Archive for June, 2012

Telling the Farming Story

Written by Jonathan Eisenthal

For their first duty as Minnesota Corn Growers Association “Agvocates,” Michaela Bengtson, Nick Peterson and Kevin Welter found themselves at a pig farm and at a tannery–they were with 40 other young people for the annual Minnesota Agriculture Ambassadors Institute, held this year in Red Wing, enjoying field trips to area farms and other points of interest.

“It was so much fun,” said Michaela Bengtson, 20, who will be a junior at the U of M this fall. “The wonderful thing about the Ambassador Institute is that I come to it with my dairy background and then I get to meet so many people from different agricultural backgrounds. We toured the Shafer Farms, which is an amazing pork operation, and then we toured the tannery for Red Wing shoes–there are so many facets, not only in farm production, but in all the ways our products get processed into things people need and use every day.”

Kevin Welter, 19, became interested in working as an MCGA Agvocate when he heard a 2011 Agvocate, Greg Tusa, talking about it. He learned from Greg one of the main responsibilities for Agvocates is reaching out to the general public with positive messages about farming, using social media.

“I have both Twitter and Facebook experience, and I’m looking forward to using these to help promote agriculture,” said Welter. “At the Ambassador Institute and with other experiences MCGA provides for us three Agvocates, we’ll have reliable information to share with the consumers. Another key piece of the story is knowing that agriculture is all related–as we meet people involved in all these different areas like pork or dairy or corn, we learn that we can all work together to accomplish our goals and that makes the voice for agriculture stronger.”

Welter grew up on a hog and crop farm in Stewartville. His parents have been active in corn and pork organizations and were recognized by U of M Extension as farm family of the year in Olmsted County for 2008. Welter is impressed by the range of activities MCGA supports, including a personal favorite, the SuperMileage Challenge.

“I participated in the SuperMileage Challenge when I was in high school–I was on Stewartville’s team the first few years they participated, starting in 2009,” said Welter.  “I’m looking forward to working with corn growers when they help out with SMC, and I’m also looking forward to being at FarmFest with MCGA–I’ve been there every year for the past four years.”

Welter will be a sophomore this fall at South Dakota State University, Brookings. His area of study is ag business with an accounting minor, with an eye to becoming a banker at an agricultural lending institution. Bengtson is an agricultural education major and will be a junior this fall at U of M. She hopes to teach high school agriculture classes. Nick Peterson, 20, will also be a junior at the U of M, and majors in applied plant science with a minor in soil science.

Peterson is spending the summer as an intern for Winfield Solutions in Alexandria.  The firm is a branch of Land O’Lakes, and provides seed and crop protection products, as well as technical expertise, through affiliated coops. Peterson’s experience there will dovetail nicely with being an Agvocate. His main responsibility will be helping organize events and communicate with attendees at the Land O’Lakes ‘Answer Plot’ locations near Alexandria. The Answer Plot program collects data on agricultural products and practices at a wide variety of plots across the Midwest.

Peterson found the Ambassadors Institute keynote speaker, a representative of the Minnesota Pork Board, to be very informative.

“He told us that the best way to interact with consumers is to connect with them on values,” said Peterson, who grew up on a crop farm near Clear Lake. “When talking about farming, for instance, we can talk about how it’s a family business, and people connect to that idea immediately in a positive way.”


Yes, there is life after tax incentives, ethanol industry leaders say

Written by Jonathan Eisenthal

To paraphrase Mark Twain, rumors of the death of the ethanol industry have been greatly exaggerated. Following the lapse of the 45 cent per gallon federal blender’s credit at the end of 2011, some financial analysts seemed ready to pronounce time of death, but after two quarters standing on its own, the farm-based energy’s vital signs indicate a long life ahead.

So say a group representing four leading ethanol producers who gathered for a panel discussion about the affect of the end of the Volumetric Ethanol Excise Tax Credit, or VEETC (often pronounced Vee-tech).

The panel held its conversation at the beginning of June as part of BBI’s International Fuel Ethanol Workshop, in Minneapolis.

The panel were: Mark Marquis, president and GM of Marquis Energy; Ray Defenbaugh, president and CEO of Big River Resources; Randy Doyal, CEO of Al-Corn Clean Fuels and Walt Wendland, president and CEO of Golden Grain Energy; with Tom Bryan, vice president of BBI International, offering questions to the group.

“It’s a scary time,” Doyal freely admitted, saying that the end of VEETC had no real direct impact on the profitability of his ethanol company, but it signaled very graphically the change in the level of support among lawmakers for grain ethanol production. “This is something for folks to take back home from this conference. We need everyone to get back to contacting their legislators and reminding them what ethanol has accomplished and why it continues to be so important.”

VEETC, which paid the blenders (read oil companies) to use ethanol, was a tool that ensured the movement of product and ultimately helped the ethanol industry grow itself.

“The impact of losing VTEEC hasn’t been as great as the (delay) of E15 to get to the market–they took our incentive away before they gave us the opportunity to grow our market and that’s what is really hurting us,” said Wendland.

In some ways the tax credit became a political liability whose negatives outweighed the economic benefits, because it gave ethanol opponents ammunition for charges that the industry only exists through public support and doesn’t have economic value independent of that support–something all four leaders say this period after the end of VTEEC is proving to be false.

The FEW conference opened with a video message from Sen. Amy Klobuchar who praised the leadership of the ethanol industry, saying that if ethanol can stand on its own, that shows that a mature industry like oil, which realized a trillion dollars in profits in the past decade, can give up government support, and so can many other industries.

“We were a proponent of VEETC going away from early on,” said Marquis. “Our concern was the damage to ethanol’s image.”

One of the practical effects of the way VEETC ended is that ethanol’s main customer–the oil industry–bought up as much ethanol as possible before the credit ran out, to take advantage of the extra revenue for them.

“We had a great fourth quarter (in 2011), but in the first quarter of this year it was a bit of a hangover,” said Marquis. “Since the oil companies bought ahead, there was a glut in the market, and to make things worse, exports haven’t been as vibrant during the first two quarters as they had over the past two years. The financial industry was saying that since VEETC was going away they believed we were in trouble, and they took those two factors to say it looked like we fell off a cliff, but the reality is not that way.”

He noted that indications of a huge corn crop this year are something of a “golden lining” that may bring a much needed boost to margins. Since 2008 some two score of ethanol plants became “distressed properties” that were scooped up by better capitalized businesses. Marquis asserted that benchmarking and the new focus on margins are what keep him in business.

“If we can stay in the top half of the industry, by these benchmarks, we’re going to make it–that’s our theory,” said Marquis. Various experts said in this time period the difference between companies with favorable benchmark metrics versus laggards is 4-plus percent profitability versus losses around three percent.

Big River Resources’s first plant came on line in 2009, and the farmer-owned company has put in writing its intent never to sell the company. The Illinois-based company has grown to four plants in three states and produces 400 million gallons of ethanol each year.

Big River’s Defenbaugh told the audience: “I tell my children, never sell your (farm)land and never sell your ethanol stock. Ethanol stock is what allows you to keep your land. We are the greatest food producing country in the world. We have seen countries where poor government policy has destroyed great food producing capacity. …we can’t allow that to happen here.”

Defenbaugh asserted that politically, the most important item on the agenda is protection of the Renewable Fuels Standard. RFS is the key to ensure farmer prosperity and guarantee the strength of our food production–that’s how fundamental ethanol production is to the health of the farm economy.


Testimony to Congress: Oil Dependence Threatens Our Security


(On 6-19-12, Truman National Security Project Vice-President Mike Breen delivered the following testimony to the House Energy & Commerce Committee’s Subcommittee on Oversight and Investigations.)

Chairman Stearns, Ranking Member DeGette, members of the committee, ladies and gentlemen, I am honored to appear before you today to discuss the critical national security importance of clean energy development.

I am the Vice President of the Truman National Security Project, a former Army officer and an Iraq & Afghanistan combat veteran. I am also proud to be one of the leaders of Operation Free, a non-partisan coalition of veterans who believe that our dependence on fossil fuel poses a clear national security threat to the United States.

These men and women have walked the burning oil fields of Iraq and patrolled the mountain roads of Afghanistan – where the fully-burdened cost of fuel is $30 a gallon[i], and 1 in 24 fuel convoys ends in an American casualty.[ii] It is an established consensus in the defense community that our dependence on oil threatens our national security.

America sends over $1 billion per day overseas for oil. [iii] It should not be a surprise, then, that oil is the single largest contributor to our foreign debt, outpacing even our trade deficit with China. Worse, far too many of those dollars wind up in the hands of regimes that wish us harm.

According to the CIA, over 50% of Iran’s entire budget comes from the oil sector.[iv] For every $5 rise in the price of a barrel of crude oil, Iran receives an additional $7.9 billion annually.[v] That’s billions of dollars to build new nuclear facilities, replace centrifuges and support terrorist groups that threaten Americans and target our Israeli allies.

There is another consensus emerging in the defense community: climate change poses a serious threat to our national security.

I know not everyone in this room believes that climate change is real, but our country’s national security professionals do. The Pentagon’s Quadrennial Defense Review, the military’s most important strategic document, states that climate change is “an accelerant of instability and conflict” and that climate change and reliance on fossil fuels are “prominent military vulnerabilities” for the nation.[vi]

The CIA has established a Center on Climate Change and National Security. The Council on Foreign Relations, the Center for Strategic and International Studies, the Center for a New American Security, the CNA Military Advisory Board, the National Research Council and numerous other non-partisan organizations have all found, independently of one another, that climate change poses a serious and growing threat to our national security.

According to a recent study, over 97% of climate scientists say that man-made climate change is a reality.[vii] I’m not a climate scientist—I’m a former front-line combat leader in the US military. And as a combat leader, if 97% of my intelligence indicated that I was about to face a lethal danger that would risk the lives of my paratroopers, I would be committing unconscionable malpractice if I did not listen and act.

We see leaders acting in the same vein today in Kern County, California. Located in the high desert, Kern supplied the crude that fueled much of the mid-20th century oil boom. Kern County has always been proud to provide American energy. That’s why in the 21st century, Kern has turned to renewable sources, becoming the largest producer of wind and solar energy in California. Clean technologies are creating jobs in a place where unemployment had been 64% higher than the national average.

Two months ago, in this very building, I stood with Jeff Duff, the CEO of Air-Streams Renewables, a technical school in Kern County that trains wind turbine technicians. Air-Streams is proud that 70% of its graduates are veterans. One of Jeff’s students, a naval electrician, struggled to find work after leaving the service. He left a night job at a mortuary to join Air-Streams and graduated at the top of his class. Now, he’s serving his community by building the energy economy of the future.

As we debate clean technologies, we often ignore energy’s impact on our national security. There will be a lot of emphasis in this room today on cost. But the price of fossil fuels includes more than searching, extracting and shipping. There are security costs that we must recognize. Fossil fuels fund extremists, and breed dependency on nations that don’t share our values. We can let stories like Kern County’s be what they are today: promising, but not commonplace. Or instead, we can lead, by investing in 21st century technologies that keep America safe and prosperous.

Our Take:
QED — that is, this is solid proof — of our need to wean ourselves from fossil fuels. Biofuels and other homegrown energy represent the pathway to our energy independent future. We need to honor Breen and all those who have served and will serve by eliminating the need to protect the global flow of fossil fuels at such a high price in American lives.

We would add America’s Corn Belt to the list with Kern County–these locations and their visionary leaders are the source for America’s renewable energy future.

The unconventional (oil) non-solution

First, we know that tight oil production, like that in the Bakken Formation of North Dakota, is a treadmill. The constant drumbeat of highly-placed editorials about incipient U.S. energy independence is strictly political fodder, with no sound basis in data. Yes, in theory, it’s possible that we could double the output from the Canadian tar sands and the deepwater Gulf of Mexico, quintuple the number of wells that have been sunk in the Bakken so far, and pull off some biofuel miracles. But local resistance to that drilling program will be fierce in some areas, and its cost will eventually prove prohibitive. And it won’t end there; to maintain that level of output, we’ll have to keep drilling like hell, with increasing risks to the environment and public tranquility.

In reality, despite the technological achievements that have enabled production from these difficult resources, the world is losing the race against the depletion of mature conventional oil fields. And the pace of that depletion is accelerating: it’s now an estimated 5 to 6 percent per year for OPEC, and 8 to 9 percent for non-OPEC. Unconventional oil cannot compensate for a drag of that magnitude for very long…

Our Take:
The drum beat for energy independence is real, and it’s important–self reliance in key areas like energy and food production keep America’s economy strong and her borders secure.

That said, we agree with “Peak Oil” author Chris Nelder that fracking alone can’t deliver energy independence as some folks who want to dismantle RFS argue.

We also don’t see the outcome as a “biofuels miracle.” Steadfast adherence to RFSII and further support for alternative fuels will lead to amazing advances in farm-based energy. Steel is going in the ground at this very moment–the construction of the first half-dozen cellulose-based ethanol plants across the country, we learned at the recent Fuel Ethanol Workshop in Minneapolis.

To keep the powerhouse ethanol industry going strong, and maintain the strength in commodities markets that results from it, RFS should not only be maintained, but growth in both grain-based and bio-based fuels should be indexed to growth of yield the corn and other crops demonstrate year-in and year-out. Because ethanol production also yields high quality animal feed, and because the ethanol industry is so important to the strength of crop production, the growth of grain ethanol is essential to growing the capacity to feed the world. We won’t see 300 bushel per acre corn without a strong and growing grain ethanol industry.

Imagine a future gallon of fuel with no fossil component–only ethanol, isobutanol, or other bio-based energy sources. It’s going to happen, and it’s no miracle. It’s the hard work and determination of farmers and ethanol makers that’s going to make this a reality.

This can be done while preserving environment–strong commodity prices and rural energy production generates some of the wealth that allows the set-aside of marginal and sensitive lands for the “environmental and wildlife habitat services” they provide.

Comprehensive feed system maximizes hog production, and manages environmental effects

Written by Jonathan Eisenthal

Pig production is important in Minnesota. So are clean air, water and soil.

Shoreview, Minnesota-based Land O’Lakes Purina Feed has come up with a unique package of products it calls EcoCare® Feed, meant to comprehensively optimize the production of pork while helping to improve the environmental performance of pig farms, according to Mariela Lachmann, a swine nutrition specialist at the company. Among other issues, the feed offers nutrients and technologies that address concerns like air emissions, nitrogen and phosphorous content in manure.

“We want to put all the tools, all the best management practices into a single program, so that we are environmentally sustainable,” said Lachmann who noted that an important element of sustainability is farmer success [or profit potential].

Lachmann, who did her undergraduate and master training in animal nutrition in her native Venezuela, noted that the program required students to learn all about agronomy, so that they understood the crops that became the animals’ food. She went on to earn her Ph.D. at Oklahoma State University, and brought with her the sense of how all the elements of agriculture have to work in concert, in order to achieve success.

She said, “There’s a lot of research in this area. One focus is emissions. You can have a big impact on ammonia emissions, and you can cut dust emissions by manipulation of the diet. It’s a management plan that creates a full circle. With those things in place, we will have a better chance to encourage growth of the industry in Minnesota.”

With a gross income of $2.6 billion dollars, Minnesota hog producers ranked second only to Iowa in economic impact. Producers marketed 17,152,000 head last year, and they were second nationally in pounds marketed—more than 3.8 billion pounds (USDA-NASS, Minnesota field office). And this industry constitutes a major market for Minnesota produced crops, particularly corn and soybeans. Approximately 16 percent of corn produced in Minnesota went to animal production within the state (MDA).

Some of the elements of EcoCare® Feed include the use of phytase enzyme to make the phosphorous in grains and oil seeds more available to the pig digestive tract. With less inorganic phosphorous needed as a feed additive, less phosphorous passes through the animal and into the manure. Phosphorous can be a limiting nutrient when it comes to spreading manure—phosphorous runoff can create unwanted algae growth in lakes—so the proper balance of nutrients may help the pig producer optimize their profit potential from the sale of manure. Another element in EcoCare® Feed is the use of amino acids that helps reduce ammonia emission from manure, which can improve the air quality in the vicinity of the pig production facility.

By themselves these ingredients are in use throughout the industry, but the comprehensive design of the feed program, with an eye to environmental impact is a new marketing concept.

“I consider this an industry-leading approach and depending on the nutrition technology they are using, it is promising,” said Prof. Jerry Shurson, a swine nutrition expert at the University of Minnesota.

Land O’Lakes Purina Feed’s internal research showed reductions of ammonia volatilization of 18 percent in manure during a 45-day trial from EcoCare® fed pig compared to a control group fed with a conventional ration. Other studies at Oklahoma State University indicated a potential to drop ammonia emissions up to 40 percent over the entire finishing period (J. Anim. Sci. 2009. 87 (E-Suppl.):51). They estimate over time, EcoCare® Feed could be an important player to enhance air quality in commercial situations, through the use of crystalline amino acids and complementary manure technologies.

“Manure storage, manure nutrient concentration and air quality—all these things can be influenced by the nutrition program,” said Lachmann. “Through what you feed to the pigs, you can influence emissions, excretions, even viscosity. The key is that it has to be economical for producers. Not only do we need to avoid producing more waste, but we have to offer something that is going to work for the business of producers, to help producers be more environmentally responsible and better received in the community around them. We need to understand in today’s market that manure is not a waste—it is part of a ‘savings account’ for the pork producer. Since the producer plans to offer it for use with a crop producer’s fertilizer program, we can gear the diet to produce manure with the nutrients to match crop requirements.”

EcoCare® Feed has been on the market since 2006, and initial customer feedback lead them to believe that this environmentally friendly feeding program will lead an important market segment in a direction that helps industry respond to consumer and regulatory demands as they continue to develop.


Is corn still “king” in the world of biofuels?

Written by Jonathan Eisenthal

A panel of experts at the Fuel Ethanol Workshop, reviewing all that is happening with cellulose ethanol, advanced biofuels and advances in the production of grain-based ethanol agreed that corn will remain “king” when it comes to ethanol production in America.

“The process of making corn into ethanol created this party,” said John Caupert, who said that in spite of his role as director of the National Corn-To-Ethanol Research Center in Edwardsville, Illinois, he felt that this judgment is sound and unbiased. He said. “Corn ethanol will always be three legs of the four-legged stool–it sets the pathway for growth of cellulose and other advanced fuels.”

The experts noted that the 15 billion gallon per year requirement for biofuels set by the Renewable Fuels Standard II is an artificial one that may be unique in all the world of manufactured goods and products. The panel took place at the 2012 Fuel Ethanol Workshop at the Minneapolis Convention Center in the beginning of June, organized by BBI International, a biofuels analysis firm and publisher of Ethanol Producers Magazine. Minnesota Corn Growers Association is a major supporter of the event.

The panel highlighted ethanol’s benefits and some of its unique challenges.

“What other product has a strict limit to how much can be produced?” asked Pete Moss, marketing vice president of Cereal Process Technologies. “As we produce more and more corn and yet the limit of 15 billion gallons remain, the price of corn will fall and that’s a problem.”

Of course, the RFS standard is not a limit, but in effect it can act as one in the other way that ethanol is unique–it has a single customer, and that customer’s main business concern is producing a competing product. That is, oil companies–when they use ethanol they use less of their own product, gasoline.

“Another problem comes with attempts to go beyond corn, and to use xyz crop as a feedstock,” said Moss. “It’s not just an economic question, but a regulatory. The producers of this new version of ethanol would have to go through the EPA process to approve the use of the new feedstock.”

In contrast, corn for ethanol is a very efficient, well-proved process, according to Rich Chmielewski, Biofuels Marketing Manager for Siemens Industry, Inc.

While the political question of increasing the floor for grain ethanol use becomes a matter for debate, ethanol plants can pursue another option to keep growing. Co-products like corn oil and de-oiled protein feed products will become the norm at dry grind ethanol plants in the future he predicted.

“Diversification of corn ethanol facilities–colocating biorefineries–that will be a pathway to profitability,” said Chmielewski.

Caupert said one of the co-products that ethanol plants will benefit from, once the technology matures, is cellulose ethanol.

“The corn kernel fiber is ‘the forgotten’ source of cellulose for ethanol, already travelling to the 200-plus plants producing biofuels in the US,” said Caupert.


#farmbillnow: NCGA launches Twitter campaign to speed a successful conclusion to 2012 Farm Bill debates

Written by Jonathan Eisenthal

Farmers rose up this spring and used Twitter to thwart bad government policy.

By sending the short text messages via the Internet-based service Twitter, farmers conveyed their displeasure with proposed farm child labor rules they felt would mean an end to time honored participation of young children in farm chores and adolescents in the operation of basic farm machinery. The ability of children to participate this way is a staple of farm life. The government responded to the barrage of messages by withdrawing the proposal. It was a spontaneous, grassroots reaction.

National Corn Growers Association, known for its culture of engaging grassroots political activism, launched a campaign recently on Twitter, asking farmers to “tweet” — as Twitter messages are referred to — in favor of passing the Farm Bill offered in the Senate.

“We need a farm bill now, not in the fall, not by the end of December, but now–farmers will begin shortly to make critical decisions for the next crop year, and not having a farm bill in place leaves too much uncertainty,” said Janice Walters, communications manager for NCGA’s Washington, DC office. She goes by the Twitter username @DCcorngal and she encourages anyone interested in the farm bill to follow her in order to get the latest news. She said, “Even an extension leaves too much uncertainty while it funds programs that aren’t working well for us, like direct payments.”

American Farm Bureau, American Soybean Association and National Wheat Growers Association have joined NCGA in this Twitter campaign.

By including the 12 characters #farmbillnow in the 140 character message, the “tweet” is channeled to any Twitter user who searches using this set of characters, known as a hashtag. Within hours of the announcement of the campaign, farmers were sending messages with this hashtag, and Senators had begun incorporating it in their “tweets” on the Farm Bill, said Walters.

She said Twitter can be an effective tool for lobbying Congress because over 460 of the 535 members of Congress now have Twitter accounts.

Walters quoted Chuck Grassley, who has been in the forefront in adopting Twitter as a means to communicate quickly with his constituents. He was quoted in Agri-Pulse, saying: “I use Twitter to keep in touch with Iowans. It’s a way to describe what I’m working on as their U.S. senator, to make a point in a public policy debate and to try to foster greater citizen participation in the process of representative government.”

The #farmbillnow outreach effort encourages farmers to include in their message that farming is an economic powerhouse that supports 16 million American jobs, and serves to even up America’s trade imbalance with the world, Walters said. Another key “Tweeting” point: the bill drafted by the Senate Agriculture committee offers $23 billion dollars in cuts over the next ten years, compared to the current farm bill.

“We want members of Congress to know the kind of fiscal restraint and fiscal leadership farmers approve of–it’s the way we run our businesses and our household budgets and we think government needs to operate the same way,” said Walters.

NCGA felt it was a fortuitous time to launch the campaign because the Senate voted 90-8 to “invoke cloture” — the technical measure required to open debate on any bill. Very shortly, Senators will begin debating the bill and introducing amendments, and with the help of the encouragement through #farmbillnow, NCGA leaders hope Congress can pass the Farm Bill before its summer recess.