China’s Imports Verify Corn Abundance

May 19, 2010

In late April, the U.S. Agriculture Department (USDA) announced the export sale of 115,000 metric tons (4.5 million bushels) of American corn to China.

As China’s population continues to increase, consumer demand for livestock/poultry does as well. More animal feed is required to feed its expanding livestock and the country has turned to American corn farmers to supply this need.

The U.S. Grains Council (USGC) is confident that an additional 250,000 to 300,000 metric tons or 9.8 to 11.8 million bushels may be headed to the country soon.

Many claim that the U.S. corn supply cannot serve all of its domestic markets – food, feed and fuel – but our country’s corn farmers are continually producing notable harvests using advanced technologies and equipment, and the latest seed varieties, to meet demand and China’s recent request is a case in point.

The majority of China’s corn imports come in the form of distiller’s dried grains with solubles (DDGS) – a co-product of the ethanol industry. Outside of the ag industry, most are unfamiliar with this valuable product. DDGS is the dried residue remaining after the starch fraction of corn is fermented with selected yeasts and enzymes to produce ethanol. Because it is protein and nutrient rich, this byproduct is commonly used in animal feed.

So much so, that approximately 3.2 to 3.5 million metric tons of DDGS are produced annually in North America.

According to Joe Victor, vice president of commodity-research advisory firm Allendale in McHenry, Ill., China is the No. 2 importer of U.S. DDGS with Mexico as the No. 1 importer. In 2009, China imported 661,320 metric tons (26 million bushels of corn and18.9 percent of the world market) of containerized DDGS from the U.S. compared to the previous year’s 97,940 metric tons.

“I don’t think the public at large knows the kind of DDGS exports we’ve been having,” Victor said.

In fact, some traders believe China’s corn imports may grow to more than 2 million metric tons for 2010, demonstrating the country’s reliance on American corn and a huge export opportunity for our corn market.

“The U.S. could easily sell 2 to 3 million metric tons of corn to China in the coming months without significantly impacting market conditions,” said Ross Korves, economic and trade-policy analyst. “U.S. farmers intend to plant about 2.3 million acres more corn in 2010 than in 2009, and early season planting weather is favorable for a quick start to the 2010-growing season.”

Though there has been concern about the capacity for the world corn market to handle another significant buyer, the American corn industry is again ready and able to deliver.

I know that our U.S. corn farmers will continue to supply more than enough corn to meet national and international demand.

Certification advances corn ethanol

April 21, 2010

A new ethanol limit in standard gasoline has been certified for two national fuel dispensers. Underwriters Laboratories (UL), an independent product-safety certification organization, approved a new industry allotment of E-25 fuel for Dresser Wayne and Gilbarco Veeder-Root – two leading fuel-facility service providers.

Twenty-five percent of fuel composition dispensed from these petroleum pumps at retail stations throughout the world can contain ethanol – an increase from the established E-10 limit (10-percent ethanol blended with petroleum) that is customary at retail stations throughout the country. E-25 can be used in standard engines without any adjustments.

“Motorists continue to call for ‘greener’ fueling solutions and retailers are demanding technologies that will help them stay in front of the market opportunity while managing regulatory changes,” said Scott Negley, director of alternative energy products at Dresser Wayne in a MarketWatch story. “Our Eco Fuel dispenser is in use across North America and is designed to handle the higher blends without modifications.”

The certification will help expand corn ethanol’s important role in America. Increased ethanol limits in standard gasoline will increase ethanol production for everyone’s benefit.

Domestic corn-ethanol production is not only good for our country’s agriculture sector, but it also stimulates rural communities by creating high-paying jobs, boosting local tax revenues and creating partnership opportunities for local businesses. In addition, it decreases our dependency on foreign oil, which is vital to our nation’s security and economy.

“Increasing consumer demand for ethanol-based fuels, combined with incentive programs to encourage the development of an infrastructure to deliver these fuels, is helping to create demand for a range of products,” said Chad Johnson, product manager at Gilbarco Veeder-Root.

Ethanol production makes fuel cheaper for consumers and is essential to achieving the requirements of the Renewable Fuels Standard that was enacted in the Energy and Security Act of 2007, which states that the U.S. must use 36 billion gallons of biofuels by 2022.

This certification helps prompt important legislation currently residing in Congress that urges the EPA to adjust ethanol’s standard-blend allowance.

Ohio Corn Growers Association (OCGA) and other ethanol-related groups, including the Renewable Fuels Association (RFA) and American Coalition for Ethanol (ACE), support measures that increase the allowable amount of ethanol in standard gasoline. The U.S. Environmental Protection Agency (EPA) is currently considering allowing blenders to increase the industry standard from E-10 to E-15. This past year, UL certified the use of E-15 for all domestic fuel pumps.

Ethanol awareness and education is important. Knowledgeable consumers and lawmakers can shape the direction of a more energy-secure, environmentally conscious and economically productive nation.

D.C. Discussions Advance Corn Issues

March 10, 2010

I recently joined several Ohio Corn Growers Association (OCGA) board members on a trip to Washington, D.C. The goal was to engage legislators in discussions about issues central to Ohio’s 20,000-plus corn farmers in our nation’s capital.

During our visit, we met with all 20 members of the Ohio delegation (18 representatives and two senators) including special events with Rep. Marcy Kaptur and Sen. Sherrod Brown. We also met with administrators of organizations such as the EPA, USDA and Risk Management Agency.

Driving home the fact that agriculture is Ohio’s No.1 industry, it was important for me to reiterate that voters in rural and urban districts alike are directly affected by its continued growth and success.

On behalf of OCGA and Ohio agriculture at large, we participated in constructive discourse about three integral issues:

  • Extension of the Volumetric Ethanol Excise Tax Credit (VEETC) – This blender’s tax credit provides $.45 for each gallon of ethanol blended with gasoline and expires at the end of this year. The credit provides thousands of jobs, fuels economies and helps the U.S. to meet its mandated biofuels-production standard. The elimination of this credit will result in a 38-percent jobs and production loss. VEETC brings dollars back to the U.S. Treasury in the billions, eliminates more than $22 billion in oil imports and has led to a reduction of farm payments of more than $10 billion. Despite the success of the ethanol industry, some members of the Ohio delegation want its advancement to end – even delegates from areas where corn represents the largest economic portion of their district.
  • Indirect Land Use – Corn is unfairly blamed for the destruction of rainforests in countries such as Brazil for the production of corn ethanol. Our own research and travels to Brazil brazenly dispute these facts. Corn farmers are utilizing technology and innovation to grow more corn using fewer acres. The public needs to be educated about these truths to bolster the reputation of our farmers.
  • Expanding International Markets – OCGA supports a one-way trade expansion to provide food to Cuba. This in no way reflects a support of the Cuban government. Instead, it provides significant economic opportunities for our nation by easing simple restrictions on food, medical supplies and travel to allow for easier exports.

OCGA will continue to advocate its stance regarding these issues, and we will also continue to be a resource for legislative issues concerning agriculture. Ohio policymakers must support the interests of the industry that is the foundation of the state.

In the coming weeks, OCGA will be kicking off a grassroots-activism plan that will encourage consumers to get involved in the legislative process. We cannot let D.C. policymakers take farmers for granted.

State and Federal Governments Advocate for Ethanol

January 29, 2010

From the halls of Washington and the Ohio Statehouse, the future for ethanol is bright.

It’s potential and significance was made evident after listening to both Ohio Gov. Ted Strickland’s State of the State Address and President Barack Obama’s State of the Union Address. I was happy to hear the officials’ plans for implementing renewable-fuels production in our state and throughout our country.

OCGA will monitor both Gov. Strickland’s and President Obama’s progress in the coming months and will also continue to provide information about opportunities to develop infrastructure for a growing industry. Promises are one thing; action is what OCGA is looking for.

Here are some of the key comments in both speeches.

“We are taking the vital next steps to advance our energy economy,” Strickland said, citing the creation of the Energy Gateway Fund to invest in fuel cells, solar, wind, energy storage and the like in the Buckeye State.

Ethanol’s influence is far-reaching in terms of its economic, environmental and energy-security benefits. Strickland and Obama are well aware of these benefits.

Ethanol Stats

  • In 2009, the U.S. ethanol industry supported nearly half-a-million jobs.
  • Research shows a 35 to 46 percent reduction in greenhouse-gas emissions and a 50 to 60 percent reduction in fossil-energy consumption because of the use of ethanol as a motor fuel.
  • The production and use of 10.6 billion gallons of ethanol in 2009 displaced the need for more than 321.4 million barrels of oil and saved American consumers and taxpayers more than $32 billion.

“Providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation,” Obama said.

To ensure our progress, both leaders noted that Ohio and the country at large must be proactive and resolute.

“We’ve made it this far, this fast on advanced energy because we pursued smart, responsible policies and we made smart, responsible investments,” Strickland said.

Obama concurred, “But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies.”

My conviction in ethanol as a premier biofuel is greater than ever. OCGA will continue to advocate ethanol as a domestic, green-energy source and will also campaign to increase the allowable limit of ethanol-blend fuel at the pump.

I hope both our state and nation continue on the path of advancing ethanol for everyone’s benefit.

‘Til next time,

Dwayne Siekman

Ohio Corn Growers Association’s priorities in sync with U.S. priorities

January 19, 2010

After reviewing an informal poll about our farmer-board members, I’ve recognized one thing: The goals of OCGA in 2010 coincide with the goals of the nation—with an overarching result to revive the economy.

The Washington Post and numerous other media outlets say now that the health-care debate is wrapping up in D.C., the focus is back to jobs.

While I won’t comment about the health-care debate, I can tell you that the farming industry is in the business of providing jobs to Americans, even as segments of other industries ship out jobs overseas.

Agriculture in Ohio is nearly a $98 billion industry. It supports an array of jobs both for farmers and businesses that support farming, such as equipment dealers, fertilizer suppliers, ethanol plants and seed companies. Ohio’s ethanol plants have invested hundreds of millions of dollars into providing new jobs and new uses for the abundant corn crop grown here in the Buckeye State.

In February, we will accompany our farmers on a mission to Washington, D.C., to talk about how farming contributes to the economy and why votes in favor of agriculture help all Americans.

For example, ethanol production has spurred job growth not only in Ohio but also in many other states; we need to continue to provide information showing the economic, environmental and national security benefits of this domestic fuel. We are educating lawmakers about the need for higher blends and advocating for an increased ethanol-blend requirement as ethanol production creates green jobs, stimulates corn demand and reduces foreign sources of energy.

Food is vital for survival. Therefore, OCGA will continue to focus on the issue of safeguarding livestock production to ensure a safe, reliable food supply. As corn growers, we provide feed to livestock and poultry in Ohio and overseas that maintains this food supply. Numerous studies and reports show that more and more people will go hungry in the coming years because they lack access to this abundant supply. By advocating for improved trade agreements that open foreign markets to U.S. agriculture products, we can continue to feed the world while keeping and creating jobs in the U.S. And by protecting livestock production in America, we can keep up with demand for food in our own country.

Another way we’re guaranteeing our economic climate is to be at the table in talks about greenhouse gas legislation. Year after year, farmers are producing more with less and reducing emissions. OCGA will remain visible in this debate to ensure that agriculture is seen as a solution to increased emissions worldwide and at the same time, is not penalized by any legislation that could negatively impact our industry.

Come February, our grassroots advocates—your farmer neighbors—will have materials in hand to show legislators what agriculture means to the economy in Ohio.

Corn’s portion of economic success is secure and continues to grow with the nation’s needs.

I look forward to blogging about my experiences in D.C. as I campaign for corn’s increased role in supporting America’s economy.

Agriculture and Greenhouse Gas Emissions: A Look Back at Copenhagen

January 12, 2010

My recent visit to the Copenhagen Climate Conference was a great opportunity for me to represent Ohio farmers with a global community. It allowed me to discuss the position of American agriculture as it relates to global climate policy with professionals throughout the world.

And though Copenhagen has come and gone, I’m still considering how climate-change discussions impact agriculture, specifically how agriculture and greenhouse gas reductions are tied together more than ever.

The number of opinions on both sides of the climate debate seems endless and will remain up for debate. What isn’t up for debate is agriculture’s role in reducing GHGs through precision farming, methane digesters, nitrous oxide emission reductions and new technology.

The agriculture industry includes a variety of players – scientists, farmers, politicians and more – and each has something to say about the state of our environment.

The variety of voices at the Copenhagen Climate Conference underscored the following:

• World agriculture accounts for only 14 percent of all global greenhouse gas emissions, yet it disproportionately receives a lot of blame.
• Agriculture can play a substantial role in greenhouse gas reductions when its members utilize advanced technology and techniques.
• Attention to renewable fuels has been re-emphasized and the corn industry should pay attention to how it can leverage ethanol

The significance of greenhouse gas mitigation will only increase as we all search for ways to better the space we live and breathe in every day. Now more than ever, it’s important to become a voice for our country in dispelling the myth of the negligent farmer and replace that stereotype with the truth of the thousands of farmer’s nationwide practicing responsible farming.

I look forward to continuing my knowledge in this subject matter and also to relaying more information about the corn industry to you. I hope you visit often.

‘Til next time,

Dwayne

OCGA Will Continue To Provide Factual, Unbiased Information in 2010

December 29, 2009

Corn farmers experienced a number of highs and lows in 2009 and have much to look forward to in 2010. OCGA vows to continue to be the voice of corn farmers in Ohio throughout all modes of communication, through personal visits with lawmakers to blogs, e-newsletters and district meetings.

The organization has established a track record of being a reputable source of information on a multitude of topics and we will continue to provide quality data analysis and information to lawmakers, media and consumers. (See our updated Reports Downloads section for even more information on our industry.)

I bring this up as OCGA was recently questioned in an e-mail about statements we have made in the press regarding ethanol’s impact on food prices. The sender of the e-mail cited a recent blog that contradicted OCGA’s statement: The blog author reported that the Congressional Budget Office found that ethanol raised food prices 10 – 15%, which contradicts OCGA’s statements of 0.5 – 0.8%. The e-mail asked who should people believe and where do we get our information to make such statements.

Here was our response: The blog you cited seemed to conveniently leave out the CBO number of 5.1%, which happens to be the percentage rise in food prices between April 2007 and April 2008 … this is the timeline the report focused on. Based on the entire data, expanded ethanol production during this time contributed between 0.5 and 0.8 percentage points of the increase in food prices measured by the consumer price index. In comparison, the CBO found that the increase in the CPI attributed to increase in energy prices, specifically crude oil, was more than double corn ethanol’s impact.

Our assessment of the CBO report was based on its entirety, whereas the blogger misinterpreted the information to fit his own agenda. Our goal is to provide factual, constructive information for our farmers, consumers and lawmakers. We work closely with government offices, universities and those in the industry to better educate our members and friends.

The e-mail did bring a couple of observations to the forefront: Who should people trust for information, and are blogs just a convenient method of finding “facts” to support one’s personal views?

The staff at OCGA and at the National Corn Growers Association will continue to provide analysis on trends, data, markets and economics without personal opinion sprinkled in and you can continue to count on our organizations to share quality information based on facts.

OCGA has become a reputable source for information, with quotes in large daily newspapers such as the Cleveland Plain Dealer and the Columbus Dispatch, and many have acknowledged that OCGA does not revert to inserting personal opinions in information but does utilize the sound data analysis with reputable sources throughout the world.

I will continue to discuss agriculture issues in this blog on a regular basis, so I encourage you to check back. I also hope that you take the time to comment below to promote constructive discourse.

OCGA wishes everyone a Happy New Year.

Dwayne

Overlooked: Copenhagen’s Ag Day Similar To Heisman Trophy Presentation

December 13, 2009

For those not familiar with Denmark’s time zone, it is six hours ahead of Ohio’s eastern time. So when I wanted to watch the Heisman Trophy announcement, I realized I had to stay up until 3 a.m. to see if my choice, Ndamokong Suh (I am a Cornhusker fan), pulled off an upset.

Although I have no problem with Mark Ingram winning the award, I can’t understand how Colt McCoy finished a close third and far ahead of the player who dominated him in a head-to-head matchup. Mr. Suh, the most dominant player in college football this year in my opinion, was simply ignored by a vast majority of voters. Do Heisman voters actually watch the games? Do they understand what they are watching?

The entire Heisman voting process reminded me of the COP 15 Ag Day that I participated in yesterday here in Copenhagen. Agriculture and Rural Development Day (ARDD) brought together policy makers, climate-change negotiators, rural-development practitioners, farmers, civil society, scientific community and academia.

From the outset of ARDD, it was obvious that U.S. agriculture, the most dominant “player,” was not being looked at by the rest of the world as being a leader in terms of providing opportunities for farmers in this new arena. My observation was that the participants of ARDD believe the focus should be on farmers in developing countries that have struggled for decades in producing food and feed and criticizing Western Civilization agriculture for being too productive.

I was shocked, to say the least. Here we have the world’s leader in producing food, feed and fuel from crops, the world’s leader in utilization of new technology and the world’s leader in efficient production practices that offer the best bet for greenhouse gas (GHG) reduction. Sadly, the ARDD participants (much like Heisman voters) decided to ignore the obvious.

Worldwide greenhouse-gas emissions from agriculture account for 14 percent of all GHG emissions, but of that 14 percent, over 74 percent of the agriculture-based GHG emissions come from developing countries. It is obvious that U.S. farmers have been and will continue to do their job, but the rest of the world believes the U.S. should pay to bring everyone to their level. Fred Yoder and I had a chance to meet one on one with a U.S. negotiator and it became clear that developing countries want the U.S. to shoulder much of the load in GHG mitigation.

With that being said, the U.S. agriculture sector was not engaged as the most “dominant” player at this conference. Although U.S. agriculture interests from a small number of sectors participated, much of U.S. agriculture (like Heisman voters) decided to take the safe path and continue playing (voting) as if the playing field hasn’t changed, instead of taking a hard and bold look (voting) at how U.S. farmers can play in the new worldwide arena. Shame on us.

One segment I was surprised to learn that has realized the time is now to learn how to function in this new environment was the fertilizer industry. Representatives of the fertilizer industry shared with me their development of nitrous oxide emission-reduction protocols for farmers as well as other GHG mitigation tools for farmers. OCGA will continue to learn more and share this development.

One speaker, Tim Searchinger, who has often maligned corn farmers and corn ethanol, had a chance to present his latest paper in a mini-session. Corn farmers should note that two of your leaders, Darin Ihnen, NCGA President, and Fred Yoder, both spoke out against Mr. Searchinger’s  data and conclusions in his session, and their comments were roundly echoed by other scientists in the room.

As I sign off, I’d like to congratulate Ndomakong Suh for an excellent season and to say to Colt McCoy … Roll Tide!

Dwayne

Greetings from COP 15

December 12, 2009

For those of you wondering what COP 15 stands for, it is simply the United Nations designation for Conference of the People … the meeting in Copenhagen happens to be the 15th Conference of the People for the U.N.

Our day at COP 15 focused on Indirect Land Use Change and deforestation in the Amazon: Two topics that on the surface do not seem to be connected to Ohio corn farmers, but over the last couple of years, much of the blame has been placed on the backs of corn farmers in the U.S. Blame that has not been based on facts, but instead has been based on fear.

John Cain Carter of Allianca de Terra, a Mato Grosso, Brazil land alliance, has been front and center on the debate of Amazon deforestation and the principle reasons why it is happening. Mr. Carter, a former U.S. Army Ranger, is not shy about dispelling myths of corn and corn ethanol’s role in deforestation.

His simple and direct answer is “the notion that the U.S. corn farmer is playing a role in the deforestation of the Amazon is asinine. No one in Brazil makes decisions based on how much ethanol is produced from corn in the U.S.”

Mr. Carter goes on to explain it is simply a case of economics: The land is more valuable economically than the trees and much of the damage is created by illegal land grabbers. The Allianca de Terra is focused on changing that dynamic by participating in offset programs to increase the economic value of keeping the Amazon forest vibrant.

He makes a good case that U.S. agriculture should participate in this discussion. OCGA will continue to work with Mr. Carter and discover ways to further our partnership.

Today is Ag Day for COP 15. OCGA Board Member Fred Yoder and I will be participating in this event featuring breakout sessions on Biochar, Solutions to deforestation and managing soils and verification systems for GHG mitigation. USDA Secretary of Agriculture Tom Vilsack will be the featured speaker at noon. I’ll post a more detailed report tomorrow as Ohio agriculture steps up to the stage with world leaders in discussing what the future holds.

Dwayne

Our First Day in Copenhagen

December 11, 2009

I want to start off today by thanking the city of Copenhagen and its people for their hospitality and warm welcome. Everyone has been very helpful and extremely friendly.

The talk of the conference on my first day in attendance has been the
U.S. EPA’s endangerment finding on greenhouse gases, specifically
cardon dioxide, methane and nitrous oxide emissions. EPA’s ruling did
not come as a surprise to me and the Ohio Corn Growers Association as
this direction has been put in place since the Supreme Court ruling in
April of 2007. The Clean Air Act and its amendments provide a “clear
statutory command,” the majority of the Justices said, and “Greenhouse
gases fit well within the Clean Air Act’s capacious definition of air
pollutant,” ruled Justice Stevens.

It seems that EPA’s decision has caught everyone off guard, when in
reality, the decision was just a matter of time. Many attendees are
wondering if legislation in the U.S. will gain momentum now. That
remains to be seen, of course. Regardless, agriculture can play a
substantial role in greenhouse gas reductions as farmers continue to
utilize new technology and new methods of producing corn. The last few
years are proof that farmers will continue to produce more with less
land, fewer inputs and emissions and less water consumption per bushel.

This ruling has been the catalyst for OCGA’s involvement in carbon
sequestration efforts with no-till and researching future agriculture
offset economic opportunities for farmers. If the U.S. follows EPA’s
path, agriculture has much to lose and costs will skyrocket across the
board with no opportunity to be a part of an offset market.

Friday’s agenda includes roundtable discussions with our counterparts
in Brazil as we continue to develop new ways to partner. John Carter
of Allianca de Terra will be joining OCGA Board Member Fred Yoder and I in a
presentation on our mission to Brazil and John’s mission to Ohio this
past August.

More to come soon…

Dwayne




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