NCGA Executives in New York for Editorial Board Visits
National Corn Growers Association (NCGA) President Ron Litterer and Chairman Ken McCauley travelled to New York City Thursday for editorial board visits with the Wall Street Journal and New York Times. Their mission: to educate the editorial boards on key issues affecting corn growers such as ethanol, corn production and the farm bill. Litterer and McCauley also took the opportunity to set the record straight on the food and fuel debate. (More On This Story)
CUTC Early Registration Deadline Fast Approaching
Just a few days remain on the early registration discount for the National Corn Growers Association’s 2008 Corn Utilization and Technology Conference (CUTC). Registering by March 31 could save attendees up to $60 and exhibitors up to $300. Technical posters are also being accepted.
Scheduled for June 2-4 at the Kansas City Marriott Downtown, CUTC will emphasize the importance of identifying the next generation of technologies to sustain corn as nature’s feedstock of the future. Click here for more information, or to register or submit a technical poster.
Reports Show Global Stretch of Renewable Energy and Fuels
Two recent reports show how renewable and sustainable energy and fuels are spreading around the world, benefiting communities as well as ecosystems. And this global expansion includes corn ethanol, benefiting farmers in the United States and around the world, the NCGA noted.
“We’re really excited to see these numbers because we believe not only that renewable energy is a viable and sustainable alternative to dependence on petrofuels, but that it provides support and stability for family farmers around the globe,” said Ron Litterer, NCGA president and a grower from Greene, Iowa. “Farming has provided renewable fuel sources for centuries – while still feeding and clothing the world.”
The Renewable Energy Policy Network for the 21st Century, also known as REN21, reports that, in 2007, more than $100 billion was invested in new renewable energy capacity, manufacturing plants, and research and development. Production of biofuels (ethanol and biodiesel) exceeded an estimated 14 billion gallons in 2007, up 43 percent from 2005, and ethanol production in 2007 represented about 4 percent of the 343.4 billion gallons of gasoline consumed globally. The United States ranked No. 1 in fuel ethanol production, followed by Brazil, China, Germany and Spain.
In a separate report on clean energy trends, and the U.S.-based research firm Clean Edge states that the global biofuels market reached $25.4 billion in 2007 and is projected to grow to $81.1 billion by 2017.
Click here for more information on REN21. Its report can be downloaded directly here.
Click here for more information on Clean Edge, Inc. Its report can be downloaded here.
Margins Normalize as Farm Costs Rise
Despite higher grain prices U.S. corn growers are seeing production margins return to normal levels. During the last several years corn prices have reached historical levels, leading to increased profitability. Even though grain markets have continued to strengthen, farmers are now experiencing dramatic increases in the cost of all inputs, squeezing our margins.
“As planting season gets under way, we’re always watching our costs in the field and planning for the year,” said Ron Litterer, president of the NCGA and a grower from Greene, Iowa. “The higher costs we are facing, for diesel fuel and fertilizers, are an essential part of meeting all needs for corn.”
The U.S. Department of Energy estimates diesel prices are running approximately 50 percent higher than this time last year. Despite that dramatic rise in energy, growers are seeing dramatic increases in fertilizer prices.
Gary Schnitkey and Dale Lattz, of the University of Illinois Department of Agricultural and Consumer Economics, report that non-land costs for high-productivity farmland are estimated to be $370 per acre for corn, an increase of near $50 over 2007 levels. And corn non-land costs have increased over $120 per acre since 2003. More than half of the cost increase is associated with fertilizer. For corn, fertilizer costs are projected near $120 in 2008, an increase of over $30 per acre from 2007 levels.
One of the primary drivers behind higher fertilizer prices is international competition. Farmers in other countries are responding to higher grain prices also by expanding acreage and increasing fertility rates. This has a dramatic impact on the price U.S. growers pay for primary nutrients like nitrogen and potassium. Although the United States is a net exporter of phosphate fertilizer, increased foreign demand is driving up domestic prices as well.
For example, Peru and Brazil went from buying no U.S.-made nitrogen in 2007 to purchasing 130,661 metric tons in January, according to USDA.
As production margins return to more historical levels, growers are finding that their risk has increased dramatically. "Now more than ever growers need to manage financial risks associated with planting corn" Litterer said. |
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TODAY'S NEWS:
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Above: NCGA President Ron Litterer, left, and Chairman Ken McCauley, center, speak with Wall Street Journal editorial board writer Joseph Rago. Editorial board member Mary Anastasia O'Grady, not pictured, was also in attendance. Below: Litterer and McCauley meet with New York Times editorial board writers Robert Semple, Jr., left, and Eduardo Porter, right.
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AROUND THE CORN BELT
News from State Associations
OHIO: The Ohio Corn Growers Association (OCGA), which represents Ohio’s largest crop industry, has endorsed Ohio Gov. Ted Strickland’s $1.7 billion jobs package. Building Ohio Jobs is a $1.7 billion bond package that will create 80,000 jobs in Ohio. It will also lay the foundation for long-term prosperity in our state. The package will invest $250 million in advanced energy, allowing Ohio to take the lead in the fast-growing energy industry. Building Ohio Jobs will also invest $100 million in the state’s bioproducts industry, making new products from the crops grown in the Buckeye State.
“So much is happening in terms of renewable fuels, biofuels and advanced energy,” Gov. Strickland said.
The roads, bridges, rails, biomedicine, byproducts and advanced energy investments in this package will create jobs for Ohioans in the near term and will position our state as an economic leader in key industries.
OCGA shares in the governor’s vision for Ohio.
“As an industry we’ve been through struggles with $2.00 corn, which was below the cost of what it took to produce our crop,” said OCGA President Mark Drewes. “We appreciate what the governor is doing to ensure a better tomorrow for all Ohioans. The ability of the Ohio corn producer to supply the world will continue to be the backbone of this state and country. We look forward to the opportunity to lead agriculture to the next level.” (More on this Story)
Minnesota: Minnesota now has approximately 175,000 Flexible Fuel Vehicles, according to the latest estimate by American Lung Association of the Upper Midwest. Flexible fuel vehicles can use any combination of ethanol and gasoline, up to 85 percent ethanol-a formulation called E85.
This represents a jump up from an estimate of 125,000 vehicles made in 2004 and the growth comes from commitments by all three of the big U.S. automakers to market a growing number of these earth-friendly vehicles. GM, Ford and Chrysler have pledged to make FFVs half of their production by 2012. (More on this Story)
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Forum to Discuss Commodity Futures
The Commodity Futures Trading Commission (CFTC) has announced a public meeting in April to discuss recent events affecting the agriculture markets – including the lack of convergence between the futures and cash prices, higher margin requirements and the impact on market participants, and the role of speculators and commodity index traders.
Representatives of the NCGA plan to attend to make the organization’s position clear, especially regarding increases in daily trade limits, which the organization opposes.
“We look forward to the opportunity to be involved in this forum,” said Ron Litterer, NCGA president. “We’ve met with the National Grain and Feed Association to discuss concerns regarding recent proposals from the Chicago Board of Trade and the Chicago Mercantile Exchange to increase in trade limits, and we want to make sure that we can work together for what’s best for our industry and our nation’s economy.”
The forum is scheduled for 9 a.m. April 22, at the CFTC’s Washington, DC headquarters. Participants will include representatives from the U.S. Department of Agriculture and a broad set of stakeholders in the agricultural markets, such as exchanges, traders, merchandisers and producers.
Click here for more information on the CFTC.
DDGS Downstream Opportunities Session Planned For NCGA’s Corn Utilization and Technology Conference
A Distillers Dried Grains with Solubles (DDGS) Downstream Opportunities learning session will be featured at the National Corn Growers Association’s 2008 Corn Utilization and Technology Conference (CUTC), to be held this summer in Kansas City, Mo. A panel of experts will examine the new and changing dynamics of DDGS, from their usage in fabrics to polymers and from storing to pelletizing.
The session will provide insight into the opportunities that could expand uses for DDGS as we know them today.
“This session will discuss exciting new uses for distillers grains that will continue to add more value to ethanol plants across the country,” said session chairman Kelly Brunkhorst, agriculture program manager for the Nebraska Corn Board.
Panelists will include Dennis Bauer, University of Nebraska—Lincoln; Kurt Rosentrater, ARS; Chris Schilling, Saginaw Valley State University; and Yiqi Yang, University of Nebraska—Lincoln.
Scheduled for June 2-4 at the Kansas City Marriott Downtown, CUTC will emphasize the importance of identifying the next generation of technologies to sustain corn as nature’s feedstock of the future. Click here for more information, or to register or submit a technical poster.
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KEY ISSUES
