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News > Corn Commentary > March 7, 2008 Volume 15 Number 9
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NCGA's Mission: To Create and Increase Opportunities for
Corn Growers

This is Corn Commentary, the weekly newsletter for state and national grower leaders of the National Corn Growers Association (NCGA).  For complete stories and updated NCGA information, visit www.ncga.com or the NCGA Leader Resource Center, www.insidencga.com.

LISTEN TO THIS WEEK’S AUDIO STORIE:

IN THIS ISSUE:

  • New Reports Look at Ethanol Industry Progress and Outlook
  • NCGA Disappointed Commodity Program Spending Threatened for New Farm Bill
  • USDA to Showcase BioPreferred Procurement Program
  • Ethanol Industry Boosts National Economy
  • National 25x’25 Summit to Highlight Value of Renewable Energy
  • Corn Growers Need a Farm Bill, Says NCGA President
  • NCGA Leaders Congratulate CEO Tolman on Agri-Marketing Award
  • Commodity Classic Reaches Record-Breaking Numbers in Nashville, Tenn.
  • NCGA, BASF Recognize Scholarship Winners
  • Weekly Stories from the Corn Commentary Blog

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New Reports Look at Ethanol Industry Progress and Outlook
The U.S. ethanol industry produced a record amount of fuel ethanol in 2007, according to year-end data released recently by the U.S. Energy Department’s Energy Information Administration (EIA) – 32 percent more ethanol than in 2006. And capacity for ethanol production is expected to grow another 4 billion gallons in 2008, according to the Renewable Fuels Association (RFA).

The NCGA hailed this as great news for U.S. corn growers, who are always looking for stability and expansion in markets for the corn they produce.

“We’re excited to see such growth in the production of ethanol and to see the expansion of the industry’s overall production capacity,” said Steve Ruh, chairman of Inca’s ethanol committee and a grower from Sugar Grove, Ill. “There are so many benefits to producing and using corn ethanol, whether it is greenhouse gas reduction, energy security or important co-products such as distillers grains. Our growers are committed to working with the ethanol industry in promoting these benefits and providing valuable goods to the nation’s consumers.”

In its December monthly oxygenate report, released March 3, the EIA reported that U.S. ethanol production averaged 423,000 barrels per day, for a total of 6.48 billion gallons for the year. This is an increase of 108,000 barrels per day over 2006. Further, according to the EIA, ethanol demand averaged 446,000 barrels per day in 2007, or 6.84 billion gallons of demand for the year. That is an increase of more than 1.5 billion gallons over 2006 demand.

Looking ahead in the near future, the organization sees room for increased production to meet the requirements of an expanded renewable fuels standard. Current ethanol plant capacity is 7.884 billion gallons, with another 5.536 billion gallons of capacity under construction. The completion of these projects would bring ethanol production capacity to nearly 13.5 billion gallons.

Click here for the Urfa’s report on 2007 ethanol production and demand.
Click here for the Urfa’s 2008 ethanol industry outlook publication.

NCGA Disappointed Commodity Program Spending Threatened for New Farm Bill
The NCGA has learned that Congressional Budget Office (CBO) projections threaten to lower commodity program spending for the new farm bill.

This is important to producers because the CBO is charged with preparing a cost analysis, or score, of the projected spending for the legislation now under consideration by the House and Senate agriculture committees. With the Cob’s release of the March 2008 baseline and the lack of an agreement on budget offsets, NCGA expects the current farm bill to be extended into April.

NCGA President Ron Letterer says producers have waited long enough for completion of the farm bill. “Congress needs to come to a consensus on the farm bill so that growers can make decisions for this year and the next for their farming operations,” said Letterer. “NCGA is adamant that a viable optional revenue component—one that adapts to the greater risk and volatility in the market—be included in the farm bill.”

Additionally, the House, House Ways and Means and Senate Finance Committees will have to have to come to an agreement on the budget offsets and revenue raisers before the farm bill conference can proceed to a final farm bill conference.
 


NCGA Official Participates in D.C. Panels


NCGA Vice President of Public Policy Jon Doggett (second from left) participated in the Farm Foundation’s forum today at the National Press Club in Washington, D.C. Joining him are (from left) Scott Faber, Grocery Manufacturers/Food Products Association; Sophie Milam, Bread for the World; Ephraim Lei tag, USDA Economic Research Service; and former Congressman Charlie Stenholm (D-Texas), who served as moderator. Topics included U.S. food prices, ethanol, and corn production. During his remarks, Doggett emphasized how increased corn production and surplus will enable the corn industry to meet the growing demands for food, feed, and fuel. Also today, Doggett participated in a panel discussion on the renewable fuel impacts on the agricultural industry, sponsored by the Association of American Pesticide Control Officials.

AROUND THE CORN BELT
News from State Associations

Minnesota:. The State of Minnesota released a study this week reporting that increasing the amount of renewable ethanol blended into gasoline from 10 percent to 20 percent does not present problems for current vehicles or fuel dispensing equipment and provides similar power and performance. The year-long research effort used 40 pairs of vehicles commonly found on American roads and found that increasing ethanol blends from 10 percent (E10) to 20 percent (E20) in a gallon of gasoline provided an effective fuel across a range of tests focusing on drivability and materials compatibility. "Using homegrown renewable fuel is an important part of Americanizing our energy future and unhooking our country from foreign sources of oil,” Minnesota Gov. Tim Pawlenty said. “This study shows that we can safely increase the amount of ethanol blended with gasoline for use in today’s vehicles. We’re proud that Minnesota is helping lead the nation to a cleaner, more secure energy future and we’re hopeful that other states will continue to join with us in this effort.” The state of Minnesota conducted the study as part of the process to meet a state law that requires ethanol comprise 20 percent of all gasoline sold in the state beginning in 2013. Minnesota and its partners will soon apply to the EPA for a waiver to federal rules that will allow E20 to be used in all of the state’s gasoline.

 

USDA to Showcase BioPreferred Procurement Program
The U.S. Department of Agriculture (USDA) will hold a BioPreferred biobased product showcase program to increase the procurement and use of biobased products – such as those that are corn-based -- for federal agencies and their contractors to enable the marketing of biobased products.

The event will be held in conjunction with the 2008 General Services Administration (GSA) Expo, April 21-24, in Anaheim, Calif. Members of the bioproducts industry can network with more than 6,000 federal and state procurement officials to learn how to sell to the federal government and to learn more about the federal BioPreferred program. Additionally, biobased product vendors are invited to share limited exhibit space with USDA to showcase products and meet potential customers.

The BioPreferred program was created by the Farm Security and Rural Investment Act of 2002 (FSRIA), and its preference requirements were recently added to the Federal Acquisition Regulations, which outline the uniform policies for Federal procurement officials and contractors.
Click here for more information on the showcase event.
NCGA maintains a database of corn-based products here.

Ethanol Industry Boosts National Economy
When it comes to supporting U.S. manufacturing, providing jobs or filling the coffers of government treasuries, the U.S. ethanol industry is doing its fair share – and then some, according to a new study on ethanol’s economic impact.

One of the greatest things about the report, the NCGA recognizes, is that ethanol keeps U.S. dollars in the United States. According to the report’s author, economist John Urbanchuk, a director at the research and analysis firm LECG, the production of nearly 6.5 billion gallons of ethanol means that the United States needed to import 228.2 million fewer barrels of oil in 2007 to manufacture gasoline, or roughly the equivalent of five percent of total U.S. crude oil imports. The value of the crude oil displaced by ethanol amounted to $16.5 billion in 2007 – money that stayed in the American economy.

“The hallmark of energy security is reducing our dependence on other countries for vital energy commodities such as oil,” said NCGA president Ron Litterer. “Whether it is corn ethanol, other biofuels, or even petroleum, we need to produce a higher percentage here within our own borders. It’s important for American jobs and American security.”
Other highlights of the report are:

  • The combination of spending for annual operations, ethanol transportation, and capital spending for new plants under construction added $47.6 billion to the nation’s gross domestic product (GDP) in 2007.
  • The increase in economic activity resulting from ongoing production and construction of new capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 jobs in America’s manufacturing sector -- American jobs making ethanol from grain produced by American farmers.
  • Increased economic activity and new jobs result in higher levels of income for American households. The production of ethanol put an additional $12.3 billion into the pockets of American consumers in 2007.

The ethanol industry generated an estimated $4.6 billion in tax revenue for the federal government -- $1.2 billion over the two major federal support programs for the ethanol industry. And the ethanol industry generated an additional $3.6 billion of tax revenue for state and local governments.   Click here for more information.

National 25x’25 Summit to Highlight Value of Renewable Energy
An upcoming conference will offer the latest in research and policy developments that will help make America's farms, ranches and forestlands major players in a new energy future. The National 25x'25 Renewable Energy Summit is scheduled for March 11-13 in Omaha, Neb.

At the conference, participants will have the opportunity to learn the latest from leading renewable energy experts from across the nation. More than two dozen pre-eminent authorities on biofuels, biomass, wind, solar and other land-based renewable energy sources will address the summit. Also, those attending can learn how American agriculture and forestry will help shape our energy future and see the latest in bioenergy research.

The 25x’25 vision is endorsed in the energy bill President Bush signed in December. By 2025, the agricultural, forestry and working land of the United States should provide from renewable resources not less than 25 percent of the total energy consumed in the United States and continue to produce safe, abundant and affordable food, feed and fiber. Click here for more information on the summit.’

Corn Growers Need a Farm Bill, Says NCGA President
The National Corn Growers Association (NCGA) says work on the farm bill needs to be expedited so producers can make farming decisions for this year and the next. 

“NCGA is pleased discussion is continuing on the farm bill,” said NCGA President Ron Litterer, a grower from Greene, Iowa. “We hope that all sides involved will quickly come to an agreement and get the bill completed by the March 15 deadline.”

Yesterday, House agriculture committee chairman Collin Peterson (D-Minn.) said there might be another one-month extension of the farm bill, pushing the completion date back until April 15.

“While commodity prices remain well over target price levels, it is important that growers be able to plan for this crop year and those over the next five years,” Litterer added. “The expiration of the 2002 farm bill has been no secret and did not come by happenstance. Action needs to be taken now to ensure the farm bill is competed in a timely manner.”

NCGA is optimistic that this farm bill will include an improved risk management tool that will address the increasing levels of risk farmers are facing today and in the future. The House, Senate, and administration farm bill proposals all include revenue programs. Litterer said corn growers need a farm bill that delivers a more market-oriented safety net that ensures assistance when it is needed most.

NCGA Leaders Congratulate CEO Tolman on Agri-Marketing Award
Leaders of the National Corn Growers Association (NCGA) said they are delighted and proud at the National Agri-Marketing Association announcement that NCGA CEO Rick Tolman has been named Agribusiness Leader of the Year.

The award honors outstanding leaders in agribusiness, education, government service or other agribusiness related areas who exemplify excellence in agribusiness by their significant contributions to the industry.

“We congratulate Rick on this prestigious award,” said NCGA President Ron Litterer. “His commitment and dedication is apparent in the many accomplishments that benefit agriculture, especially in the areas of ethanol, trade, transportation, biotechnology, and farm policy.”

Noting Tolman’s efforts to dispel prevalent myths about corn ethanol, NCGA Chairman Ken McCauley said, “We couldn’t be more pleased. Rick is an outspoken champion for agriculture and this honor is well deserved.”

NCGA leaders and producers are at Commodity Classic, the combined tradeshow and convention of corn, soybean and wheat producers.  “We are celebrating one or most successful Commodity Classic events yet,” said Bob Dickey, NCGA first vice president.  “This is one more reason to celebrate.”

Tolman will receive the award April 17 at the 2008 Agri-Marketing Conference in Kansas City, Mo.

Commodity Classic Reaches Record-Breaking Numbers in Nashville, Tenn.
With 4,532 registrants and 145 members of the media in attendance and 847 tradeshow booths, Commodity Classic reached record-breaking numbers in Nashville, Tenn. last week.

“We were thrilled and overwhelmed with the record-breaking attendance. We never dreamed it would be so high,” said Commodity Classic co-chair and NCGA Corn Board member Theresa Schmalshof. “The location was convenient for Midwesterners and everyone seemed to enjoy themselves. This year’s numbers might be hard to beat, but we’ll certainly try to top them next year in Texas.”

Highlights of the event included addresses by Secretary of Agriculture Ed Schafer and political analyst Charlie Cook, an exclusive show at the Grand Ole Opry, a sold-out tradeshow, association meetings, banquets and receptions, and several other significant networking opportunities. Commodity Classic 2009 will be held Feb. 26-28 in Grapevine, Texas. Click here for more information. Photos from the 2008 Commodity Classic will be posted soon.

NCGA, BASF Recognize Scholarship Winners
Recipients of the National Corn Growers Association Academic Excellence in Agriculture Scholarship program, sponsored by BASF Corporation, were announced last week at the 2008 Commodity Classic in Nashville, Tenn.

“Given the high cost of a modern education, we believe that a scholarship program targeted to agriculture is one of the best ways to support future farmers, and we are happy to be able to help in this way,” Ken McCauley, NCGA Chairmen, said at the announcement.  “In this inaugural year of the program we generated a great deal of interest in the scholarship among our membership and at ag programs across the country.”

The five winners, culled from 80 applications received, are:

  • Jason Buss, Bowen, Ill., who is majoring in agricultural engineering at the University of Illinois
  • Lauren Schlosser, Chesterfield, Mo., who is majoring in animal sciences at the University of Missouri
  • James Seitzer, St. Peter, Minn., who is majoring in agricultural business management at the University of Minnesota
  • Catie Simpson, Ault, Colo., who is pursuing a Ph.D. in meat microbiology at Colorado State University
  • Joshua Yoder, Plain City, Ohio, who is majoring in agribusiness and applied economics at Ohio State University

“American farmers are making great strides in crop production and today’s students will have tremendous opportunities in their future careers to contribute to the production of food and energy for the world,” said Adam Burnhams, marketing manager for BASF’s U.S. Crop Protection division. “BASF is proud to help American farmers meet those needs.”

“I was extremely flattered and honored by the ag community when I heard I won the scholarship,” Simpson said. “As a graduate student, there aren't a lot of scholarships that I'm eligible for. This is near and dear to my heart to be recognized by BASF and NCGA with this scholarship.”

Application information for the 2009 program will be released in fall 2008.

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