average yield since 2009. Area harvested for grain is forecast at 89.1 million acres, unchanged from the June forecast but up 2 percent from 2012.

Renewable Fuels Association (RFA) CEO Bob Dinneen says the average yield, which would be the third-highest yield on record, is significant considering farmers had one of the slowest, wettest planting seasons on record. “After the disappointment of last year’s drought-stricken crop, farmers have responded by producing what is likely to be the largest crop of all time,” said RFA President and CEO Bob Dinneen. “By rapidly adopting new seed and equipment technologies over the past decade, this country’s corn growers have distinguished themselves as the most productive in the world.”

Brian Jennings, Executive Vice President for the American Coalition for Ethanol (ACE), says the quick recovery from last year’s devastating drought shows that the Renewable Fuel Standard is able to work as intended. “The RFS provides an economic incentive for scientists and farmers to innovate and sustainably deliver more corn, enabling the total U.S. corn supply to reach 14.5 billion bushels this year and making room in the market for adequate and affordable food, feed, and fuel,” Jennings said. “Since the RFS was originally enacted in 2005, these advancements have driven U.S. farmers to produce around 20 bushels more corn per acre than before.”

On a global scale, USDA is forecasting that grain production worldwide will hit 2.43 billion metric tons in 2013, up eight percent from last year and a new record.

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