NCGA Calls Latest Farm Bill A Major Move Forward
The National Corn Growers Association is pleased the latest version of the farm bill, as agreed to early Friday, includes an optional market-based revenue countercyclical program. Lawmakers appear to have reached a tentative agreement on most major provisions of the bill. The House and Senate approved a two-week extension of the bill to allow the conference to complete its work on the agreement’s details.
“NCGA has been working on the inclusion of a revenue countercyclical program in the farm bill for three years and is happy to see it reflected in the latest version of the bill,” said NCGA President Ron Litterer. “We thank Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) and House Agriculture Committee Chairman Collin Peterson (D-Minn.) and all the members for their hard work and perseverance.”
NCGA also thanks the conference committee for including the Average Crop Revenue Election program modeled after legislation introduced by Sens. Dick Durbin (D-Ill.) and Sherrod Brown (D-Ohio) last year. For the first time, producers will have the option to participate in a state-level crop revenue protection program to better manage their risk.
Also of note is the Rural Development Title which includes $15 million for a Value-added Producer Grant Program. The program encourages independent producers of agricultural commodities to process their raw products into marketable goods.
Additionally, the Energy Title increases incentives to speed up commercialization of advanced biofuels such as cellulosic ethanol. The bill benefits farmers who produce biomass crops by providing grants and loan guarantees to support new biorefineries.
Members of the Senate Finance Committee and the House Ways and Means Committee continue to work on a number of tax provisions to provide funding for the bill. The committees have deliberated provisions affecting the Volumetric Ethanol Excise Tax Credit (VEETC) and the secondary tariff on imported ethanol. Final agreements are to be resolved next week.
The new Conservation Title also assists producers by including the Conservation Steward Program which provides incentives for improving and maintaining sound conservation practices on land in agriculture production.
Peterson and Harkin are expected to call for the House and Senate conferees to continue discussions on the remaining issues that must be resolved to advance a final farm bill agreement. The Congressional Budget Office still has to score the latest farm bill package before it goes to the president’s desk.
Increasing Food Prices: It’s All About Oil, Speculation, Drought and Worldwide Demand
At a press conference today, leaders from farm and ethanol groups pointed to skyrocketing oil prices, hedge fund commodity speculators, growing worldwide demand for grain and severe droughts as the major factors underlying rising food prices. They also pointed to the expansion of biofuels as preventing even higher oil prices. The groups cited Merrill Lynch analyst Francisco Blanch’s estimate that oil and gasoline prices would be about 15 percent higher, or $4.14 a gallon at today’s prices, if biofuel producers weren't increasing their output.
“A complex set of factors are at work helping to drive food prices higher around the world,” said former Secretary of Agriculture John Block. “Singling out biofuels like ethanol for all or even the majority of the blame misses the boat. Ethanol production and use is helping to keep oil and gasoline prices lower than they might otherwise be and preventing the situation from getting worse. We must maintain the focus needed to address our reliance of foreign oil and not fall victim to the blame game. Biofuel production not only makes our nation more energy secure, but helps provide the market incentives necessary to drive innovation in agriculture around the world.”
The primary factors contributing to rising food prices include skyrocketing oil prices, surging global demand for grain and meat from nations like China and India, hedge fund speculation on commodity markets, droughts in Australia and elsewhere, a weak dollar encouraging exports, and agricultural policies around the world that have limited the productivity of farmers from Europe to Asia.
“Making corn ethanol the scapegoat for the high price of food is unwarranted,” said National Corn Growers Association CEO Rick Tolman. “Efforts should be made to look into the $128 billion profits of the oil industry. To put things into perspective, in 1999 a barrel of oil cost $10, compared to $120 today. Consumers lose when the oil industry plays a cat and mouse game with the American people. Truth be told, Americans are actually saving $69 billion each year at the pump thanks to biofuels.”
“I find it ironic that efforts to reduce our dependence on oil are being blamed for increased food costs when, in fact, record high oil prices are playing a far greater role in increasing grocery prices than ethanol production. America's farmers and ranchers have been feeding the world for more than 200 years and will continue to provide safe, high quality products while, at the same time, playing a significant part in reducing our addiction to oil,” said National Farmers Union President Tom Buis.
According to the Federal Reserve Bank of Kansas City, “…a 10 percent gain in energy prices could contribute 5.2 percent to retail food prices. Since January, the price of oil is up approximately 30 percent.
Likewise, a recent study from Texas A&M University requested by Texas Governor Rick Perry concluded, “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.”
Similarly, an analysis conducted last June before the recent escalation in oil prices, notes, “Increases in energy prices for example exert a greater impact on food prices than does the price of corn. A 33 percent increase in crude oil prices – which translates into a $1.00 per gallon increase in the price of conventional regular gasoline – results in a 0.6 percent to 0.9 percent increase in the CPI for food while an equivalent increase in corn prices ($1.00 per bushel) would cause the CPI for food to increase only 0.3 percent.”
“Without question, the common denominator underlying all of the crises affecting the globe today is the skyrocketing price of oil,” said Renewable Fuels Association President Bob Dinneen. “With OPEC projections for oil soon reaching $200 per barrel, attempts to jettison the still-growing biofuels industry because of misplaced blame would relegate America and the world to more of the same. The fact is ethanol is helping reduce prices at the pump and keeping oil and gasoline prices lower than they might otherwise be. Considering the integral role oil plays in every part of the food production chain, forsaking ethanol would send both food and fuel prices still higher.”
The Center for Agriculture and Rural Development at Iowa State University estimates that the growth in ethanol production and use has caused gasoline prices to be $0.29 to $0.40 lower than they might otherwise have been.
NCGA Gratified by Bush Remarks on Corn Ethanol
National Corn Growers Association President Ron Litterer said corn growers are gratified by President George W. Bush statements today that corn ethanol is not the culprit for rising food prices.
In his press conference, President Bush told reporters weather, increased global demand and rising energy prices are the main culprits to rising food prices.
“Corn growers have been providing a solution to our nation’s energy problems by producing corn for ethanol use, in addition to our other markets,” Litterer, a grower from Greene, Iowa, said. “It is gratifying our nation’s chief executive acknowledge the reasons behind rising food prices.”
Corn growers have been the target of attacks in recent weeks that attempt to shift the blame to ethanol on rising food prices. “The price of a barrel of oil speaks volumes,” Litterer added. “Those who point the finger at farmers are ignoring the real problem--$120-a-barrel oil.”
|
|
FOR THE RECORD
“It’s Not Food, It’s Not Fuel, It’s China”
A change in Chinese meat consumption habits since 1995 is diverting eight billion bushels of grain per year to livestock feed and could empty global grain stocks by September 2010, according to a new study from Biofuels Digest. Click here for the report
AROUND THE CORNBELT
South Dakota: Today South Dakota leads the nation in raising public awareness for higher blends of ethanol as the Ethanol Promotion and Information Council (EPIC) and the South Dakota Corn Utilization Council (SDCUC) collaborate to launch a blender pump program across the state of South Dakota.
“Blender pumps will allow gas stations to sell more blends of ethanol-enriched fuel to consumers driving flex-fuel vehicles (FFVs),” said EPIC Director of Operations, Robert White. “The blender pump program will provide incentives and support to gas station retailers who want the opportunity to offer blender pumps, raise awareness to consumers, and offer flex-fuel vehicle motorists more opportunities at the pump.”
This major initiative will help gas station retailers obtain funding and the equipment needed to sell higher blends of ethanol, which range from E20 (20 percent ethanol and 80 percent unleaded gasoline) to E40 (40 percent ethanol and 60 percent unleaded gasoline) and can only be used in FFVs. One of the main goals is to increase the state’s blender pump infrastructure by installing a minimum of 100 new blender pumps over the next year. There are currently nearly 20 blender pumps in the state. All blender pumps will be branded with the stylized “e” logo and the necessary precautionary pump labels. Preexisting blender pumps will also be allowed to participate in the program.
“This is a monumental day for South Dakota as we link arms with EPIC and our state’s ethanol industry to initiate a far-reaching program to expand higher blends of ethanol through blender pumps. This is just the first step in a program that has the potential to go nationwide as consumers demand greater fueling options at the pump,” said SDCUC President, Reid Jensen. “Encouraging blender pump infrastructure development across the state will strengthen our economy.”
Additional resources will be available to the retailers taking advantage of this blender pump program including a marketing and PR campaign to increase public awareness, and pump promotions at stations housing blender pumps.
To apply for this program go to www.drivingethanol.org/southdakota or for more information contact the SDCUC office at 605-334-0100.
Missouri: The Missouri Corn Scholarship Committee is pleased to announce the recipients of the 2008 Missouri Corn Scholarships. Each student will receive a $750 scholarship funded by the Missouri Corn Growers Association (MCGA) and the Missouri Corn Merchandising Council (MCMC) to contribute to their college education.
Winners of the 2008 Missouri Corn Scholarships are:
- Katie Reisinger from Winfield, Mo., to attend Truman State University;
- Adam Francis from Norborne, Mo., to attend the University of Missouri;
- Brandon Thiel from Marshall, Mo., to attend the University of Missouri;
- Adam Casner from Carrollton, Mo., to attend the University of Central Missouri;
- Michael Manson from Brunswick, Mo., to attend the University of Missouri;
- Michelle Folta from Hawk Point, Mo., to attend the University of Missouri;
- Trent Braungardt from Moscow Mills, Mo., to attend the University of Missouri;
- Matthew Deane from Sikeston, Mo., to attend Southeast Missouri State University;
- Clay Deane from Sikeston, Mo., to attend Southeast Missouri State University;
- Leann Botkin from Salisbury, Mo., to attend Truman State University.
"We were pleased to receive a record number of qualified applicants this year," says Kenny McNamar, Missouri Corn Scholarship Committee chairman and farmer from Gorin, Mo. "These young people are the future of our industry. Our goal is to help them be successful."
Applications were reviewed by the Missouri Corn Scholarship Committee comprised of grower leaders serving on the Missouri Corn board of directors. This is the twelfth year Missouri Corn Scholarships have been granted to high school seniors and college juniors pursuing a degree in agronomy or related field.
"With nearly 70 applications, it was difficult to choose only 10 recipients," says McNamar. "Our sincere congratulations go out to the winners and all the applicants. With such bright, motivated young people interested in entering our field, it is easy to be optimistic about the future."
Applications for the 2009 Missouri Corn Scholarship program will be available on Missouri Corn Online after Dec. 15, 2008. To learn more about the corn industry, visit www.mocorn.org or call the Missouri Corn offices at (800) 827-4181.
|
|
KEY ISSUES
