In the News
Apr 10, 2020
Washington, D.C - Representative Collin Peterson, Chairman of the House Agriculture Committee, led fellow members of the Biofuels Caucus in urging Agriculture Secretary Sonny Perdue to direct funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support the biofuels industry. Biofuels plants across the nation have idled production as stay at home orders reduce demand for fuel and the profitability of biofuels production.
“Biofuels production is an important piece of the agriculture economy and I urge the Secretary to use the resources Congress appropriated to support this sector through the financial stress caused by COVID-19,” said Peterson. “The biofuels industry entered this crisis behind the curve following the last few years of disastrous management of the RFS program by the EPA. The biofuels industry is going to need significant support to weather this disaster.”
Dozens of biofuels plants across the country have idled some or all of their production since March 1st. Of the roughly 200 ethanol plants in the U.S., roughly 30 have shut down, and another 80 have reduced production by 50% or more. Biofuels plants consume millions of bushels of grain each year. They also produce low-cost livestock feed products (dried distillers grains) and are a major producer of CO2 gas used by hospitals and food processors.
Chairman Peterson is co-chair of the Congressional Biofuels Caucus, a bipartisan group of Members of Congress who advocate for homegrown renewable fuel policies that boost farmer incomes and reduce dependence on foreign oil. He is also the sponsor of the Renewable Fuel Standard Integrity Act of 2019, a bill which provides certainty to the biofuels industry by setting an annual deadline for small refinery exemption applications and bringing transparency to the process.
Full text of the letter can be found here.
Apr 7, 2020
A group of 15 senators sent a letter to Agriculture Secretary Sonny Perdue on April 6 urging the USDA to use funds allocated to the agency’s Commodity Credit Corp. by the CARES Act to provide financial assistance to the biofuel industry.
“We are concerned about our nation’s biofuel sector during the unprecedented economic circumstances brought on by the national pandemic of COVID-19,” the senators wrote.
The letter explains that that the pandemic has caused motor fuel use to rapidly decrease. “This dynamic comes on top of EPA’s failure to implement the RFS in accordance with the law, including the issuance of illegal small refinery waivers and the recent failure to enforce ethanol blending requirements,” the senators continued. “As the consumption of motor fuel continues to decrease in response to COVID-19, it is important to note that most U.S. gasoline contains at least 10 percent ethanol.”
“We are concerned for the many farmers and producers who will bear the impact of this decrease in consumption, further damaging an already hurting rural economy and resulting in the closing of production facilities that employ many people in rural communities in our home states,” the senators wrote.
Decreased fuel consumption has caused many biofuel plants to idle. The letter cites industry data that indicates more than 4 billion gallons of ethanol production has ceased production. “The CCC was created to stabilize, support and protect farm income and prices while also maintaining balanced and adequate supplies of agricultural commodities and aids in their orderly distribution,” the senators wrote.
“Farm income and prices for corn and other crop commodities are directly linked to the health of the renewable fuel industry,” they continued. “Ethanol plants use 40 percent of all corn grown in the United States. Among other feedstocks, biodiesel and renewable diesel producers currently use over 8 billion pounds of soybean oil a year, creating demand that adds 13 percent to the cash price of a bushel of soybeans. We have seen a significant drop in the price of corn and soybeans because of the decline in demand. Keeping plants open is vital for our states and we ask that you use the authority given by Congress to assist the biofuel industry during extremely difficult times. We are supportive of the proposals the biofuel industry has put forward to reimburse feedstocks and also believe that adding additional CCC funds to the Higher-Blends Infrastructure Incentive Program will drive future biofuel demand.”
The letter is signed by Sens. Chuck Grassley, R-Iowa; Tammy Duckworth, D-Ill,; Joni Ernst, R-Iowa; Tammy Baldwin, D-Wisc.; Deb Fischer, R-Neb.; Amy Klobuchar, D-Minn.; Roy Blunt, R-Mo.; Richard J. Durbin, D-Ill.; M. Michael Rounds, R-S.D.; Tina Smith, D-Minn.; Josh Hawley, R-Mo.; Sherrod Brown, D-Ohio; Ben Sasse, R-Neb.; Jerry Moran, R-Kan.; and John Thune, R-S.D.
Representatives of the biofuels industry have spoken out to applaud the senators for sending the letter.
“Once again, renewable fuel champions in the Senate are working tirelessly to stand up for an industry that is vitally important to rural America,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. “We thank them for recognizing the unprecedented challenges facing ethanol producers today and seeking solutions to help our industry weather this storm. Ethanol prices have plunged to record lows, stocks are at all-time highs, and plants throughout the Heartland are shutting down. As ethanol serves as the largest market for U.S. corn growers, the well-being of the ethanol industry is directly linked to farm income and the livelihood of farm families across the nation. We agree with the senators that providing assistance to the renewable fuels industry would be an appropriate and timely use of emergency relief funding appropriated to USDA.”
Cooper noted that, as of April 6, 41 ethanol plants with an annual production capacity of 3.2 billion gallons have been fully idled, while 66 plants have reduced their output rates by a collective 1.8 billion gallons. Another 13 plants with 800 million gallons of capacity were closed or idled due to other factors prior to the onset of the COVID-19 pandemic. Overall, he said, a total of about 5.8 billion gallons of capacity is idle today, representing more than a third of the industry’s total production capacity. On an annualized basis, this would represent a potential lost demand for 1.7 billion bushels of corn.
“We applaud our Senate champions for their ongoing efforts to protect rural communities, where farmers and biofuel producers have been stretched beyond the breaking point,” said Emily Skor, CEO of Growth Energy. “The plunge in biofuel demand sparked by COVID-19 has generated a perfect storm, adding to the burdens created by a foreign price war over oil, continued trade barriers, and regulatory uncertainty here at home. Nearly half the industry may be offline within weeks, and without swift and decisive action in Washington, many more may soon halt grain purchases or close their doors completely. The USDA should act quickly to implement the urgent call from lawmakers and safeguard farm and biofuel jobs.”
A full copy of the letter can be downloaded from Grassley’s website.
Read the original story here.
Apr 2, 2020
The U.S. exported 194.16 million gallons of ethanol and 852,904 tons of distillers grains in February, according to data released by the USDA Foreign Agricultural Service on April 2. Exports of both products were up when compared to February 2019.
The 194.16 million gallons of U.S. ethanol exported in February was up significantly from both the 151.23 million gallon exported the previous month and the 113.82 million gallons exported during the same month of the previous year.
The U.S. exported ethanol to approximately three dozen countries in February. Brazil remained the top importer of U.S. ethanol with 56.1 million gallons, followed by India with 47.6 million gallons and Canada with 29.44 million gallons.
The value of U.S. ethanol exports reached $323 million in February, up from $256.53 million in January and $186.78 million in January 2019.
Total ethanol exports for the first two months of the year reached 345.4 million gallons at a value of $579.53 million, compared to 241.73 million gallons at a value of $377.82 million for the same period of last year.
The 852,904 tons of distillers grains exported in February was down from the 976,688 tons exported in January, but up from the 686,005 tons exported in February of the previous year.
The U.S. exported distillers grains to nearly three dozen countries in February. Mexico was the top destination for U.S. distillers grains exports with 165,609 tons, followed by South Korea with 127,776 tons and Indonesia with 102,117 tons.
The value of U.S. distillers grains was at $178.24 million in February, down from $199.48 million the previous month, but up from $143.11 million in February 2019.
The U.S. exported a total of 1.83 million tons of distillers grains during the first two months of this year at a value of $377.72 million, compared to 1.49 million tons at a value of $315.48 during the same period of 2019.
Additional data is available on the USDA FAS website.
Read the original story here.
April 1, 2020
The Food and Drug Administration (FDA) is allowing previously unapproved ethanol producers to make industrial-use product for hand sanitizer, which is in high demand amid the spread of coronavirus.
The agency released guidance and standards to produce ethanol that is to be used as an "active pharmaceutical ingredient" (API) because of inquiries from ethanol producers that are not approved to produce API grade alcohol despite possessing the capability to do so.
The FDA will not prevent or punish previously unapproved ethanol plants from producing API grade alcohol so long as it is no less than 94.9pc ethanol by volume. The ethanol must also be denatured by the producer or by the time it is an ingredient of a finished hand sanitizer product.
Production reallocated to making sanitizer products is not expected to provide notable increases to overall ethanol demand, according to the Renewable Fuels Association (RFA).
"The volume of ethanol that is being supplied for hand sanitizer and similar products is small overall, especially relative to fuel use of ethanol, so we do not expect it to be a major driver of ethanol demand in the months ahead," said RFA chief executive Geoff Cooper.
Some plants have already pivoted to producing hand sanitizer. In his 27 March earnings call, Pacific Ethanol chief executive Neil Khoeler reported that the company's sale of industrial-use ethanol had doubled (http://direct.argusmedia.com/newsandanalysis/article/2091456) to fight the spread of coronavirus.
Parties looking to produce API grade alcohol must register their facility online with the FDA but will be automatically approved to begin production.
Read the original story here: FDA Allowing More Ethanol Plants To Make Sanitizer
Mar 31, 2020
The USDA expects U.S. farmers to plant 97 million acres of corn in 2020, up 8 percent or 7.29 million acres from 2019. Compared with 2019, planted acreage for corn is expected to be up or unchanged in 38 of the 48 estimating states, according to data released in the agency’s Prospective Plantings report, released March 31.
Farmers in Iowa, Illinois, Nebraska, Minnesota and Kansas are expected to lead the nation when it comes to planted corn acres. Approximately 14.1 million acres of corn are expected to be planted in Iowa, up from 13.5 million in 2019. Corn acres in Illinois are expected to reach 11.3 million, up from 10.5 million last year. In Nebraska, farmers are expected to plant 10.5 million acres of corn, up from 10.1 million in 2019, while corn acres in Kansas are expected to fall to 6.3 million, down from 6.4 million last year.
The report projects that corn acreage will grow most significantly in South Dakota, where farmers are expected to plant 6 million acres of corn this year, up from 4.35 million acres in 2019. If realized, 2020 corn acreage in the state will be at 138 percent of 2019 levels.
A full copy of the report can be downloaded from the USDA website.
Read the original story here.
Mar 25, 2020
Chippewa Valley Ethanol at least has some consolation during grim times for the biofuel industry. The west-central Minnesota company also churns out industrial alcohol, a key ingredient in hand sanitizer.
“It’s nice to have a little product diversity,” said Chad Friese, Chippewa Valley’s CEO. “In a market like this, it makes a difference.
Much of the ethanol industry has been floundering in red ink for the last year, hurt by a glut of supply and declining demand due to trade restrictions and a flood of federal exemptions on ethanol use by smaller oil refineries.
Now, with much of the country’s economy shut down, demand for transportation fuel has nose-dived and so have ethanol prices. However, during the COVID-19 outbreak, the need for sanitizers — and the industrial alcohol that goes in it — has spiked, helping some U.S. ethanol producers, including one in Minnesota.
“I haven’t seen ethanol prices this low since the mid-1990s,” said Brian Kletscher, CEO of Highwater Ethanol and current board president of the Minnesota Bio-Fuels Association, a trade group.
None of Minnesota’s 17 operating ethanol plants have temporarily shut down due to the current crisis. But like their peers across the Midwest’s ethanol belt, they are contemplating cutting biofuel production if they haven’t already.
Highwater Ethanol in the southwestern Minnesota town of Lamberton cut output by 20% on March 19, Kletscher said.
He said he has heard “rumblings” of other Minnesota ethanol plants doing the same. Throughout the country, the ethanol industry is trimming production by 20%, he said. Indeed, output will have to be curtailed if the ethanol storage system — tanks, even rail cars — fills up.
Minnesota is the nation’s fourth-largest ethanol producer and hosts 17 operating biofuels plants. The ethanol sector is an important part of the state’s agricultural economy.
Under the U.S. Renewable Fuel Standard, most fuel sold as gasoline is required to include 10% ethanol. President Donald Trump’s administration has increased the number of ethanol hardship waivers for smaller refineries, incensing biofuel makers that say it cuts demand for their product.
Now, with COVID-19 paralyzing much of the economy, demand for transportation fuel has been whacked.
“I think we will see demand destruction of 25 to 30 percent, or even up to 40 percent over the next month due to COVID-19,” Kletscher said. New York and California, two states that have been virtually shut down by their governors, are two of the nation’s biggest fuel markets, he added.
The duration of the public safety lockdowns, of course, will likely determine the depth of the ethanol industry’s troubles.
“When we get through this, people will be antsy to get out,” Kletscher said. “We are getting close to the driving season, too, and that will also increase demand.”
Chippewa Valley Ethanol in Benson is getting pummeled by declining fuel demand, too, but unlike other biofuel plants in Minnesota it produces industrial alcohol. Normally a staid, niche market, industrial alcohol demand is hot.
“We have been in this market for many years, and have just seen some large growth,” said Chippewa CEO Chad Friese. “We have a strong customer base in the sanitizer market.”
Normally, industrial alcohol accounts for about 15% of Chippewa Valley’s production, with ethanol making up the rest, Friese said. But with the COVID-19 crisis, that percentage has risen to 20% and even as high as 22%.
Making industrial alcohol from ethanol requires a further step in distillation. It also requires permits from the U.S. Food and Drug Administration and the federal Alcohol and Tobacco Tax and Trade Bureau. Chippewa Valley, a longtime producer, has both.
If the ethanol demand slump is prolonged, other ethanol makers may also seek such licenses and rejigger their production setup to produce industrial alcohol, Kletscher said.
Read the original story here.
Mar 25, 2020
Time has run out for the U.S. Environmental Protection Agency to challenge a federal court ruling that would limit the agency’s use of waivers exempting small oil refineries from the country’s biofuels regulations.
The EPA had until the end of March 24 to file a challenge, but by early March 25, no such filing had been entered, according to a Reuters review of the case docket though the U.S. government’s electronic public access service for court records.
A decision by the administration of President Donald Trump not to appeal the ruling would mark a big win for the U.S. corn lobby and a blow to the oil industry.
Oil refiners say the waivers have been crucial to keeping small refineries in business, but the agriculture industry believes they have been over used and have cut into demand for corn-based ethanol.
Under the U.S. Renewable Fuel Standard, refiners are required to blend billions of gallons of ethanol into their gasoline every year, a boon for corn farmers. But the EPA can give out waivers to small facilities that prove that compliance would put them in financial straits.
The waiver program was cast into question in January after the 10th Circuit Court of Appeals ruled that the Trump administration had been too free with the waivers and set a standard for the exemptions that would greatly reduce the numbers of waivers the EPA can give out in the future.
The EPA has been considering its response since.
EPA and White House officials did not comment on the issue on Wednesday.
Sources told Reuters earlier this month that the Trump administration was likely to adhere to the ruling and apply it nationally.
The agency, meanwhile, was discussing the possibility of other measures to ease the financial burden on refiners, including instituting a cap or other restrictions on the price of biofuel blending credits that they must acquire to show compliance with the RFS, the sources said.
Read the original story here.
Klobuchar, Smith Help Make Bipartisan Push Urging President Trump to Support Renewable Fuel Standard
Mar 20, 2020
United States Senator Amy Klobuchar
WASHINGTON - U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) joined a bipartisan effort with 14 of their Senate colleagues urging President Trump to support the Renewable Fuel Standard (RFS) as coronavirus pushes ethanol prices to record lows. Their request comes following news that the U.S. Environmental Protection Agency (EPA) may appeal a recent unanimous decision by the U.S. Court of Appeals concerning small refinery exemptions.
With the drop in oil prices related to coronavirus and the pandemic’s projected decrease in gasoline consumption, some experts are projecting a reduction in corn used for ethanol production of 120 to 170 million bushels.
The Tenth Circuit ruling found that the EPA had abused the use of small refinery hardship waivers under the RFS, eliminating demand for billions of gallons of demand for renewable fuels and hurting rural communities, farmers, clean energy producers, and agribusinesses.
“The RFS has been a critical economic driver for rural America and the agricultural industry in each of our states. Farm country has taken successive blows from low commodity prices, trade disruptions, inclement weather, and continued uncertainty over the RFS,” the Senators wrote. “Now, with the global economy bracing for the full consequences of the coronavirus, upholding this court decision is a small step that will have a resounding benefit for farmers and ethanol stakeholders who are on the ropes.”
For years, Klobuchar has been a leader in the fight to strengthen the RFS to support American jobs and decrease dependence on foreign oil. Klobuchar has led several letters urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses and rural communities. In December 2019, Klobuchar In November 2019, Klobuchar led a public comment letter to Environmental Protection Agency (EPA) Administrator Andrew Wheeler expressing concern over the proposed supplemental rule establishing the Renewable Fuel Standard’s (RFS) 2020 Renewable Volume Obligations and 2021 Biomass-Based Diesel Volumes. In October 2019, Klobuchar sent a letter to U.S. Department of Agriculture Secretary Sonny Perdue asking the agency to document the impact of small refinery waivers on farm income, commodity prices, and renewable fuel usage. Klobuchar has also led a bipartisan push for the EPA to allow for the year-round sale of E15, including letters to the Administration urging them to expand waivers for the sale of E15 in the summer months. Klobuchar is an original cosponsor of the bipartisan Consumer and Fuel Retailer Choice Act, which would amend the Clean Air Act to allow for the year-round sale of E15.
Smith has long fought for a strong RFS. In October 2019, Smith pressed U.S. Deputy Secretary of Agriculture Stephen Censky about the Administration’s policy on the amount of corn-based ethanol and other renewable fuels blended into the nation’s gasoline supply at a Senate Agriculture Committee hearing. Smith has also pressed EPA Administrator Andrew Wheeler to take action, pointing out that the granting of waivers had increased by 370 percent since 2016, with “small refinery” waivers going to large oil companies under the Trump Administration.
Read the letter here.
More...
Mar 19, 2020
The U.S. ethanol industry is struggling with demand destruction resulting from COVID-19, an oil price war, ongoing trade disputes, and small refinery exemptions (SREs). “Folks, this is not going to be good, and our biggest concern by far is our people,” said Randy Doyal, CEO of Al-Corn Clean Fuel, during a media call hosted by the Renewable Fuels Association on March 19.
Geoff Cooper, president and CEO of the RFA, opened the call by stressing the ethanol indsutry is facing unprecedented economic hardship. “We were already experiencing demand destruction and challenging economics before the coronavirus began to roil energy markets,” he said.
Cooper explained that demand for motor fuel is plummeting and most analysts today are expecting about a 20-25 percent drop in consumption over the near-term. “We’ve seen ethanol prices fall to record lows,” Cooper said, adding that April ethanol futures closed at 95 cents per gallon on March 18. Ethanol producer margins have also fallen and are have been in deep negative territory for the past several days. “These are some of the worst margins that we’ve seen in the industry’s history,” Cooper said.
COVID-19, the oil price war between OPEC and Russia, trade disputes with China and other markets and SREs are factors that have conspired to create not just the perfect storm for ethanol, but the perfect tsunami, Cooper added. Over the past week many ethanol plants have significantly reduced output and some have idled, he said. “We expect to see substantial reductions in ethanol production in the weeks ahead as producers contend with lower demand, record low prices and negative margins,” Cooper added.
Scott Richman, chief economist at the RFA, said average spot margins are at roughly negative 25 cents per gallon at yesterday’s prices. “That’s very far in the red,” he said, noting that some plants are slowing production, others are idling and some have stopped buying corn.
“Our absolute first concern in this is our people,” said Jeanne McCaherty, CEO of Guardian Energy Management, a company that manages operations at three ethanol plants. She said her company is working hard to follow Center for Disease Control recommendations, including social distancing, enabling employees to work remotely where possible and ensuring proper cleaning and hygiene.
“The second concern is job security,” McCaherty said. “Our people are sacred to us…We are concerned about them,” she added, noting that ethanol plants and their workers are integral parts of local rural economies.
Demand destruction the industry is facing is devastating, she said. Ethanol plants are also worried about physical logistics problems. Ethanol plants and their customers have limited amounts of storage space, she said. Some plants may need to shut down simply because of physical restrictions related to storage.
Doyal noted the ethanol indsutry was negatively impacted during the financial collapse of 2008, but said the impact from that event was relatively short. “This one, I think, we will feel for much longer,” he said. “Folks, this is not going to be good, and our biggest concern by far is our people. This is going to directly impact our folks, and we’re doing everything we can to mitigate that,” he said, whether that impact comes from risk of exposure to the virus or trying to keep plants open and operating so that workers can stay employed.
Chad Friese, general manager of Chippewa Valley Ethanol Co., discussed the unique position his company is in as a producer of not just fuel ethanol, but also pharmaceutical grade ethanol that can be used to produce hand sanitizer and other cleaning products. Currently, the company is trying to shift its focus to producing as much alcohol as possible for the hand sanitizer market. While the vast majority of fuel ethanol plants aren’t designed to produce pharmaceutical-grade ethanol, Freise said Chippewa Valley Ethanol has had the capability to serve that market for nearly 20 years, since 2001. It’s a big shift at the plant level to make that change, he said. Fuel ethanol production, however, is the first step in the plant’s process to produce pharmaceutical-grade alcohol.
Friese said his company is concerned over logistical problems impacting their ability to produce the alcohol needed for hand sanitizers, specifically whether the plant will have access to the rail cars and trucks it needs to move products. “We need those logistical channels to stay open,” he said. Friese also expressed concern over how plant operations could be impacted if a member of his staff becomes infected with COVID-19. “These are highly specialized jobs,” he said.
Cooper described several actions needed to keep ethanol plants operational. To help the ethanol indsutry survive the current disastrous market conditions, Cooper said the RFA is calling on Congress and the Trump administration to take immediate action to prevent a potential collapse of the industry. The top priority, he said, is to retain the industry’s highly-skilled workforce and save jobs. “The ethanol industry’s most valuable asset is its workforce,” Cooper said. Every effort should be taken to retain these jobs, especially given the likelihood that many plants will be forced to temporarily idle production and suspend sales of ethanol and coproducts.”
Beyond that, Cooper said the RFA is asking the administration to immediately announce that it will not appeal the Tenth Circuit Court decision that struck down three SREs approved by the U.S. EPA and announce it will apply the court’s decision nationwide. “This would send positive market signals that RFS demand will not be undermined by further small refinery exemptions,” he said. “That’s a signal our industry desperately needs today.” In addition, Cooper said the EPA should also announce it will immediately add 500 million gallons to the 2020 Renewable Fuel Standard requirements as ordered by the D.C. Circuit Court in 2017, and should announce it will not approve any pending SREs that do not meet the criteria of the Tenth Circuit Court.
“We are also joining many other businesses and industry groups in calling for more general forms of relief for our industry,” Cooper added, noting that the RFA joined with 96 other groups on a letter to President Trump and Congressional leaders this week calling for action to ensure continued access to credit for member companies and small businesses. The letter also advocated for some tax relief measures.
Cooper said the RFA expects fairness and equity in how assistance is being provided to various energy industries. Trump has already directed the U.S. Department of Energy to purchase millions of barrels of crude oil for the strategic petroleum reserve, he said, and noted other relief measures are also in the works for U.S. oil producers. “We’re simply calling on the government to ensure that all fuel producers receive equitable support during this period of marketplace uncertainty and unrest,” he said.
“I am incredibly proud of the men and women of the ethanol indsutry for their tenacity, resolve and compassion during this very difficult time,” Cooper added. “Not only are we continuing to deliver cleaner fuels to the market during this national emergency, but our indsutry is also part of the solution for mitigating the spread of the virus and protecting American families.”
Read the original story here.
Mar 17, 2020
Chicken and eggs are a diet staple in Indonesia—the world’s fourth most populous country spread over more than 17,000 islands. Covering the largest island country is no small feat, but the U.S. Grains Council has expanded tried-and-true promotion programs for U.S. dried distillers grains with solubles (DDGS) and corn gluten meal (CGM) to capture more of the growing feed demand throughout Indonesia.
“Our job is to go find new demand, so that is what we did,” said Caleb Wurth, USGC assistant director for Southeast Asia. “In this case, we discovered significant pockets of layer production that had not considered DDGS before.”
The Council has a long history operating in West Java—servicing and developing the region since the 1990s. After years of engagement, this region is dominated by regional integrators—housing 876 million broilers and 32 million layers—who consistently use DDGS and CGM in their feed rations. This concentrated programming effort helped lead to Indonesia’s importation of nearly 974,000 metric tons of U.S. DDGS in the 2018/2019 marketing year—up substantially from nearly 517,000 tons in 2016/2017.
To expand on this success, the Council began to focus efforts outside of West Java, setting sights on the 47 million layers nestled around the locals of Blitar, Kediri, Surabaya, Maland and Jember in East Sumatra as well as the outlying islands of Sumatra and Sulawesi. In these remote markets, the practice of on-farm mixing is still quite prevalent. Within these self-mixing systems, owners formulate their own ration, supplementing concentrates from a local feed mill—often utilizing a simple mixture of local corn and rice bran. While the nutrition delivery mechanisms can be quite crude, the farm sizes in these locations can still range from 10,000 to 1 million birds.
Mimicking programs executed in other parts of Southeast Asia, Budi Tangendjaja, a long-time USGC consultant, conducted multiple feed formulation trainings across Indonesia. One such training brought together a USGC-member commercial team and a group of layer farm owners representing a local farmers’ association (PPN) in Padang, Indonesia, for a two-day feed formulation training seminar. The group learned how to maximize use of DDGS and CGM using least-cost feed formulation software. The Council made efforts to integrate the younger generation into the programming as well, recognizing the need to exhibit the benefits of DDGS usage to the emerging leaders of the community.
The feed formulation seminars demonstrated DDGS could reduce overall feed costs, and CGM could be beneficial for the early laying period of production. Immediate results of this seminar series included participants reporting increasing DDGS inclusion levels from 15 percent to 20 percent and others beginning first-time DDGS feeding trials at 4 percent and 5 percent inclusion, respectively.
The Council is continually evaluating new areas of market demand within new and existing customers to further promote the use of U.S. coarse grains and co-products like DDGS and CGM. Doing so is especially important as larger trade discussions continue between markets like Indonesia and the United States.
“Discernible headwinds face global trade in the first part of 2020,” Wurth said. “It is important we continue to look for demand outside of the box.”
Read the original story here.
Mar 12, 2020
The U.S. Energy Information Administration slightly increased its forecast for 2020 ethanol production in its latest Short-Term Energy Outlook, released March 11. The 2021 forecast, however, was unchanged.
The EIA currently predicts ethanol production will average 1.04 million barrels per day this year, up from its forecast of 1.03 million barrels per year made in the February STEO. The forecast for 2021 ethanol production was maintained at 1.03 million barrels per day.
On a quarterly basis, the EIA predicts ethanol production will average 1.03 million barrels per day during the first quarter of this year, increase to 1.04 million barrels per day in the second quarter, fall to 1.02 million barrels per day in the third quarter, and return to 1.03 million barrels per day in the fourth quarter. For 2021, ethanol production is expected to average 1.02 million barrels per day in the first quarter, increasing to 1.03 million barrels per day in the second and third quarters, and increasing again to 1.04 million barrels per day in the final quarter of the year.
Ethanol consumption is currently expected to average 950,000 barrels per day this year, flat with 2019. In 2021, ethanol consumption is expected to fall to an average of 940,000 barrels per day.
The EIA’s most recent weekly data shows ethanol production averaged 1.044 million barrels per day the week ending March 6, down from 1.079 million barrels per day the previous week. Weekly ethanol ending stocks fell to 24.334 million barrels the week ending March 6, down from a record high of 24.964 million barrels the previous week.
The agency’s most recent monthly data shows the U.S. imported 269,000 barrels of ethanol in December, all from Brazil. During the same month, the U.S. exported 3.49 million barrels of ethanol, primarily to Canada, Brazil, and India.
Read the original story here.
Mar 10, 2020
The U.S. exported 151.23 million gallons of ethanol and 976,688 metric tons of distillers grains in January, according to data released by the USDA Foreign Agricultural Service on March 6. Exports of both products were up from the previous month and January 2019.
The 151.23 million gallons of ethanol exported in January was up from both the 127.91 million gallons exported in January 2019 and 146.53 million gallons exported in December 2019.
The U.S. exported ethanol to approximately three dozen countries in January. Brazil was the top destination with 58.19 million gallons, followed by Canada at 24.79 million gallons, and India at 13.31 million gallons.
The value of U.S. ethanol exports was $256.53 million in January, up from $190.04 million in January 2019, but down from $263.23 million in December 2019.
The 976,688 tons of distillers grains exported in January was up from both the 806,615 million tons exported during the same month of 2019 and the 767,682 million tons exported in December 2019.
The U.S. exported distillers grains to approximately 36 countries in January. Mexico was the top destination with 169,854 tons, followed by South Korea at 129,058 tons and Indonesia at 115,632 tons.
The value of U.S. distillers grains exports reached $199.48 million in January, up from $155.07 million in December 2019 and $172.38 million in January 2019.
Additional data is available on the USDA FAS website.
Read the original story here.
Mar 9, 2020
Some ethanol producers worldwide said demand is up for their products due to customers stockpiling hand sanitizer - which can be made using the biofuel - as the coronavirus outbreak worsens.
The coronavirus has infected more than 110,000 people in 105 countries and territories and 3,800 have died, according to a Reuters tally. Governments and health agencies have advised people to wash their hands and use hand sanitizer to curb the virus’s spread, prompting an increase in demand for ethanol, also known as ethyl alcohol, industrial alcohol and denatured alcohol, used to make many hand sanitizers.
Minneapolis-based Cargill, which produces and commercializes ethanol, said on Monday that demand for its denatured ethanol in Europe has doubled since last month.
Tereos, one of the largest producers of bioethanol alcohol in the European Union and headquartered in northern France, said it also saw a spike in demand and had a special order for 20,000 hectoliters (528,000 gallons) of additional denatured alcohol in the past days.
The company is unblocking some of its stocks and making these requests a priority, a company spokesperson said in an email.
Meanwhile, Sacramento-based producer Pacific Ethanol confirmed that industrial alcohol sales are rising, said Paul Koehler, vice president of commodities and corporate development.
Read the original story here.
Brownfield Ag News for America
Mar 3, 2020
Ag Secretary Sonny Perdue spoke with reporters Monday at the National Farmers Union meeting in Savannah, Georgia.
At last week’s Commodity Classic, Ag Secretary Sonny Perdue said he believes small refinery exemptions (SREs) will be reduced in response to a recent Tenth Circuit Court ruling that EPA overstepped its SRE granting authority.
But what if EPA decides to appeal the court’s decision? Speaking with reporters at the National Farmers Union annual meeting in Savannah, Georgia, Perdue said that appears doubtful.
“Our legal counsel indicates that he does not think it would be wise to appeal that decision. He thinks it’s pretty solid,” Perdue said.
If EPA doesn’t appeal, the next question is whether the agency will apply the ruling nationwide or confine it to the area covered by the Tenth Circuit, which includes the six states of Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah.
Perdue thinks it should be applied nationwide.
“We think it’s probably applicable nationwide when look at the principle of small refinery waivers—that the decision should go nationwide.”
Perdue made those comments Monday during a news conference at the NFU annual meeting.
Read the original story here.
(Washington, D.C., February 28, 2020) – U.S. Secretary of Agriculture Sonny Perdue issued a memo today directing the U.S. Department of Agriculture (USDA) to acquire alternative fueled vehicles (AFV) when replacing conventionally fueled vehicles. USDA owns and operates one of the largest civilian fleets in the Federal Government and this move to a fleet that can use E85 or biodiesel will increase efficiencies and performance. Additionally, as part of the President Donald J. Trump’s October agreement to seek opportunities to facilitate the availability of higher biofuel blends across the country, USDA will make $100 million in grants available this year for the newly created Higher Blends Infrastructure Incentive Program (HBIIP). Through this program, transportation fueling and biodiesel distribution facilities will be able to apply for grants to help install, retrofit, and/or upgrade fuel storage, dispenser pumps, related equipment and infrastructure to be able to sell ethanol and biodiesel. The Department plans to publish application deadlines and other program information in the Federal Register this spring.
“Both of these actions underscore USDA is putting our money where our mouth is when it comes to increased biofuels usage. Expanding nationwide infrastructure that offers biofuels and increasing the number of biofuel capable vehicles in our fleet will increase the use of environmentally friendly fuel with decreased emissions, driving demand for our farmers and improving the air we breathe,” Secretary Perdue said. “President Trump is fighting for our corn and soybean growers and biofuel producers by finalizing year-round E15, ensuring that more than 15 billion gallons of ethanol and 2.43 billion gallons of biodiesel enters the market in 2020, and opening up new markets abroad. USDA will continue to do its part to encourage the use of homegrown energy.”
Background on Higher Blends Infrastructure Incentive Program (HBIIP):
HBIIP will consist of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels. Funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment, and infrastructure. Cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as “E15” and “B20” (or higher), at vehicle fueling locations, including, but not limited to, local fueling stations, convenience stores (CS), hypermarket fueling stations (HFS), and/or fleet facilities, as well as fuel terminals for biodiesel. Prospective participants and stakeholders should expect additional specific program information and requirements to be published by mid-spring which will clarify the application process, eligibility, and how applications for grant funding will be scored.
Background on USDA Fleet:
USDA owns and operates one of the largest civilian fleets in the Federal Government. USDA is moving to acquire E85- or biodiesel-capable vehicles that meet USDA mission requirements instead of those that take conventional gasoline. This will occur over time during the normal fleet renewal process. USDA currently has 37,000 vehicles and replaces approximately 3,000 every year. Secretary Perdue directed USDA to:
- Acquire E85 or biodiesel-capable vehicles that meet USDA mission requirements;
- Use station locator websites and applications to fuel with E15, E85, and biodiesel where available;
- Prioritize the purchase of E15 for gasoline vehicles without E85 capability and the purchase of renewable diesel blends for diesel vehicles without B20 capability; and
- For USDA locations that have in-house refueling pumps, coordinate with fuel vendors to acquire and provide biofuel blends, including E15, E85, B20 and higher biodiesel blends, and renewable diesel blends.
These actions have the potential to increase USDA’s annual consumption of E15 by up to 9 million gallons, E85 by 10 million gallons, and biodiesel and renewable diesel blends by up to 3 million gallons. As availability of E15, E85, and biodiesel expands through the nation, USDA has the opportunity to reach these goals and have a significant impact. Where biofuels are available, the USDA fleet is directed to use biofuels.
Read the original press release here.
Feb 27, 2020
The USDA is scheduled to publish a notice in the Federal Register on Feb. 28 announcing a notice of funding availability (NOFA) of up to $100 million in competitive grants under the Higher Blends Infrastructure Incentive Program.
A prepublication version of the notice indicates the grant funding will be made available to eligible entities to support activities designed to expand the sales and use of renewable fuels under the HBIIP. The notice aims to alert prospective participants and stakeholders of the intention of the Commodity Credit Corp. and Rural Business Cooperative Service to jointly publish a NOFA by mid-spring. That NOFA will provide specific program information and requirements.
The notice explains that HBIIP is intended to encourage a more comprehensive approach to marketing higher blend levels of ethanol and biodiesel by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment and infrastructure.
According to the USDA, cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as E15 and B20 at vehicle fueling locations. This includes local fueling stations, convenience stores, hypermarket fueling stations, and/or fleet facilities.
A full copy of the notice is available on the USDA website.