There’s no time like the present for the Farm Bill to blossom

 Written by Jonathan Eisenthal

A group of Minnesota farmers visited Washington last week and the luck of perfect timing was with them–the all too brief yearly arrival of the storied cherry blossoms lent their beauty to the avenues of the capital. The group took it as a hopeful sign that the luck of good timing might extend to the quest for a new Farm Bill, which people across the Farm Belt regard as something that will find a better resolution the sooner it comes to fruition.

In the course of two-and-a-half days, the delegation made the rounds and visited with more than a hundred legislators who fill key positions when it comes to setting agriculture policy. Minnesota corn farmers Greg Schwarz, John Mages, Noah Hultgren, Tom Haag and DeVonna Zeug were joined by Elizabeth Tanner, MCGA director of government relations and strategic relationships.

The Minnesota group joined forces with members of the Southwest Council of Agribusiness–farmers and business people from Texas, Oklahoma, Colorado and New Mexico brought together with MCGA by the advocacy firm employed by both groups, Combest-Sell Associates.

“This partnership with Southwest Council of Agribusiness (SWCA) is a great asset,” said John Mages, a farmer in Belgrade (Stearns County) who serves as president of Minnesota Corn Growers Association. “We go in together into senators’ and congress members’ offices and they are impressed when they see us working together, representing so many different groups within agriculture, all of us seeking the same thing–a farm bill that gives us options and protects crop insurance.”

Southwest Council of Agribusiness includes mainstreet ag businesses like farm implement dealers and banks, along with commodity groups for rice, cotton, sorghum, and corn.

“We have a lot more in common–Minnesota farmers and southwest farmers–than people tend to believe,” observed DeVonna Zeug, a farmer in Walnut Grove and past president of MCGA. “Our main goal for the farm bill is to make sure we have one that has options, and one in which crop insurance is safe. We presented a Farm Bill concept to the Super Committee (for Deficit Reduction) last fall that offered a cut of $23 billion over ten years, and now we’re being asked to make even steeper cuts in the budget proposed by Congressman Ryan–$33 billion over ten years. It’s so important for farmers to get in and tell our stories to the legislators, to make the case for what we need.”

Mages noted that for two of the Minnesota group–Tom Haag of Eden Valley and Noah Hultgren of Willmar–this was a first taste of this kind of intense lobbying.

“It was a good experience for them to have,” said Mages. “This is where you can really make your leadership count.”

The group visited key members of agriculture committees in both chambers, as well as transportation, ways and means and others committees central to the farm bill process.

“Some (lawmakers) were bleak, some were more positive about the chances of getting a Farm Bill done this year,” said Zeug. “The Senate will get its version done first and hopefully they will have a good enough bill to go to House. They are thinking it might not come in until lame duck (after the November elections, but before new officials take office). An extension is possible, but no one really wants to do that–we will if we have to.”

The arrival of growing season–a solid winter crop season–makes a timely farm bill even more pressing for the delegation from the southwest.

“Coming from a lenders perspective in Texas, they start planting wheat in September, and decisions need to be made,” Zeug reported. “They need something to go on and if there isn’t a farm bill they get very skeptical and nervous about how the political process will affect their farmers.”

Corn Congress–the annual Washington meeting of National Corn Growers Association in July, is the next time Minnesota farmers will have an in-person opportunity to encourage further development of the Farm Bill.

“It was a very successful week, we covered a lot of ground,” said Mages.

“We strengthened the relationships with these other farm groups, which over the long haul is going to help us keep agriculture strong everywhere in America,” said Zeug.

Grower leaders talk issues with lawmakers during 2012 Day on the Hill

Written by Jonathan Eisenthal

Biofuels and water quality rules. These are two issues dealing the highest impact to farmers and rural communities in Minnesota and so farmers went to the Minnesota State Legislature to attend hearings and speak with lawmakers and ask their support for the farmers’ positions on several key pieces of legislation in these areas.

An MCGA delegation headed up by MCGA President John Mages of Belgrade (Stearns County) attended a hearing on biofuels legislation to support the Ethanol Requirement Extension (HF2741), which extends Minnesota’s ethanol 20% ethanol requirement by 3 years.  Without this change, the requirement will expire, perhaps before federal approval can be gained for E20 as a standard gasoline blend. Rep. Paul Anderson, author of the bill, spoke at the hearing and Mages also offered testimony. Representatives from the biobutanol industry were seeking a change in Anderson’s bill to include the new biofuel, also produced from corn. Mages offered the MCGA position that it would be better to hold off-session hearings with all the stakeholders rather than changing the language of the extension bill right now.

“It was helpful that we had 15 people in the room,” said Elizabeth Tanner, director of advocacy and strategic partnerships for Minnesota Corn Growers Association. If you do have good representation at a hearing it does help your cause.”

The delegation included several staff, three student ‘agvocates’ and a dozen MCGA grower leaders.

“MCGA Day on the Hill went really well,” said Tanner. “It’s about making connections and those connections lead to more connections–this is the way you let your representatives know that you know what’s happening and that you follow what they are doing. Senator (Julie) Rosen bumped into us, and said she really liked seeing our group up there at the capital. She chatted with us, gave us a quick update, and listened to our concerns, and then she went back to the session. She let another senator on the floor know that one of our grower leaders, a constituent of his, was waiting out in the hall, so that senator came right out and talked to us.”

Another important element of Day on the Hill is educating grower leaders about the legislative process and about the work that political advocates are carrying forward on behalf of MCGA.

“We employ full time lobbyists and it’s important for the grower leaders to see how that investment is paying off for the group’s 6,000 farmer members across the state,” said Tanner.

The group also spoke to their home legislators in support of two bills having to do with wetlands, introduced by Senator Gary Dahms: a Wetlands Bill (SF2072) to increase the size of land eligible for the de minimis exemptions for class 1, 2, 6, and 7 wetlands and another bill to exempt farmers from the Wetlands Conservation Act if they are complying with the federal wetlands protection laws known as Swampbuster. (SF2042, Sponsor: Dahms).

Another highlight of the day was an hour long briefing with State Agriculture Commissioner Dave Frederickson. The Minnesota Corn organizations’ board and council had met with Frederickson the day before, but this session proved to be a valuable follow up. The commissioner and the leaders held a lengthy discussion about the Memo of Understanding between the state of Minnesota and the Federal EPA and USDA to launch a pilot conservation program geared to water quality outcomes where Frederickson assured them that “we don’t want to cause economic pain with this program–if there is pain here we want to get rid of it. At the end of the day everybody’s got to earn a living. We just want to identify best management practices” in order to reward those through this program.

Former MCGA president Doug Albin said, “This is a good time for farmers to look at conservation practices. We have money to spend and we are willing to spend it.”

Former NCGA and MCGA President Gerald Tumbleson said, “America was built on one word. Innovation… We are just concerned that whatever program is put in place, we are allowed the room to change and grow. We don’t know what tomorrow’s best management practices will be, and trying new things is the only way to find out.”

MCGA growers join the voices of farm leaders from around America calling for a farm bill this year

Written by Jonathan Eisenthal

Commodity Classic 2012 included the annual resolutions meeting of National Corn Growers Association where the most important and unified message was a call to congress to produce a new farm bill this year and not just an extension of the current farm bill. Record attendance at the farm convention and trade show, held this year in Nashville, was well over 5,000 people.

Minnesota brought the third largest state delegation to the NCGA resolutions meeting, with 15 representatives and four alternates. State organizations are allotted delegate seats according to a calculation based on total number of corn acres in the state, the number of members in the state organization, and the state’s dollar contribution to NCGA.

“We would like to see the Farm Bill get done before the elections this year,” said John Mages, a farmer in Belgrade, Minnesota, who serves as president of MCGA. Mages was a delegate at the NCGA resolutions meeting. He said, “There’s a better chance of getting a good farm bill that provides an adequate safety net if we get it done now, rather than waiting.”

Garry Niemeyer, an Illinois corn producer, and president of National Corn Growers Association, joined leaders of national wheat, soybeans and sorghum groups and released a joint statement representing the views of tens of thousands of American farmers regarding the Farm Bill:

“Commodity Classic provides our organizations an opportunity to come together to discuss important policy issues facing our industry.  As Congress continues work on the next farm bill, our organizations agree that an affordable crop insurance program is our No. 1 priority.  We also stand ready to work with House and Senate Ag Committee leaders to create farm programs that provide risk-management tools to growers when they are facing a loss beyond their control.” 

The four national farm commodity groups–corn, soybeans, wheat and sorghum– represent 70 percent of the farm acreage in the United States. The groups acknowledged the current efforts to reduce the federal budget and pledged to work with Congress to develop a very cost effective program:

The joint statement continued, “We urge Congress to pass a new farm bill this year to provide the level of certainty in America that a short-term extension cannot. The nation is currently facing record high federal deficits and this requires difficult decisions.  We stand ready to do our part to develop more efficient farm policy that will be responsive to taxpayers and effective in helping farms remain viable and productive.”

The NCGA resolutions meeting is a chance for the grassroots membership from across the country to help shape the policy directives for the coming year. Minnesota contributed a resolution regarding water management.

“We brought a resolution in supporting water management through irrigation and tiling,” said Mages. “We want to let the government and elected officials now that these management tools are key to the farmer’s protection of resources, and efficient use of nutrients.”

Minnesota also presented a resolution in favor of expediting the necessary investigations that would lay the groundwork for adoption of higher ethanol blends as accepted, EPA regulated fuels.

“We believe that down the road, as CAFE standards rise and require higher mileage efficiency, auto engineers will find that ethanol can be part of the solution for providing higher octane and higher mileage.”

Growers remember Curt Watson

Written by Jonathan Eisenthal

Curt Watson, 63, passed away Sunday morning at his winter home in Arizona. Watson, who farmed with his wife Janel in Renville, Minnesota, is a past president of Minnesota Corn Growers Association. He was widely known as a passionate advocate for agriculture. His friends knew him as a man of faith and family, who had courage in his convictions and whose good humor and sense of fun leavened the experience of leadership that he offered. He and Janel had five children and many grandchildren.

Lifelong friend Gerald Mulder recalled Curt’s zest for life.

“If you say one thing about Curt he really enjoyed life,” said Mulder, who went to grade school and Sunday school with Watson and graduated Renville High School with him in 1966. “He always said, ‘Let’s go out and have fun!’ That was ever since I’ve known him, he was always that way. Make it fun for everybody. That’s something Curt really lived by. He was a very Christian man. Curt and I went to the same church and we did talk about the Lord’s love and that when we would die, we knew we were going to be with Him.”

Mulder recalled first noticing the Curt had changed from a quiet kid to a man with leadership qualities when they played together on the Renville High School football team.

“Senior year is the year I remember most,” Mulder said. “We had a very good football team, we were 7-1-1. Curt started on the offensive line. Curt was center, I was tackle. That maybe was his first leadership role. He would get the offensive line together–using codes, he’d call out who was blocking who. That’s when he started to come out and be more of a leader. We grew up a lot that year.”

Then the two went into military service. Mulder went into the U.S. Air Force and a little later Watson joined the U.S. Marine Corps–ever after it was a point they teased each other about–who joined the better armed service.

One of Watson’s key leadership skills was recruiting new leaders and empowering them in order to strengthen the organization.

“Mentor is the word I think of when I think of Curt,” said DeVonna Zeug, a Walnut Grover farmer who became an MCGA leader through Watson’s encouragement, and subsequently served as president. Zeug said, “As I was coming up, Curt always made sure he included me because he knew I was coming up. He stayed in contact. He thought mentoring and communication were keys to developing new leadership and running a successful organization. The very first board meeting I went to I sat next to Curt and we became friends, right from the get-go.”

Like many who knew him, Zeug’s chief impressions of Watson were his sense of humor and his commitment to his pro-farmer agenda.

“He was very funny, he had a great sense of humor,” said Zeug. “Yet, he was focused and he knew his stuff. He was definitely an advocate for farm policy. He took the PAC very seriously. He was very passionate about its importance, and he was always trying to come up with different ideas for fundraising. It was great to get to work with him on that.”

Jerry Demmer, a farmer in Clark’s Grove, became friends with Watson when the two filled the top positions in Minnesota’s corn organizations.

“When Curt was president (of MCGA) and I was chairman (of Minnesota Corn Research & Promotion Council), the agreement was to keep each other out of trouble. ‘If either of us get to rattling on too much, just give me an elbow,’ was what we agreed. We had that bond at that time, and talked quite a bit. Curt was a loving father, husband and grandfather–he loved his grandkids. He was a great advocate for corn growers, and their mission. He was opinionated, maybe more so than the average person. He didn’t hold back on asking tough questions that sometimes people didn’t want to hear the answer. If he didn’t get the answer he would go and seek the answers out.”

Demmer noted that when the board and council decided to seek approval from Minnesota’s corn farmers to increase the amount of the checkoff rate, Watson took it upon himself to make calls to farmers to get out the vote for the issue at the MN Ag EXPO that year. Rolling his sleeves up and making personal contact was part of Watson’s effectiveness as a leader.

“Sometimes, instead of asking why, he’d say why not? Why can’t we do this? Board and Council is a team effort, but he wasn’t afraid to be doing the prodding when he felt it was an important issue,” Demmer said.

“Driven is a word that describes Curt,” said Chad Willis, a farmer in Willmar and current chairman of Minnesota Corn Research & Promotion Council. “He was driven to be a leader. Just a couple weeks ago at Commodity Classic, after Corn Congress, Curt was talking to me about a few of the issues, talking over how we presented things and how we could have presented them better. He was always thinking about the best way to do things. He really enjoyed the policy end of the work. And he was very into the stewardship issues. Water quality and different practices–he got to all the meetings and was on top of all the information.”

Willis and John Mages, a farmer in Belgrade who currently serves as MCGA president, are among the many who feel that Watson personally encouraged them in their leadership paths.

“I first met him six years ago when I joined the corn growers board,” Mages said of Watson. “He was the one who encouraged me to be an officer. He was always very knowledgable about the subjects, never afraid to speak up. He also injected humor into the meetings, so there were some lighter moments. He was always fun to be around. He was always thinking about ways to do things better. He was big on getting everyone involved. That included spouses, too–he was never shy about recognizing the support that spouses give that’s so important to leaders being able to fulfill their roles. When we traveled together, Curt felt it was important to get to know everybody, and to get to know spouses as well.”

Steve Kramer, who farmed about 30 miles down the road from Curt, on the opposite end of Renville County, is another talented leader recruited to MCGA by Watson. The two shared a passion for the politics of farming.

“He was an instigator,” said Kramer with a chuckle and more than a hint of admiration. “He was always looking for ways to make things happen. Always thinking of ways to make things better and he wasn’t afraid to push really hard to get them done. He went down alleys and paths other people never would have thought of, to pursue a goal.”

Kramer said two important ingredients in Watson’s leadership were his ceaseless curiosity, which worked well with his willingness to brave public opinion in the face of controversy.

“He never took the safe road. Not all the things he pushed for panned out, but he was always trying stuff, he was always interested in learning things and he was fascinating to talk to,” said Kramer. “I’ve known Curt for 30 years. He is the one who talked me into going on the state board–it took him a long time–he’s persistent, too. He was so interested in politics. He knew he wasn’t always the one to get things done. He knew some people saw him as abrasive. He liked people. He wasn’t afraid to promote ideas, to talk about them and sell them. Usually he had a very thoughtful approach. I got to travel with him a lot and I always enjoyed that. You never sat in silence. There was always a topic to talk about.”

His yen for problem solving suited him perfectly for the farming life, and for the politics he loved, said Mulder.

“Farming…he loved all the challenges. He loved fixing things, not so much with his hands, but with his mind. I talked with him about the fact that he was old enough he should retire, but he said he never would. He loved the business of farming. He was a shrewd business man, but I also think he never intentionally hurt anyone. When I think of what Curt loved about farming, I think he loved those headaches, he loved those very complicated situations. That’s why he liked to be on the corn board because he loved to solve problems.”

Mulder summed up his thoughts in a way echoed by all of these people who knew Watson so well.

“He is a friend that will be truly missed.”

Visitation will be held for Curt Watson at Emden Christian Reform Church in Renville from 5-8 p.m. Friday, and a funeral service takes place there on Saturday, at 10:30 a.m.

Livestock feed is still corn’s biggest customer

(article by Holly Jessen for Ethanol Producers Magazine, “World of Corn report breaks down corn used for ethanol, DDGS”)

The National Corn Growers Association’s annual report reveals statistics about U.S. corn production, including the amount of corn used for ethanol production and the amount of distillers grains that goes back into the feed market.

The 2012 World of Corn shows 5 billion bushels of the current supply of corn is being used for ethanol, and 1.547 billion bushels of that re-enters the feed market. That includes distillers grains and corn gluten for domestic use and a smaller amount of DDGS for export.

Corn displaced by DDGS and corn gluten in domestic livestock rations has grown dramatically from 189 million bushels in 2002, according to figures from ProExporter Network, which was cited as the source in a World of Corn chart. In 2009 the number was 1.1 billion bushels and in 2010 it was 1.2 billion bushels.

Beginning last year, the NCGA has revised the way it presents data on the amount of corn going into ethanol to reflect the amount that leaves the plant as coproducts and re-enters the feed market. Because the USDA does not account for distillers grains and corn gluten feed, it overstates the amount of corn used for ethanol and understates the amount used as livestock feed, NCGA said last year. After the Governors’ Biofuels Coalition requested USDA report corn usage for ethanol more accurately, the agency did add a footnote to its supply and demand estimates report last spring. 

Taking the DDGS production numbers into account, ethanol accounted for 27.3 percent of corn usage in 2011, according to the World of Corn report. The largest usage of corn remained feed and residual, at 36.3 percent. The 5 billion bushels of corn that went into ethanol production is down somewhat from the 5.021 billion bushels for the same use in 2010. Corn exports, on the other hand, dropped from 1.835 billion bushels in 2010 to 1.65 billion bushels in 2011.

Our Take:
Yes, this is a hungry world–it’s hungry for both food and fuel, and luckily, corn can fully supply the demand for both.

When the feed component of ethanol production–distillers grains–is properly accounted for, more than two-thirds of corn crop feeds animals while just over a quarter of the crop disappears in fuel production.

Minnesota’s 21 ethanol plants produce more than a billion gallons of fuel. That requires about 350 million bushels of corn as raw feedstock, but also returns more than a hundred million bushels of distillers grains for use in dairies and cattle herds, and increasingly for poultry and swine across the upper Midwest.

This production of energy and feed by our ethanol industry pumps an estimated $6 billion in economic activity into our state every year, and is a key element to maintaining the affordability of both food and fuel prices. Yes they are rising, but they would be headed up a lot faster without all the ethanol and distillers grains produced in Minnesota.

Ethanol industry lurches in wake of lost subsidy, oversupply

by Mark Steil, Minnesota Public Radio

WORTHINGTON, Minn. — After predicting they would survive the end of a major federal subsidy without problems, it looks like officials at the nation’s ethanol producers may have been too optimistic.

Since the subsidy ended Dec. 31, ethanol profit margins have declined sharply, even slipping into negative territory. Experts see no quick turnaround in sight.

Now that the subsidy has disappeared, the ethanol downturn is being felt nationwide, including in Minnesota. The state’s $2 billion-plus industry ranks fourth in the nation in capacity and production.

At the Al-Corn Clean Fuel ethanol plant in southeast Minnesota, CEO Randall Doyal sees how the loss of the subsidy has hurt this business. He said his profit margin — the difference between the cost of making the corn-based fuel and what he can sell it for — has disappeared.

“Since the first of the year it’s been even-to-slightly negative,” Doyal said.

The loss of the 45-cent-per-gallon federal tax break marks a major change in the economics of ethanol. It also created a double whammy beginning with the closing months of last year, when ethanol producers saw a rush of buyers for the last of a subsidized product.

The charge was lead by the gasoline companies that actually received the subsidy for buying ethanol, Doyal said. As the end of the year approached, the companies stocked up, knowing that every gallon would cost 45 cents more after the first of the year.

The heavy demand prompted the nation’s ethanol industry to produce as much fuel as possible, Doyal said. That’s the other part of the double whammy. Ethanol plants flooded the market with too much ethanol, much more than the nation’s fuel capacity could absorb.

“Excess capacity leads to oversupply, which leads to depressed prices,” Doyal said.

That’s where the ethanol industry finds itself today. U.S. Energy Information Administration numbers show ethanol stocks are up 10 percent over a year ago.

There are two ways to burn though that oversupply. One is through higher consumption. But people drive less during winter, in part because they take fewer vacations. Rising fuel prices and the slow economic recovery also constrain demand for fuel.

With consumption slow, that leaves one other way to bring down the oversupply.

“Generally speaking, if you’re losing money, you cut back on production,” said William Tierney, chief economist for Chicago-based AgResource Company, a consulting business.

Tierney said there are signs that ethanol companies are cutting production. While no Minnesota plant has announced a cut, officials at Archer Daniels Midland say the company will close one of its ethanol plants in North Dakota.

Officials at Nebraska-based Green Plains, say they will cut production by 30 percent at two ethanol plants.

“If you can reduce total industry production by five to seven percent,” Tierney said, “that might, might, be enough to cut production back enough that you can get margins back up again.”

So far the industry hasn’t cut back that much, but ethanol production has fallen about 4 percent from the December peak. Production, however, is still above the level of a year ago.

Despite the unprofitable market right now, many people in the ethanol business are optimistic the industry will recover quickly.

Higher seasonal demand for fuel in summer and spring also will help, said Doug Punke is CEO of Shakopee-based Renewable Products Marketing Group.

Punke said another plus for the ethanol industry is the overseas market. Brazil, a country that produces its own ethanol, but where demand is high, has been a major customer.

“We’re seeing some export demand pick back up, which is necessary for this industry right now to balance out that supply and demand,” he said.

Last year U.S. ethanol companies sold about 8 percent of their production abroad. Just how closely sales can match that figure this year will help determine how quickly the green fuel starts generating some bankable green for the companies that make it.

Our Take:
It’s time for Minnesota to be a leader again. Our two billion dollar-plus ethanol production industry is on the line. The one thing that’s going to keep the oversupply situation from turning into the next washout round, with the Valeros of the world swooping in and buying up our ethanol companies for a dime on the dollar is something Minnesota has control over. Incentivize installation of blender pumps, and at the earliest opportunity mandate E15 fuel.

The naysayers who criticized the tax credit never acknowledged the true role of that credit–it financed the ethanol industry build out in advance of market demand and kept gasoline cheaper than it otherwise would have been. Without the tax credit the ethanol industry’s product is, overnight, about seven percent oversupplied. The RFS (if oil interests don’t manage to scuttle it) will eventually absorb this excess–the nation’s gasoline suppliers will need to blend 15 billion gallons of ethanol a year in 2015. But ethanol companies weren’t able to dodge this eight-ball will need the cash to be flowing now.

From where we stand, seeing the incredible benefit of ethanol production to rural communities and the Minnesota economy as a whole, fighting to keep ethanol ownership local and to keep the industry vital are goals worth fighting for. Through ethanol, strong instate livestock industries and strong exports, farm production provides a strong foundation for the state economy–Minnesota rode out the recession with unemployment figures several points lower than the nation as a whole, and experts agree that Minnesota can thank agriculture for that. Take away ethanol and you’ve got a three-legged stool trying to stand on two legs.

Minnesota citizens and leaders should urge the federal government to expedite the resolution of the remaining issues preventing the broad retail sale of E15–misfueling liability protection for station owners, certification of fueling tanks and equipment for use with E15 and a solid program to cost share installation of flexible fuel pumps.

These measures will be far cheaper than rebuilding after we lose this cornerstone of our economy. It is difficult to imagine a scenario that could attract another industry into Minnesota that can generate the kinds of jobs numbers and economic activity that renewable energy has done. Let’s act before it’s too late.

Planning ahead for the overnight success of E15

(An excerpt from “Retailers Won’t Sell E15 Without Liability Protection” published by Convenience Store News)       

GRAND FORKS, N.D. — Although the Environmental Protection Agency (EPA) recently approved the required health effects and emissions testing of ethanol/gasoline blend E15, a number of barriers still must be overcome before petroleum retailers will sell the fuel for vehicles made 2001 and later, Ethanol Producer Magazine reported….

“Retailers must obtain the appropriate storage tanks and dispensers to sell the product, and this can be a very expensive investment,” said Jeff Lenard, vice president of industry advocacy for NACS. “In order to justify such an investment, a certain level of consumer demand must exist. Given the opposition of the auto manufacturing industry to E15 and their concerns about the use of the fuel in current vehicles, it is very difficult to evaluate potential consumer demand.”

Lenard added that the organization is pursuing legislation to legally protect retailers who comply with an EPA-approved program in the event of a driver adding E15 to a non-approved vehicle.

Iowa may become the first state to permit E15 sales to 2001 and newer vehicles, due to E15’s existing presence in blender pumps for flex-fuel vehicles. The state also has a renewable fuel standard in place, and incentives are available to retailers who sell mid-level ethanol blends.

“We have been looking at state policies and have modified the necessary policies and requirements to be in a position to offer E15 fairly soon after it goes through the formal approval process and all of the registration and other requirements have been met,” said Lucy Norton, managing director of the Iowa Renewable Fuels Association. “We have moved forward very quickly to put the pieces together here to enable retailers to put E15 in this market so consumers have additional fuel choices.”

Earlier this month, the Iowa Renewable Fuels Association submitted a mitigation plan to the EPA that could serve as a model plan for retailers to follow to demonstrate regulatory compliance in the future, according to the report. However, CHS Inc., parent company to the Cenex brand of convenience stores, is just one fuel supplier that has refused to sell E15 until concerns about liability issues for vehicles and equipment, potential gasoline compatibility issues related to Reid Vapor Pressure levels, state and local fuel regulations are resolved.

Valero Energy Corp. also has no plans to offer E15 for sale. “Because E15 has not been approved for use in all engines and hasn’t received warranty protection from engine manufacturers, we can’t guarantee its performance and we won’t sell a product we can’t guarantee,” said Bill Day, executive director of media relations for Valero.

Our Take:
Big oil won’t sell higher blends of ethanol. The auto manufacturers won’t warrantee vehicles running on E15. Convenience stores want liability protection. Sounds like a recipe for status quo.

If America wants to end its oil addiction on its own terms (instead of waiting until $5 gas shuts down the economy), then the government needs to stop dithering, and the EPA needs to stop spinning its fantasy of an all-electric car future–and get busy with the solution that’s available now and is the most economical solution around.

If ethanol opponents thought 50 cents a gallon incentive for ethanol was a boondoggle (and look at Ethanol carrying on, despite the disappearance of that incentive) wait until they see how much of an incentive they’d have to give car owners to buy battery-electrics–$10,000 per. And then there’s building 50 new nuclear power plants or coal-fired power plants (what happens to carbon emissions then?) to keep up with the new electricity demand.

By comparison, the ethanol solution is economical and ready to go. Increasing ethanol production and adopting the technology (a hundred dollar part in a car’s fuel system), and the infrastructure (a blender pump in every station) and the legal framework (liability protection) will cost a lot less than the battery-powered electric scenario. And did we mention ten to 20 hours to recharge the car so it can go 50 or 100 miles?

Iowa is forging ahead and we applaud their leadership on the issue. Minnesota should pay close attention and help carry this ball into the end zone.

High Oil corn variety nearly ready for commercial development

Written by Jonathan Eisenthal

University of Minnesota scientists, with funding from Minnesota Corn Research & Promotion Council, are developing a high-oil line which should become available later this year for license to agribusinesses interested in developing high oil corn hybrids for the commercial market.

In conjunction with this project, university scientists are developing an optimized system for dry-milling this high oil corn in order to derive both biodiesel from the oil content and ethanol from the starch. A university economist is developing various models to predict methods for producing biodiesel from this corn that would be profitable.

The line, dubbed AHO-1, features a 20 percent oil content, compared to 4-5 percent oil content in typical commercial varieties grown in Minnesota. The germplasm will be ready for release in December. AHO-1 is being developed by Drs. Ron Phillips and Rex Bernardo, a corn geneticist and a corn breeder at the University of Minnesota. Regents Professor Phillips received an original stock of kernels from open-pollinated corn grown in North Korea–a gift from a South Korean agronomist who discovered the special corn when she was involved with development work in North Korea. Phillips began developing an inbred line so that Minnesota producers could use it and obtain consistent results of high oil content. Bernardo continued the work after Phillips retired in 2010. 

AHO-1 features a larger embryo and a smaller endosperm than typical corn varieties produced in the US, which means that it contains more oil and a bit less starch than those typical varieties.

“In the crossing work we’ve done we wanted to capture some of the agronomic qualities of the non high-oil varieties,” said Bernardo. “Anticipated oil content drops to around 12 percent when AHO-1 is crossed with regular corn lines–it seems there will always be a tradeoff between oil and starch. The plant can only produce so much energy. You cannot expect to increase the one aspect without affecting the other.”

The research involved a full investigation into the genetics of this unique high oil germplasm from Korea. They found that many genes control the trait, as compared to BT Corn or RoundUp(TM) Corn varieties, where a single gene offers the desired trait.

“We’ve done some yield trials in four locations in Minnesota and we found that when we crossed the Korean high oil corn with regular US corn lines, that the high-oil varieties have a 30 percent yield drag compared with the best commercial hybrids. However the oil yield is about twice as much,” said Bernardo.

In trials in Saint Paul, Rosemount, Waseca and Lamberton, they produced an average yield of 183 bushels with commercial corn varieties while the high oil hybrid produced 126 bushels per acre. However, the oil yield of 847 pounds per acre is more than double the oil found in three commercial varieties grown in the trials (410 pound per acre).

Prof. Roger Ruan, of the U of M bioproducts and biosystems engineering department, is developing the special milling technique that separates the components and then utilizes a catalyst like hexane to render the oil and starch needed to produce biofuels. Assistant Prof. Doug Tiffany, department of Applied Economics, is studying how to develop a profitable production and marketing scenario for high oil corn.

Comment period opens for Mississippi and Minnesota River TMDL reports

Draft reports have been submitted by the Minnesota Pollution Control Agency and as of Monday, Feb. 27, the MPCA started accepting comments regarding the documents. The comment period lasts until April 27.

“Farmers have been involved in the process from the start and it’s important to remain engaged,” said John Mages, a farmer in Belgrade, Minnesota, and president of Minnesota Corn Growers Association. “It’s important that we remain at the table, remain part of the conversation. We think many citizens will have views and information to contribute and they should take advantage of the comment period to assure that their voices are heard.”

The two reports can be viewed at the Minnesota Pollution Control web site.

The draft of the South Metro Mississippi TMDL study (focusing on points from Lock No. 1 and downstream, through the Lake Pepin region) can be downloaded at http://www.pca.state.mn.us/index.php/view-document.html?gid=15794

The draft of the Minnesota River TMDL study can be viewed at 
http://www.pca.state.mn.us/index.php/view-document.html?gid=17108

Among the most important findings in the assessment of the source of turbidity or cloudiness in the waters of these two river systems is the increasing information about streambank erosion and the role it plays in putting both sediment and nutrients into the water.

The draft South Metro Mississippi TMDL study states: “The watershed to the South Metro Mississippi encompasses half the state of Minnesota and part of northwest and west- central Wisconsin. Within Minnesota, it includes 33 major (8-digit HUC) watersheds contributing suspended solids to the Mississippi. The MPCA and local partners are conducting turbidity TMDLs upstream on the Minnesota River and its tributaries, which contribute an average 74 percent of the TSS load to the South Metro Mississippi. The MPCA funded three major research projects to determine which areas and landscape features within the Minnesota River Basin are contributing the most sediment. Early results point to a steady shift from farm field- to non-field sources of sediment since the 1940s, with important implications for implementation planning.”

Minnesota growers headed south for Commodity Classic

Written by Jonathan Eisenthal

A full delegation of Minnesota corn grower leaders headed south to Nashville this week for the 2012 Commodity Classic–the annual convention and trade show of National Corn Growers Association and a number of other farm groups.

Belgrade, MN farmer John Mages leads a delegation of a score of farmers who will participate in the annual NCGA resolutions meeting.

“We’re looking forward to seeing the leaders from other states and exchanging views about Farm Bill and the other issues at the top of the agenda,” said Mages. “But Commodity Classic is also a great farm show, and our families are coming down.”

The three-day convention officially opened Thursday, but growers headed down Tuesday to get to pre-convention meetings.

“This will be my fifth year going to Commodity Classic,” said Mages. “We go through the national resolutions, and we bring forward our resolutions from the grassroots membership here in Minnesota. We’ll have things on water quality, on the farm bill, child labor–things that impact our farmers.”

Proposed changes in child labor laws may make it difficult or impossible for children to fulfill traditional roles on the farm.

“We think having children helping out on the farm has always been beneficial,” said Mages. “This has been the way to teach kids not only about how to farm, but also to help them develop the right priorities and a good work ethic.”

The resolutions around the farm bill will likely encourage congress to pass a farm bill this year or as soon as possible. Though the commodity farm program was alone among federal budget areas in producing a savings — $18 billion over the past five years–it’s likely that the farm program will be asked to give up more. A Farm Bill presented to the “Super Committee” last fall offers $23 billion in savings over the next ten years and yet maintains the necessary safety net, Mages said. The “Super Committee” was a bipartisan congressional task force mandated to find more than a trillion dollars in cuts to the federal budget.

A number of recently elected board members will take part in Commodity Classic, according to Mages.

“It’s a good opportunity for Minnesota leaders, especially those new to the board, to see how the resolutions process works and to meet the candidates for the national board,” said Mages. “These are the folks we then vote on at Corn Congress–the national meeting in Washington in July.”