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

USDA Announces 6th Regional Biofuels System

The U.S. Department of Agriculture today announced a research grant to develop next generation biofuels in the Northeast.

Agriculture Secretary Tom Vilsack today awarded Pennsylvania State University a five-year research grant valued at roughly $10 million to develop biomass supply chains for the production of liquid transportation and aviation biofuels in the Northeast. This is the sixth such award made through USDA’s Agriculture and Food Research Initiative (AFRI), aimed at developing regional, renewable energy markets, generating rural jobs, and decreasing America’s dependence on foreign oil. In September 2011, the Secretary announced five major AFRI grants for the formation of five regional systems in the Pacific Northwest, the Northwest, Northern states, Southern states, and the Southeast. Today’s announcement underscores USDA’s support for public and private research in building the framework for a competitively-priced, American-made biofuels industry in every major American region.

During a press conference this morning, Vilsack said the goal is to develop alternatives to corn-based ethanol, with each different part of the country focused on different feedstocks and production methods. “This particular project is going to look at miscanthus and switchgrass and willow,” said Vilsack. “It’s possible that we can grow these biomass products on strip mines to restore the land or on marginal flood plane lands.”

Vilsack noted that the project will include support from a number of different educational institutions and companies, including Ernst Conservation Seeds, Case New Holland, Praxair, Inc., Idaho National Lab, Mascoma Biofuels, Primus Green Energy, and Double A Willow. “All of these companies are identifying feedstocks or processing by which these feedstocks can be grown and harvested, so it’s a coordinated effort,” said Vilsack.

Listen to Vilsack’s press conference here: USDA Pennsylvania Biofuels Announcement

Vilsack Defends Ethanol at Dairy Expo

Secretary of Agriculture Tom Vilsack held a town hall meeting at World Dairy Expo in Madison, Wisconsin this week and took questions from the audience, one of which concerned ethanol and the impact it has had on livestock producers.

The questioner, who was from California, said ethanol was “not a very popular word” with dairy farmers in her state. “Where I come from ethanol is not a four letter word,” Vilsack responded, noting that ethanol has not only helped increase profitability and production for farmers but also helped the economy, national security, and the environment. “Those are the benefits – jobs, higher incomes, lower gas costs, environmental benefits and reduction of our reliance on foreign oil,” said Vilsack.

The secretary also carefully explained that because ethanol returns livestock feed to the market in the form of distillers grains (DDGS). “We hear a lot of people say that 40% of the corn crop is being used for fuel production but it’s not really 40% because a third of it comes back in DDGS which is used by the livestock industry,” he said. “So, it’s less than 40%, more like 27 percent.”

In addition, Vilsack talked about how USDA is helping the industry move into the production of advanced ethanol using feedstocks beyond corn. “We have financed at USDA nine separate biorefineries that use corn stover, algae, switchgrass, woody biomass, agricultural waste, municipal waste,” he said.

Vilsack also defended the Renewable Fuel Standard (RFS) and the current request before EPA to waive that standard, noting that Congress passing a new food, farm and jobs bill would do more to help livestock producers impacted by high feed costs due to the drought than waiving the RFS would.

Listen to or download Vilsack’s comments here: Ag Secretary Vilsack on ethanol at Dairy Expo

Biofuels Help Boost Co-op Income

USDA celebrated October National Cooperative Month and the United Nations International Year of Cooperatives with the release today of the top agricultural cooperatives and their revenues for 2011.

According to the release, farmer, rancher and fishery cooperatives posted record sales last year of $213 billion and $5.4 billion in net income, surpassing the previous record sales year of 2008 by $10 billion while besting the old income record by $500 million.

“These new cooperative sales and income records for 2011 underscore the strength and productivity of the nation’s farmer- and rancher-owned cooperatives, and the vital role they play in the nation’s economy,” said Dallas Tonsager, under secretary for Rural Development. “Primarily because of mergers, the number of farm co-ops continued to decline, but memberships and asset values are up.” Tonsager also noted that co-op employment levels remained strong, with cooperatives employing 184,000 full-time, part-time and seasonal workers, up slightly from 2010.

CHS Inc. of Saint Paul, Minn – an energy, farm supply, grain and food co-op – was once again the nation’s largest ag co-op, with $36.9 billion in revenue in 2011, up by a whopping 50% from 2010. Part of the CHS cooperative portfolio is CHS Renewable Fuels Marketing, a leading ethanol marketer, and that part of the business helped the co-op boost revenues in 2011. The fourth ranked agricultural cooperative, GROWMARK, also markets biofuels under its energy division.

While not included under the list of agricultural cooperatives, Tonsager notes that “many of the ethanol plants across the country, or biofuels projects, either are cooperatives or cooperative-like institutions, where they are limited liability companies that have a democratic vote.”

Listen to or download Tonsager’s remarks here: USDA Under Secretary Dallas Tonsager

Fuel Prices Are Impacting Farms and Businesses

Our latest ZimmPoll asked the question, “Have high fuel prices had an impact on your farm/business?”

Our poll results: Sixty-four percent said Yes, big impact on our budget; fourteen percent said Yes, minimal impact on our budget; twelve percent said No, not yet; and ten percent said No, don’t expect any.

Our new ZimmPoll is now live and asks the question, “What grade would you give the new student lunch program? Tell us why with a comment.” New government nutrition standards, which went into effect this year in a bid to combat childhood obesity, require schools to serve more variety and larger portions of fruits and vegetables. What do you think – are these new lunches a good thing or will students just toss more food in the trash can?

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

Vilsack Frustrated by No Farm Bill

Congress left town last week without even considering a new farm bill in the House, leaving the current bill to expire at the end of this month. House Speaker John Boehner (R-OH) said they would deal with a farm bill after the election because he did not believe there were 218 votes to pass either an extension or new legislation.

“It just didn’t have to be,” said a frustrated Secretary of Agriculture Tom Vilsack on Friday. “They would have had 218 votes if they had worked it. It’s really unfortunate.”

Vilsack believes this is a set back to a thriving rural economy. “Rural America has great momentum that’s been built with record exports, record conservation acres, record expansion in biofuels and biobased products,” he said. “We want to add to that momentum and what we’re doing now is creating this uncertainty which creates a real problem for momentum to continue.”

Vilsack fears that Congress will not pass a new farm bill during the lame duck session, meaning the measure would have to wait until the new Congress, which means the already passed Senate bill would be dead and they would have to start from scratch.

USDA Report Release Times to Change

USDA is changing the release time of certain key statistical reports beginning in January 2013.

According to a USDA news release the National Agricultural Statistics Service (NASS) and World Agricultural Outlook Board (WAOB) will begin issuing several major USDA statistical reports at 12:00 p.m. EDT beginning in January 2013. The current USDA release time of 8:30 a.m. EDT will remain in effect until January 1, 2013. USDA statistical reports affected are: World Agricultural Supply and Demand Estimates, Acreage, Crop Production, Grain Stocks, Prospective Plantings, and Small Grains Summary. The time for livestock reports currently released at 3:00 p.m. will not change.

USDA officials made the decision about the release times after considering nearly 150 comments submitted by stakeholders during a 30 day comment period between June 8 and July 9, 2012. “USDA considered all comments and thanks everyone for their thoughtful suggestions,” said USDA Chief Economist Joseph W. Glauber. “The shift to a noon release allows for the greatest liquidity in the markets, provides the greatest access to the reports during working hours in the United States, and continues equal access to data among all parties.”

USDA Slightly Lowers Corn Crop

USDAThe September crop production forecast from the U.S. Department of Agriculture slightly lowers this year’s drought stricken corn crop to 10.7 billion bushels, with an average yield of 122.8 bushels per acre – the lowest since 1995. That would still be the eighth-largest corn crop in history, despite the worst drought conditions in more than 50 years.

On the demand side, the latest World Agricultural Supply and Demand Estimate increased 2012/13 livestock feed demand by 75 million bushels to 4.15 billion. Corn use for ethanol and co-products was unchanged at 4.5 billion bushels. However, the Renewable Fuels Association (RFA) notes that because about one-third of every bushel of corn used for ethanol returns to the feed market as distillers grains, feed use will account for approximately 5.5 billion bushels in 2012/13 on a net basis, compared to net corn use for ethanol of 3.15 billion.

“This report should bring some calm and increased certainty to the markets,” said RFA President Bob Dinneen. “With each passing day, we have a better sense of the size of this year’s crop. We are thankful that it appears very little additional damage was done to the corn crop in late August and early September. It is truly remarkable that even in the face of the worst drought in 50 years and the hottest July in recorded history, U.S. farmers were able to produce a corn crop of this size. This morning’s report also clearly shows that all end users are sharing in the pain and participating in demand rationing. The notion that the ethanol industry is somehow insulated from demand rationing because of the RFS is shown to be patently false, with ethanol use projected down 10% from last year and feed use reduced by less than 6%.”

Globally, USDA is projecting the second-largest corn crop in history. Production in Argentina is up more than 30% over last year, while Mexico increased output 19%, South Africa 17%, Canada 9%, and China 4%. At 2.71 billion metric tons, USDA is also expecting the total 2012/13 grain supply (coarse grains, wheat, and rice) to be the second-largest ever. The U.S. ethanol industry is expected to use just 2.9% of the global grain supply in 2012/13.

Ag Secretary Highlights Biofuels During US Ship Visit

US Agriculture Secretary Tom Vilsack went aboard the USS Monterey at the Naval Station Norfolk to highlight the commitment the military is making to advanced biofuels. He was joined by Deputy Assistant Secretary of the Energy for Navy Tom Hicks.

“Developing the next generation of advanced biofuels for our nation’s military is both a national security issue and aneconomic issue,” said Vilsack. “By utilizing renewable energy produced on American soil, our military forces will become less reliant on fuel that has to be transported long distances and often over supply lines that can be disrupted during times of conflict. Meanwhile, a strong and diverse biofuels industry will support good-paying jobs in rural America that can’t be shipped overseas. Through this joint effort, USDA and the U.S. Navy have the opportunity to create a model for American energy security while ensuring the safety of our troops and the long term viability of our armed forces.”

“Secretary Vilsack’s leadership and the work carried out by USDA on alternative fuel is so critical to the Navy’s efforts to address a critical military vulnerability; our reliance on foreign oil,” stated U.S. Navy Secretary Ray Mabus.

Earlier this summer, the U.S. Navy’s “Great Green Fleet,” a carrier strike group, including aircraft and surface ships, ran on biofuels off the coast of Hawaii as part of the Rim of the Pacific Exercise (RIMPAC). The Navy, USDA and the Department of Energy recently announced $30 million in funding for “drop-in” biofuel substitutes for diesel and jet fuel.

“Forever Young” Switchgrass for Cellulosic Ethanol

Scientists at the USDA might have found a way to keep switchgrass forever young and better for cellulosic ethanol. Agricultural Research Service (ARS) geneticist Sarah Hake, working with University of California-Berkeley plant geneticist George Chuck, found that taking a gene from corn called corngrass and inserting it into switchgrass keeps the grass always in a juvenile form that doesn’t flower, doesn’t produce seeds, and doesn’t have a dormant growth phase. And that means the sugars in the plant starch are more readily available for conversion into cellulosic ethanol.

The scientists observed that the leaves in the transgenic switchgrass are not nearly as stiff as leaves in switchgrass cultivars that haven’t been modified. In addition, they determined that leaf lignin is slightly different in the transgenic switchgrass than leaf lignin in other plants. This could lead to new findings on how to break down the sturdy lignin and release sugars for fermentation, a development that will be essential to the commercial production of cellulosic ethanol.

The researchers are now introducing DNA segments called genetic promoters that would “turn on” the expression of the corngrass gene just in aboveground switchgrass shoots. This could help increase root mass development that otherwise would be inhibited by the gene. Hake and Chuck also suggest that developing nonflowering switchgrass varieties would eliminate the possibility of cross-pollination between transgenic switchgrass cultivars and other switchgrass cultivars.

The work was published in 2011 in Proceedings of the National Academy of Sciences.

DF Cast: Debating the RFS Waiver

The EPA has just started the 30-day comment period for a proposed waiver of the Renewable Fuels Standard (RFS). And just as the comments started, the National Corn Growers Association has asked for even more time for comments to come in.

But there’s no lack of viewpoints already out there. In this edition of the Domestic Fuel Cast, we’ll hear from National Turkey Federation president Joel Brandenberger, Purdue University’s Wally Tyner and Chris Hurt, former Secretary of Agriculture Clayton Yeutter, and Growth Energy CEO Tom Buis giving their thoughts about a possible RFS waiver.

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast

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