NCGA Applauds Sen. Conrad’s Work on Farm Storage Facility Loan Programs
The National Corn Growers Association (NCGA) applauds Sen. Kent Conrad’s (D-ND) legislative efforts on the Farm Storage Facility Loan Program. Sen. Conrad worked to ensure that important changes to the program were included in Senate Agriculture Committee Chairman Tom Harkin’s (D-Iowa) committee mark. The chairman’s bill is awaiting Senate floor action.
“On-farm storage is an important issue for producers,” said NCGA Corn Board member Bart Schott. “Storage options allow growers to better market their commodities in an often cyclical marketplace.”
Schott noted that the legislative language is only the first step toward ensuring that the program addresses the increasing costs and issues involved with storage. “We have a long road ahead of us to protect this provision throughout the farm bill process. It is not a done deal yet.”
Program changes include an increase in the maximum principal amount of a storage facility loan to $500,000, an increase in the term of such loan to 12 years and a provision that would direct the Secretary of Agriculture to provide for partial disbursement of the principal to facilitate the purchase and construction of the facilities or their upgrades. Currently, the loan limit is $100,000 with a maximum tenor of seven years. The program provides for low-cost financing for producers to build or upgrade on-farm storage or handling facilities.
The U.S. Department of Agriculture’s Farm Service Agency is responsible for administering the Farm Storage Facility Loan Program under the authority of the Commodity Credit Corporation Charter Act. The program will provide funds for a variety of crops, including grains, oilseeds and renewable biomass.
Rolling Stone a Corn Smut Honoree
Rolling Stone earned the first Corn Smut Award on the Corn Commentary weblog, under the Worst Quote category, for an emotional diatribe against ethanol that shows why the magazine should stick to what it does best: covering the arts, not the sciences.
New USDA Numbers Dispel Food And Fuel Debate; Supply Set to Outpace Demand
The National Corn Growers Association (NCGA) is encouraged by last week’s U.S. Department of Agriculture (USDA) crop production report illustrating that the United States will have enough corn to support the country’s food supply, ethanol, and export uses.
For the marketing year ending in August 2008, the corn supply is projected to reach nearly 14.5 billion bushels, while demand is expected to hit 12.6 billion bushels. USDA estimates the 2007 corn crop will reach 13.2 billion bushels, the largest crop in U.S. history and 25 percent larger than the 2006 crop.
“The USDA World Supply and Demand (WASDE) figures unmistakably dispel the food versus fuel debate,” said NCGA President Ron Litterer. “Clearly, the corn industry is poised to meet the demands for biofuels and will finish the marketing year with one of the highest levels of surplus in the last 20 years.”
“U.S. corn growers will continue to be reliable suppliers of both food and fuel,” he added. “Farmers respond to signals from the marketplace. If the market calls for more corn, that’s what farmers will grow.”
Litterer points out some common misperceptions about ethanol. “Ethanol production uses field corn—not sweet corn,” he said. “I continue to be amazed by media reports that suggest ethanol is driving up the cost of sweet corn in grocery stores. The majority of feed corn is fed to livestock, not humans. Roughly 10 percent of field corn is processed directly into human food, like corn flakes.”
Data from the Economic Research Service (ERS)—part of USDA—found that the Consumer Price Index (CPI) for all food is forecast to increase 3.5 to 4.5 percent in 2007. ERS attributed this increase to retailers who pass on higher commodity and energy costs to consumers in the form of moderately higher retail prices. Moreover, the CPI for food increased 2.4 percent in 2006 and, over the past 10 years, has increased at an average annual rate of 2.5 percent (1997-2006).
USDA Chief Economist Keith Collins issued a statement Oct. 18 before the House Agriculture Committee, highlighting this year’s successes: “As we conclude 2007, the U.S. farm economy is coming off unprecedented increases in income and asset values the past few years. Prospects for expanding global food and fuel demand look bright. More normal weather and farm production increases worldwide should lead to improved supply-demand balance.”
Ethanol Leaders Blast U.N. Official’s Comments
The world's largest ethanol trade associations sent a letter Monday to United Nations Secretary General Ban Ki-moon expressing concerns over “apocalyptic” public statements as well as the interim report issued by U.N. Special Rapporteur on the Right to Food Jean Ziegler.
Those sending the letter include the leaders of the Canadian Renewable Fuels Association, the European Bioethanol Fuel Association, the Brazil-based Sugar Cane Industry Association and the U.S.-based Renewable Fuels Association (RFA). Last week, the National Corn Growers Association decried the statements made by Ziegler.
In the letter, the group stated: “The apocalyptic statements made by the Special Rapporteur, calling biofuels production a ‘crime against humanity’ and a ‘recipe for disaster,’ are not only unjustified but also unacceptable to those of us who contribute to this emerging industry and millions of people around the world who benefit from renewable biofuels everyday.” They further pointed out that other respected organizations, some of which are U.N.-affiliated, maintain that “biofuels offer an opportunity to developing countries to revitalize agricultural production, to expand and diversify exports, and to produce a domestic source of electric power through co-generation.”
Last week during a global meeting of leaders in the biofuels industry being held in Amsterdam, these same leaders issued a joint statement about the necessity of a robust global ethanol industry. Click here for more information, including full text of the letter and the statement.
Massachusetts Rep. Bill Delahunt got to the heart of the matter regarding an increased renewable fuels standard in a Roll Call op-ed last week. His clear thinking on the need for corn-based ethanol in an RFS is evident:
As Congress makes final decisions on the energy bill, one of the most important decisions to be made is whether or not to implement a more aggressive national renewable fuels standard (RFS). This is a no-brainer. A responsible energy bill must contain an RFS.
Delahunt knows there is no silver bullet solution for weaning our dependence on oil. But he wisely acknowledges that the biofuel of today–corn-based ethanol–is the path to tomorrow.
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