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.

Vilsack at Biodiesel Conference

Agriculture Secretary Tom Vilsack went from the National Ethanol Conference to the National Biodiesel Conference today in Las Vegas.

Vilsack addressed a standing room only crowd during the final day of the 10th Annual National Biodiesel Conference & Expo in Las Vegas. Beginning his second term as part of the Obama Administration, prior to taking this position he was the Governor of Iowa. Vilsack has been a leader in the support of biofuels since taking office as Governor and has continued in his current role.

vilsack-nbbVilsack said that the biodiesel industry is helping the country become secure through its innovation and products and also helping to create a new biobased economy.

There is a huge fight against the Renewable Fuel Standard (RFS). Vilsack noted that there are some who say it needs to be changed because it’s not reliable and not effective, when in fact it’s exactly the opposite. “This standard is working. It’s doing what’s its supposed to do. It’s helping to create an industry that supports jobs, improves incomes, reduces alliance on foreign oil, and gives consumers choice. It’s working,” said Vilsack.

He also noted that the reason why the biodiesel industry is being challenged is because they are winning. “Trust me,” he said. “If you were losing no one would be paying attention to you. But there is more work to do to meet these challenges.”

Vislack ended his remarks by giving the industry a couple of ideas. One of the most critical, he said, is that it is important to engage people at the state and local level to explain to them the benefits of this industry.

You have the capacity to reignite a new century of innovation and to help redefine and revitalize the American economy, said Vilsack. “And this is worth fighting for.”

Listen to Secretary Vilsack’s remarks at the biodiesel conference here: Industry Engagement Critical

2013 National Biodiesel Conference Photo Album

See more coverage on the Biodiesel Conference Blog

Taking Corn Cobs for Biofuels Won’t Hurt Soil Quality

corncobsConcerns over hurting the soil quality when harvesting some crop residues for cellulosic biofuels, instead of leaving the residues on the fields to help the soil quality, might be unfounded. U.S. Department of Agriculture (USDA) research says that soil quality would not decline if post-harvest corn cobs were removed from the field.

“Crop residues have many useful functions when left in the field, [including] protecting against water and wind erosion [and] may contain essential nutrients for crop growth that can be recycled back into the soil,” among others says Agricultural Research Service (ARS) soil scientist Brian Wienhold, who conducted the study. But his work compared runoff rates and sediment loss from no-till corn fields where postharvest crop residues were either removed or retained and found no significant difference between fields’ sediment loss rates with and without the cobs. The cobs did slightly delay field runoff.

The study concluded that cobs could be removed from other residue and used for bioenergy feedstock without significantly interfering with the role of crop residues in protecting soils. But Wienhold cautions that you need to make sure you balance taking any residue off the fields with the potential benefits and losses it could cause.

Listen to Wienhold’s comments to USDA here: ARS soil scientist Brian Wienhold

USDA Undersecretary Optimistic About Biofuels

iarfa-13-dallasUSDA Undersecretary for Rural Development Dallas Tonsager is optimistic about the future of biofuels.

“When faced with an economic challenge, rural Americans came up with an economic solution and developed a biofuels industry,” Tonsager said in an interview after speaking to the Iowa Renewable Fuels Summit. “My belief is, as time goes along and we’re faced with challenging circumstances again, people will come up with solutions again.”

Tonsager sees success coming in the cellulosic biofuels world which should begin to demonstrate its economic viability as well. “We’ve got a lot of challenges in ethanol,” he said. “But the industry is stepping up and fighting and I think that is an extremely positive sign.”

Listen to an interview with Tonsanger here: USDA Undersecretary Dallas Tonsager

IRFA Renewable Fuels Summit Photo Album

Vilsack to Keynote Ethanol Conference Again

rfa-vilsackThe ethanol industry will help Agriculture Secretary Tom Vilsack kick off his second term in the Obama administration when he visits the 18th Annual National Ethanol Conference of the Renewable Fuels Association (RFA) next month in Las Vegas. Vilsack was also the keynote speaker at the 2012 ethanol conference.

“We congratulate Secretary Vilsack as he begins his second term. He is a well-spoken, highly credible voice for the Obama Administration and for American renewable fuels. As only a former Governor and current Secretary could do, he speaks eloquently about the importance of energy independence from foreign oil, investment in the next generation of biofuels, and the powerful role the ethanol industry plays in rural economic development. We are honored to host him at the National Ethanol Conference,” said Bob Dinneen, RFA President and CEO.

The National Ethanol Conference will be held February 5-7 in Las Vegas and a $100 discount on early registration is still available until January 19.

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

USDA Invests in Bioenergy Research Projects

vilsack-renmatixAgriculture Secretary Tom Vilsack visited a state-of-the-art bioindustrial facility in Pennsylvania on Friday, where he announced $25 million to fund research and development of next-generation renewable energy and high-value biobased products from a variety of biomass sources.

“USDA’s continuing investments in research and development are proving a critical piece of President Obama’s strategy to spur innovation of clean bioenergy right here at home and reduce our dependence on foreign oil,” said Vilsack. “The advances made through this research will help to boost local economies throughout rural America, creating and sustaining good-paying jobs, while moving our nation toward a clean energy economy.”

Vilsack made the announcement while visiting Pennsylvania-based Renmatix, a leading manufacturer of cellulosic sugars for biobased chemical and fuel markets, for the commissioning of the company’s BioFlex Conversion Unit, a multiple-feedstock processing facility at the company’s King of Prussia headquarters.

The four projects approved for investment are:

Kansas State University – $5,078,932 The goal of this project is to make the oilseed crop camelina a cost-effective biofuel and bioproduct feedstock.

Ohio State University – $6,510,183 This project will result in an anaerobic digestion system for the production of liquid transportation fuels and electricity from animal manure, agricultural residues, woody biomass and energy crops.

Ceramatec, Inc., Salt Lake City, Utah – $6,599,304 This project will convert lignocellulosic biomass to infrastructure-compatible renewable diesel, biolubricants, animal feed and biopower. New hybrids of energy sorghum will be developed, and other biomass resources include switchgrass and forestry residues.

USDA-Agricultural Research Service, Eastern Regional Research Center, Wyndmoor, PA – $6,865,942 ARS scientists will develop an on-the-farm distributed technology for converting forest residues, horse manure, switchgrass and other perennial grasses into biofuels and high-value specialty chemicals.

World Corn Supply and Demand

USDA’s World Agricultural Supply and Demand Estimate (WASDE) out this week left corn stocks unchanged but lowered the season average price estimate by 20 cents to $7.40 per bushel.

USDA maintained corn ending stocks in the U.S. for the marketing year at a tight 647 million bushels, which is about three weeks worth of supply. Globally, USDA slightly lowered the projection for corn ending stocks in the current marketing year to 117.6 million metric tons, which is down 13.4 million from last marketing year. However, global coarse grains production was actually increased 7.9 million metric tons, as China reported a corn crop four percent larger than the November estimate.

“The drought reduced production by four billion bushels from what we thought earlier this year,” said USDA Chief Economist Joe Glauber. “No question that’s rationed demand and we’ve seen a really tight stock situation.”

Glauber says margins for ethanol producers have been very tight this year. “If you look at ethanol production, it’s been below 13 billion gallons on an annualized basis, if you look at weekly production numbers, and that reflects the lower margins for sure,” he said. Corn use for ethanol is forecast at 4.5 billion bushels, 10% lower than last year.

According to the Renewable Fuels Association, the U.S. ethanol industry is projected to use 78.9 million metric tons of grain (net distillers grains) or less than three percent of the world grain supply – the lowest rate in five years. “Further, more grain will be available for non-ethanol use than any other time in history with the single exception of last year,” said RFA Vice President, Research and Analysis Geoff Cooper. “In fact, grain available for non-ethanol use in 2012/13 will be 15% higher than 10 years ago in 2003/04. Meanwhile global population grew 9.8% during this period.”

Census of Ag to Ask About Renewable Energy, Biomass

The USDA’s 2012 Census of Agriculture forms soon will be going out to farmers and ranchers across the country, and this year, the survey will be asking asking about renewable energy and biomass.

“We’re asking for more details on whether farmers are using solar, wind… what type of energy, and some of the crops they’re growing to produce biomass,” says Renee Picanso, Director of the USDA’s Census and Survey Division, asking that those surveyed return their census by Feb. 4, 2013. During an interview at Trade Talk at the National Association of Farm Broadcasting convention, she added that also new this year will be the opportunity to fill out the survey over the internet, something they believe will help response rates. “I hope so, because it leads you through the questions, and if you go on the internet, it will skip through the questions [not relevant to your operation].”

Picanso stresses that it’s very important for producers to respond because the survey helps USDA determine policy, as well as how it helps rural communities and agribusinesses. Results should be released in February 2014.

Listen to Cindy’s interview with Renee here: Renee Picanso, USDA Census and Survey Division

Algae Producers Look to Market By-Product of Biodiesel

Just as ethanol producers have been able to market the co-product dried distillers grains (DDGs) as livestock feed, those folks producing algae for biodiesel want to find more uses for what’s leftover once you get the fuel out.

“The Departments of Energy and Defense have been interested in producing biofuels, both jet fuels and transportation fuels from algae,” Texas A&M’s Tyron Wickersham told USDA reporter Rod Bain. “We began looking into [by-product of algae] to figure out a way to market or place the co-product into some useful market that could make use of those nutrients, and they naturally turned to livestock with an emphasis on beef cattle.”

Wickersham’s colleague at Texas A&M, Merritt Drewery, explained they are experimenting with feeding the algae by-product directly or mixing it with DDGs or cotton seed. “And this project actually told us that algae was palatable, because they ate it here.”

The researchers are already noting in their study that the algae co-product has a high-protein content.

Listen to Rod Bain’s report here: USDA Report on Algae Biodiesel By-Product as Livestock Feed

Supply & Demand of US/World Coarse Grains

A highlight for the 2012 Export Exchange was Dr. Joe Glauber’s comments on the supply and demand of the United States and worlds coarse grains. Dr. Glauber is the Chief Economist for the United State Department of Agriculture. Attendees from across the world listened as he discussed the aftermath of the US drought and the goals for price moderation worldwide.

“No surprise I talked about the drought and the effect on corn and soybeans primarily. This was a global conference so wheat, as well. Clearly the drought was a the big story this summer. It certainly affected prices. As we look forward I think the key thing in terms of price moderation is the world is now turning to the South American soybean crop and we should have more information on that in the next couple months. The real issue will be what it means for spring planting here in the United States. I think given these prices we are going to see strong acreage again for corn and soybean. Hopefully we’ll see better yields and some rebuilding of stocks and some moderation of prices because the livestock side of the sector has been hit pretty hard.”

Listen to my interview with Dr. Glauber here: Joe Glauber Interview

Of particular interest to the ethanol industry, Dr. Glauber spent several minutes of his presentation discussing how the drought, corn prices and other factors have influenced ethanol production this year, as well as some insight on the blend wall and the Renewable Fuel Standard (RFS). Listen to that portion of his remarks here: Joe Glauber ethanol comments

Listen to Dr. Glauber’s entire presentation here: Joe Glauber at Export Exchange

You can find photos from this years Export Exchange here: 2012 Export Exchange