Archive for December, 2011

County delegates produce new resolutions for 2012

These directives will be presented for approval at MCGA annual meeting

Written by Jonathan Eisenthal

As a grassroots farmer organization, Minnesota Corn Growers Association undertook one of its most vital functions at the recent Pre-resolutions meeting in Morton, where 66 delegates representing 27 local corn grower organizations gathered to craft language to express the direction MCGA will take in the coming year on the issues that impact farmers the most.

Resolutions ranged in topic from mundane details of the tax code, to the cutting edge of research based on the genetic code of corn.

The resolutions accepted by the group will be presented for a vote by all delegates to the MCGA Annual meeting which takes place in mid-January, during MN Ag EXPO. There is a change of venue for EXPO this year. The annual meeting, educational sessions and trade show will take place Monday and Tuesday, January 23 and 24, at the Verizon Wireless Center in Mankato.

A number of resolutions recognize the fact that change is coming to government ethanol programs, both on the national and state levels. Funding programs are sunsetting, and the farmer delegates responded by creating resolutions to encourage the US Congress and Minnesota Legislature to consider reinvesting those funds into other means of supporting alternative energy, or other important means for assuring the prosperity of farmers and rural communities. One resolution called for the federal government to move E85 into the same tax program with alternative fuels based on propane and hydrogen, which both receive a 50 cent per gallon tax credit. With the sunset of Minnesota’s Small Ethanol Producer credit, another MCGA resolution urges the state to consider keeping those funds rural in focus.

Land acquisitions by state and local government units raised concerns among county groups this year. Delegates proposed resolutions that require government to have a management plan that includes dedicated funds whenever it acquires land, and further that fund be provided to offset losses to local tax base when private land is made public. Another resolution proposed that land acquisitions financed by Legacy State Sales Tax funds be limited to no net gain, to assure the government will not become an unwieldy competitor in the land market, which is already seeing major price spikes.

Another resolution focuses on rationalizing the state/federal approach to wetlands by creating wetlands mitigation banking that focuses on agricultural land use, making it easier for farmers to develop sensible plans for using their land while maintaining the net acreage and quality of wetlands in the state.

Looking closely into state tax code, one resolution proposed reinstatement of the state homestead tax credit for farm production land and farm sites. The resolution spotlights the bind this may place some counties in, of having to choose to raise other property taxes or cut services.

Science and research are seen as a fundamental ingredient to continued farmer prosperity, and so a resolution focused on corn genomics. Now that the genome map has been completed, MCGA should advocate for publicly-funded research based on genomics and phenotypic data, to improve the agronomic performance of the corn plant.

In applied science that comes even closer to the farm, a resolution notes the rise of certain technologies that may interfere with global positioning satellite data. Given the growing reliance on GPS data in order to operate machinery and deliver inputs with greater and greater precision, the resolution calls for opposition to such technologies that interfere with GPS.

These and other new resolutions will be voted on, and those approved will be added to the MCGA policy book. Those resolutions of a national character will be brought forward to the National Corn Growers Association policy and priority meeting in January, and receive full consideration by the national delegates in early March at the Commodity Classic agricultural conference and trade show.

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The next chairman of the world’s wealthiest holding company will be a corn & beans farmer?

Howard G. Buffett, the middle son of Warren Buffett, is his father’s first choice to succeed him as chairman of Berkshire Hathaway, perhaps the world’s wealthiest holding company, with billions in its portfolio and NYSE shares running in excess of $100,000 a piece.

Howard Buffett appeared on last week’s episode of the CBS news magazine show Sixty Minutes. His qualifications to run Berkshire Hathaway? Is he a boardroom whiz kid and stock picker extraordinaire like his father? No, as reporter Leslie Stahl explains, “Howie” is a corn and beans farmer who works 1500 acres near Decatur, Illinois, and who spends about $50 million a year (based on a $1 billion outlay from Warren for Howard’s foundation) on philanthropic efforts that focus on world hunger and lately, conservation methods in agriculture.

“He likes not only farming, he likes machines,” said Warren Buffett, describing how his son is different from himself. The segment shows Buffett driving his John Deere tractor, using his John Deere combine “no-hands” on autosteer and digging up a corn plant to examine its root system. Warren goes on to say that he wants Howard to be his successor at Berkshire Hathaway because one of Warren’s main worries is that the next one to run the company could abuse its wealth and make it into a personal kingdom, whereas Howard “would add a layer of protection against that…he knows the values of the business.”

When it comes to values, Warren was very careful in his approach to his family. As children Howard and his brother and sister never knew they were a wealthy family. When Howard was starting out in farming, Warren purchased land for his son for $300,000, but then he required Howard pay him rent, so that he would learn the real business, and appreciate its true worth.

The Sixty Minutes story spends some time explaining Howard Buffett’s charitable work, which focuses on farmer education in the third world. The program shows Howard visiting a couple who farm and raise corn in Honduras and have been improving their operation through participation in his educational program there. On his farm visit, just like a farmer or crop consultant here would do, he digs up a plant to look at the health of the root system, cracks an ear of corn in two, and after a thorough examination pronounces that the couple are doing a good job raising the crop. He insists that participants in his program learn accounting and purchase their own seed, in order to assure that even after their participation in the foundation’s program ends, the farmers will be able to continue to use their knowledge, and be independent, in order to prosper.

To view the Sixty Minutes profile of Howard G. Buffett, go to

http://www.cbsnews.com/video/watch/?id=7391360n

 

Linder Farm Network touts Minnesota state government’s impressive volume of renewable fuel use

Linder Farm Network Radio’s farm editor Linda Brekke recently interviewed
Tim Morse, director of travel management for the state of Minnesota, about the state’s impressive record of increasing use of ethanol and biodiesel. Morse not only serves as director of the state vehicle fleet, but he also directs the Smart Fleet Committee, charged with ensuring the growing Minnesota State Government’s use of renewable fuels to reduce dependence on petroleum—Minnesota has to import 100 percent of the oil-based energy it consumes.

Morse’s interview aired at noon on Thursday in the “Minnesota Corn Growers Association Update” segment, and it will be aired again this weekend.

Morse told the radio listeners: “The state has been moving away from petroleum and toward biofuel since 2005. The smartfleet group was put together with various state agencies including Natural Resources, Pollution Control, MNDoT, the Dept of Commerce and the American Lung Association (of the Upper Midwest). We have measured and tracked the usage of fuel with base year of 2005, when we used a little less than a hundred thousand gallons of fuel. This year we will be approaching a million gallons, so we are very happy about that.”

Brekke asked Morse to describe the State of Minnesota vehicle fleet.

“The state fleet includes about 3,000 vehicles that are capable of using E85 fuel,” said Morse. “We also have a significant portion of the state fleet that uses diesel, and so we are looking at using biodiesel as a biofuel. Our goal is to move away from petroleum and we have focused on both ethanol and biodiesel because they are renewable fuels, they are domestically produced and they are cleaner burning than petroleum fuels.”

Brekke noted, “Actually, Minnesota state fleet is number one in the USA when it comes to the percentage of E85 in use in its flex fuel vehicles.”

Tim replied: “We are very proud of the amount of ethanol fuel that we use in the fleet. I am not aware of any state that uses more ethanol than we do. As I said we are approaching a million gallons, and that is very close to 20 percent of the fuel used by our light duty fleet.”

Linda got a laugh out of Morse when she asked him about how he manages his lawn care at home.

Tim said, laughing: “That’s funny. I do have a John Deere diesel lawn tractor and I use 100 percent biodiesel in it whenever I can get it. We count the American Lung Association (of the Upper Midwest) as a valuable member of our partnership and they have been very helpful in ethanol stations, stations that are providing the E85 fuel. We have been working on getting flexible fuel vehicles into the fleet and they (ALAUM) have been working to make the stations available throughout the state.”

Minnesota Biofuels Association promotes, educates and advocates on behalf of farm-based energy

By Jonathan Eisenthal

It’s a three-pronged strategy to assure the strength and continuing growth of Minnesota’s biggest homegrown energy source, farm-based biofuels.

“We’re looking at promotional media efforts, educational projects for the schools and advocacy projects to fight for good energy policy in Saint Paul—with these three simultaneous approaches we’re aiming to make a positive impact on economic, environmental, educational and public policies regarding renewable, farm-based energy,” said Tim Rudnicki, who became executive director of the newly created Minnesota Biofuels Association on September 1.

At a billion gallons of annual production, employing 18,000 Minnesotans and bringing $6 billion dollars of economic activity each year, ethanol is a dynamic and important industry in Minnesota. And yet, it’s still plagued by public misperceptions and the potential for misinformation in the halls of the legislature is an ongoing risk. So the seven founding ethanol companies came together to create the Minnesota Biofuels Association to help ensure the future of ethanol and other biofuels in our state.

The eight producer members at this time are: Al-Corn Clean Fuel, Claremont; Central Minnesota Ethanol Coop, Little Falls; Chippewa Valley Ethanol Company, Benson; CornPlus, Winnebago; Granite Falls Energy, Granite Falls; Guardian Energy, Janesville; Heartland Corn Products, Winthrop; and Highwater Ethanol, Lamberton.

The organization plans to create new membership categories, to allow other organizations and individuals beyond the ethanol producers themselves to join MBA.

“When it comes to promotion we’re talking about raising awareness through advertising,” said Rudnicki. “We recently launched ads that are appearing in local theaters. The message is that we do have a solution to our energy needs in hand, available right here and right now. We don’t have to wait for some grand magic. We have this fuel now. Our 30-second ad features visual motion and music and a voice over and comes on as a leader before the previews begin. We’re running this in a pilot phase in Minneapolis, where we are expecting 80,000 to 100,000 impressions. Next, we are going to be launching some ad campaigns for radio around the beginning of the year. We are targeting both metro and rural areas, and we anticipate reaching 400,000 listeners a week.”

Rudnicki praised Minnesota Ag in The Classroom, a curriculum program from Minnesota Department of Agriculture, which has long received significant support from Minnesota Corn Growers Association. The Minnesota Bio-Fuels Associationplans to support further development of modules that offer the latest information about ethanol and biodiesel.

At the level of secondary education, it’s important to share with students the broad variety of jobs offered by Minnesota’s renewable energy sector. Rudnicki likes to give the example of a recent University of Minnesota-Morris graduate in biochemistry who is now employed in the research laboratory at an ethanol facility. She is working on cutting edge technology with the potential to increase the efficiency and yield of the ethanol process.

“You’ve got all these different positions on the production side, instrument technicians, maintenance workers, team leaders, microbiologists, controllers in these operations, plant managers, general managers, to mention just a few of the types of jobs ethanol creates,” said Rudnicki. “When people pass by an ethanol plant what do they see? We want to say there’s no need to guess what’s happening in there, we will inform you. Once we get our web site up and running we will be a clearing house, not just for what type of positions are out there, but a whole spectrum of information and resources – for the general public, for policy makers and for industry producers.”

Minnesota Biofuels Association will concentrate its efforts on creating a groundswell around the notion that consumers should have expanded fuel choice options that include E85 as well as E15 and E20.

“The old shorthand about what farmers produce is three Fs—food, fiber, fuel, but I add that four more have become a vital part of what farmers offer us: Freedom From Fossil Fuels,” said Rudnicki. “If people have the choice, why not feel good about what you are putting in your fuel tank. If consumers have the choice of using homegrown, renewable biofuel, or finite fossil fuel, I think most people would choose using more homegrown, renewable motor fuel.People would feel good about what they are doing for the environment by using clean burning fuel and feel good about what they are doing for the economy.”

Rudnicki comes to role of executive director at Minnesota Biofuels Association having spent the last 15 years as an energy and environmental attorney, during which time he focused on using the law and the legislative process to find solutions for clients. His specialty has been working on policy issues to promote homegrown, renewable energy. Rudnicki has served as executive director in previous advocacy, promotional and educational efforts launched by businesses and non-governmental organizations.

“For a long time it’s been my passion and what I have been talking about continually–seeing renewable energy as a solution to our economic, environmental and national security problems,” said Rudnicki. “So when this position at MBA became available, it was a perfect fit.”

Ethanol production capacity over 14 billion gallons

(article published by Reuters news service, By Carey Gillam)

(Reuters) – The U.S. biofuels industry has more than 14 billion gallons in annual production capacity for fuel ethanol, according to new industry and government data, but growth has hit a plateau and experts see steady but slow capacity growth going forward.
A government report issued Tuesday shows fuel ethanol industry maximum sustainable capacity at 193 plants capable of churning out 14.2 billion gallons a year or 929,000 barrels a day. The data, issued as a first-ever report by the Energy Information Administration, is nearly a year old, based on information as of January 1, 2011.
Still, data reported by the industry as of November 16 showed 209 plants producing about 14.2 billion gallons a year, less than the estimated capacity of 14.7 billion gallons.
“You’re essentially in the plateau stage of the ethanol boom,” said Linn Group analyst Jerrod Kitt. “There are a few expansion projects under way … but we’ve essentially boomed out. Now we are just tottering along.”
RFA spokesman Matt Hartwig said that the rate of expansion was slowing as the domestic market neared the saturation level and approached the mandate set by the Renewable Fuels Standard which requires oil companies to use 15 billion gallons of ethanol by 2015.
An uptick in export demand is notable but not enough to drive the double-digit rates of expansion in capacity seen in past years, Hartwig said.
Neill McKinstray, vice president of The Andersons Inc ethanol division, said ethanol supply and demand are in balance and margins are strong.
Domestic demand is expected to slip in early 2012, however, and export demand likewise was seen softening, he said.
The vast majority of the U.S. ethanol refineries use corn as their feedstock. Corn prices have fluctuated sharply this year but have been in decline over the last several months.
A few plants also use barley, milo, sugarcane, beer, potato waste and wood waste. Some plants in Minnesota, Wisconsin and California use cheese whey.
“Corn ethanol is in good shape to meet demand,” said Jim Stark, a spokesman for Green Plains Renewable Energy, the fourth-largest U.S. ethanol producer.
http://www.reuters.com/article/2011/11/29/us-usa-ethanol-production-idUSTRE7AS27P20111129

Our Take:
We lucked out, just in the nick of time. An unforeseen economic reality is making up for bad policy—just as we appear to be losing the blender’s credit, the strength of the world sugar market allows US ethanol producers to sell a small fraction of our production into the European Union, and even Brazil, where sugar is competing directly with its biofuels production.
This export market will provide the space for the continued build out of US ethanol production capacity—until such time that E15, as well as the increasing number of flexible fuel vehicles and fueling sites generate domestic demand for that new fuel production. This is our escape valve from the blend wall created by limiting ethanol to ten percent of gasoline blends.

For those who haven’t followed it, the VEETC blender’s credit financed the build out of ethanol production capacity in advance of the ethanol requirements stipulated in RFSII/EISA 2007. We know what it’s like to have a lot more demand than supply—it happened when a whole raft of states suddenly dumped MTBE and required ethanol to oxygenate their fuel in 2005. Not comfortable for anyone. So, needless to say, it’s a good thing when production capacity is in place to meet growing demand. In addition to all its other benefits, this has allowed ethanol to be very price competitive with gasoline.

Having an export market for the time being will create a place for new production to go, until domestic demand catches up. It also creates breathing room for cellulosic ethanol as it launches its first commercial-scale production plants in the next two years.

But the key fundamental for the biofuels industry to continue working, and to continue growing and replacing more and more of our foreign oil consumption, is the RFSII requirement. Without the floor provided by that legislation, we simply will not see the venture capital come to the marketplace to finance any further ethanol production capacity. Banks need a sure thing, and investors look to the banks’ willingness before they pony up equity.

We need renewable energy to continue growing jobs, to stem the tide of dollars flowing out to foreign oil producers, to enjoy the national and economic security of not being beholden to other countries for something as basic as energy, and we need renewable energy in order to limit greenhouse gas emissions and to reduce the environmental impact of energy production and use. Keeping RFSII in place is fundamental to a positive development in our energy future.

 

Guardian Energy (re)opens Ohio plant

(article by Kris Bevill | Ethanol Producer Magazine)

The 54 MMgy Guardian Lima LLC ethanol plant in Lima, Ohio, celebrated its grand opening on Sept. 15 after being idle for nearly three years following the previous owner’s bankruptcy.

The plant began operating as Greater Ohio Ethanol in 2008, but was idled in November that year after the company was unable to emerge successfully from a Chapter 11 bankruptcy filing. Operational issues at the plant, including a minor fire prior to its shutdown, and adverse financial market conditions were blamed for the plant’s failure. In 2009, Paladin Ethanol Acquisition LLC, a capital investment firm, purchased the facility for just $5.75 million and agreed to invest approximately $34 million to retrofit the facility and make necessary repairs. Last November, Guardian Energy Holdings Inc. acquired a majority stake of the plant. ICM Inc. was responsible for conducting the plant’s retrofit.

“We are proud to bring this facility back into operation, creating jobs and providing a boost to the Lima economy,” Guardian Energy CEO Don Gales said. “Domestic ethanol production is a key component of the nation’s energy strategy and one that begins in hundreds of small towns and cities just like Lima.”

The Renewable Fuels Association applauded Guardian Lima’s grand opening and said it demonstrates the ethanol industry’s ability to continue to create jobs, particularly in rural areas. Approximately 600 applications were submitted for the 33 full-time jobs provided by the Lima plant. Another 120 temporary jobs were created through the retrofit and construction activities at the plant.

Guardian Energy is a joint venture between Minden, Neb.-based KAAPA Ethanol LLC, Claremont, Minn.-based Al-Corn Clean Fuel Cooperative, Winthrop, Minn.-based Heartland Corn Products, Benson, Minn.-based Chippewa Valley Ethanol Co. LLLP, Mason City, Iowa-based Golden Grain Energy LLC and Little Falls, Minn.-based Central Minnesota Ethanol Cooperative. The plants formed Guardian Energy in 2009 in order to purchase and operate a 110 MMgy plant in Janesville, Minn., that was formerly owned by VeraSun Energy Corp. Guardian Energy continues to operate that facility and is also managing the operations at the Lima plant.

Our Take:
The energy industry is the fastest growing and arguably the most important economic sector across the globe.

In direct proportion to our need for low-cost energy, the energy sector has the potential to create very negative impacts on the environment. Changing over from fossil fuels to renewable energy sources like grain ethanol is the only solution.  We can reduce greenhouse gases, prevent the ruin of oceans and preserve our remaining pristine forestlands, while developing a literally endless supply of energy based on sunlight and chlorophyll. And we won’t be shackled to oil producing nations who get to decide how much we should pay for gasoline.

People who want to know how to do ethanol right, how to survive the volatility of the energy marketplace, and how to create market space for farmer-owned energy need to pay attention to Guardian Energy. The dream of those visionary farmers decades ago in Minnesota is in good hands.

 

High crop prices a threat to nature?

(From an article by Josephine Marcotty, Star Tribune Newspaper)

Grain prices are tempting farmers to plow up protected land, even as conservation subsidies shrink.

…Experts say 2012 is likely to be a tipping point for conservation across the Upper Midwest. Some 300,000 acres in Minnesota — one fifth of the land now set aside through the CRP — will be up for grabs as federal contracts come up for renewal.

In the following years, millions more acres in Minnesota, North and South Dakota — critical prairie and wetland habitat for a fourth of the nation’s migratory birds — may also fall to the plow as farmers choose between leaving it to nature or converting it to cash crops. Many predict that nature will be the loser.

These choices loom just as concern about Minnesota’s lakes and rivers is on the rise and the state is embarked on a decades-long plan to improve water quality from Lake Pepin to the Red River.

And yet all the financial incentives for farmers — who control half of Minnesota’s land — are poised to move in the opposite direction.

Our Take:
Farmers make choices every day that help conserve natural resources.

For farmers, not everything is a line item. The value of good land, clean water and fresh air are things they don’t put a price on.

That said, not every acre of farmland is alike. Many of the acres put into Conservation Reserve 15 years ago were parked there to achieve another goal. Many acres were put in CRP to reduce the total volume of crops.  By preventing a surplus of commodities, this allowed farmers to make a modest profit from farming. Yes prairie grasses could be a good use for productive farmland under those conditions. But now, with prices that reflect the world’s increasing need for grain for both food and energy, a good number of those acres will come back into production once the current easements end.

This change doesn’t have to mean a loss for nature. If the government is steadfast about its commitment to fund 32 million acres of conservation reserve lands—that equals about a third of all US corn acres and about ten percent of the nation’s arable land—stronger crop prices will help rationalize the system. Farmers will more exclusively enroll marginal, non-productive, environmentally sensitive land, if the government continues to fund CRP. These are acres where the function of conservation is more properly achieved.

Though the commodity price ticker constantly moves up and down, this decade has seen what looks like a permanent rise in grain prices. We’ve heard gloom and doom before about how farmers will choose profits over conservation, but the reality is that a better valuation of crops in the market means that both the farmers and the government can more easily choose to spend money on conservation.

And farmers will choose to continue to invest in conservation. Among other things that farmers love, they love the land.