Wednesday December 5 Ag News

UNL Scientist Cites Managing Risks in New Keystone XL Pipeline Route

            Potential groundwater contamination risks posed by the Keystone XL pipeline in Nebraska are minimal and manageable under a "risk-managed" route proposed by a University of Nebraska-Lincoln water scientist.

            Roy Spalding, hydrochemist and water quality expert, and Aaron Hirsh, graduate student, outlined the findings in a journal article about risk-managed approaches to routing petroleum pipelines. The article is in the Dec. 4 issue of Environmental Science and Technology, a long-standing and highly regarded journal published by the American Chemical Society, based in Washington, D.C.

            The risk-managed route the authors propose for the Keystone XL pipeline in Nebraska "avoids the sensitive, highly vulnerable, agriculturally undeveloped land that elicited strong condemnation of the since-rejected original Keystone XL route," Spalding said.

            Their proposed southeasterly route through Holt, Antelope and Pierce counties, to the existing north-south Keystone 1 pipeline, avoids the Ogallala aquifer beneath the fragile and pristine Sandhills, sub-irrigated meadows and areas with very shallow water tables. The risk-managed route through these three counties is through overlying row-cropped land underlain by already contaminated Ogallala groundwater to the Keystone 1 corridor.

            The north-south segment paralleling the Keystone corridor to Steele City avoids the Ogallala aquifer.

            The proposed risk-managed pipeline route, in the Holt, Antelope and Pierce county areas, is essentially the same length as the recently proposed KXL route under consideration but runs slightly south of it and avoids shallow groundwater. Once east of Pierce County, the risk-managed route drops almost due south, parelleling the Keystone One mainline pipeline.

            Spalding, of UNL's agronomy and horticulture department, and Hirsh, from the civil engineering department, point out that in Nebraska, where 85 percent of the population uses groundwater for its drinking water source, "threats to water quality are taken quite seriously" and that the routing of petroleum pipelines could be "made much more acceptable by adopting risk-managed routes that lessen the potential to adversely impact high-quality groundwater and, should a release occur, decrease the longevity and potential detrimental effects of hazardous groundwater contaminants."

            The article goes on to note that while pipeline spills have been dramatically reduced over the last 10 years, averaging fewer than one per 1,000 miles of pipeline over that period, "releases of hazardous petroleum chemicals to groundwater do occur and some should be expected."

            The potential risk of releases from the Keystone XL pipeline, or from any pipeline used to transport tar-sands oil, may increase from liquefying the asphalt-like tar sands with refinery condensate or naptha to form a more readily flowing mix of oil and diluents known in the oil industry as "dilbit."

            Little is known about the potential movement of dilbit to groundwater at release sites, the authors wrote. There are so many variables including the chemical composition of the dilbit, ambient temperature, depth to groundwater, emergency cleanup practices and other factors, that predicting the exact mechanism of contaminant movement to the aquifer is complicated, Spalding and Hirsh's article reports.

            One of the best ways to minimize risks from a potential spill is to carefully select a pipeline route with minimal environmental risk and reasonable length, which the researchers have done with their newly proposed pipeline route.

            The southeasterly course through intensely spray-irrigated, row-cropped land underlain by contaminated groundwater in Holt, Antelope and Pierce counties is "an opportunistic use of impaired groundwater and existing irrigation practices to remediate volatile petroleum contaminants and groundwater should a spill occur."

            Their proposed route also avoids high quality Ogallala aquifer groundwater, as well as bottomland, high water table land and major river crossings, the authors say.

            "Most importantly, the risk-managed approach is founded on the paradigm that siting the pipeline through an intensively spray-irrigated area overlain by a contaminated aquifer provides (for) both in place and off site remediation (of a spill). Thus, routing through areas of intense spray irrigation (center pivots) is by design."

            Earlier research by Spalding has proven that many volatile hazardous compounds found in petroleum products, such as the benzene present in dilbit, can be stripped from the contaminated water by spraying it through a center pivot, where the compounds can then dissipate harmlessly as a gas into the atmosphere, making groundwater irrigation by center pivot along the proposed pipeline route a potential plus.

            "Groundwater capture zones" created by wells pumping water to center pivots would also help contain and remove dissolved contaminants, Spalding said.      

            The majority of underlying groundwater in or near the proposed Keystone XL pipeline route is heavily laced with nitrate and sulfate contamination from fertilizer and soil amendments that have leached into the groundwater from the intensively farmed area, a not uncommon occurrence where crops are extensively irrigated.

            This nitrate contamination stretches for over 100 miles and over 1 million acres are underlain by non-potable high nitrate Ogallala groundwater. Leached soil amendments enhance the degradation of hazardous petroleum compounds in groundwater, which is another plus to the article's proposed route if a release should occur, the authors say.

            "Most agriculturally based states have extensive areas with groundwater nitrate contamination similar to that in the three-county focus area (of the proposed pipeline). Where appropriate, these contaminated areas deserve consideration in siting future routes for conveying liquid fuels," Spalding and Hirsh said. 

            The Keystone XL pipeline is awaiting U.S. State Department action on an international permit to build the pipeline.



Delegates Urge Prompt Action on Farm Bill, Extension of 2012 Tax Provisions

Delegates to Nebraska Farm Bureau Federation's 95th Annual meeting are urging Congress and the president to take action before year-end to pass a farm bill and extend a number of tax provisions that are vital to the future success of American agriculture. The action came in the form of a special resolution adopted by the House of Delegates. "Nebraska farm and ranch families are facing considerable uncertainty in both our nation's farm and tax policy. We need swift action in Washington to bring certainty in these areas," said Steve Nelson, Nebraska Farm Bureau president. 

The passage of an agricultural safety net via the 2012 farm bill is important to both Nebraska and American agriculture. The exceptional drought experienced across Nebraska and much of the country highlights the continued need for federal crop insurance, livestock disaster programs, as well as other important farm bill programs. "With expiration of the 2008 Farm Bill having already occurred over a month ago, the lame-duck session of Congress provides the last opportunity to move forward with the farm bill yet this year," said Nelson.

Over 100 different tax provisions are set to expire at the end of 2012 including the current estate tax rate of 35 percent with an exemption of $5.1 million per person; a 15 percent capital gains tax rate; lower personal income tax rates; as well as numerous other tax credits and deductions such as equipment depreciation and the biodiesel tax credit. If Congress fails to act before the beginning of January, estate tax rates rise to 55 percent with an exemption of only $1 million, capital gains taxes rise to 20 percent and all personal income tax rates rise between three and five percent.

A reduction in the estate tax exemption amount alone would dramatically affect the number of Nebraska farms and ranches that would be exposed to estate tax liability. Research conducted by the American Farm Bureau Federation shows that lowering the estate tax exemption from $5 million to $1 million would grow the number of Nebraska farms and ranches that exceed the estate tax exemption from 1,628 farms and ranches to more than 15,000 farms and ranches. "We're talking about a nine-fold increase in the number of farms and ranches that could face the implications of the death tax when you combine a reduction in the estate tax exemption with the recent appreciation in agricultural land values in recent years, said Nelson.

"Passing a farm bill and extending the 2012 federal tax provisions are critically important to our members as both greatly affect how our members make decisions related to their operations. The resolution adopted by our delegates sends a strong signal that now is the time for action on these issues," said Nelson.



ASA, Allied Farm Groups Meet with Hoyer to Press for Farm Bill

American Soybean Association (ASA) President Steve Wellman and Vice President Richard Wilkins joined fellow farmer-leaders from the American Farm Bureau Federation, National Milk Producers Federation, National Corn Growers Association and the National Association of Wheat Growers in a meeting today with House Minority Whip Steny Hoyer (D-Md.) to reiterate the critical importance of finishing a new, five-year farm bill before the 112th Congress adjourns.

“We appreciate the opportunity to meet with Minority Whip Hoyer and his staff today. It is imperative that the Minority Whip and all of the House leadership understand the importance of passing a new farm bill to provide certainty for farmers heading into 2013. The bill represents a good-faith investment in an agriculture industry that has been one of the bright spots in the American economy,” said Wellman, a farmer from Syracuse, Neb., who grows soybeans, corn, wheat, alfalfa and raises cattle. “It is critical that we sustain that progress, and ASA and our colleagues in the farm community are committed to working together to do so. We have come to the bargaining table with concrete spending reductions, and remain the only industry that has done so. We are, as we have been, open to compromise, provided that the end product is a new, five-year farm bill that enables America’s farmers to continue producing the safest and most abundant food supply in the world.”

House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) have both given commitments to address the farm bill in the lame duck session, however any effort appears to be delayed as the House remains divided in discussions on the fiscal cliff.

“We hope that, as Congress tackles the fiscal cliff, the farm bill will be resolved as well, but we would remind our elected representatives that the issues we tackle as farmers can’t be solved by political posturing or placing blame,” added Wilkins, who grows soybeans, corn, wheat, barley, vegetables, hay and raises cattle in Greenwood, Del. “We face real challenges every day, and we need real solutions in place to manage risk, protect resources, encourage conservation, foster research and innovation, and grow our market opportunities. The farm bill holds solutions in each of these areas, and we encourage the House to get to work immediately to pass this bill.”
ASA will continue to meet with congressional leaders to encourage passage of a new, five-year farm bill between now and the adjournment of the 112th Congress.



Farm Service Agency Conservation Loans Available

Farm Service Agency (FSA) State Executive Director, Dan Steinkruger, announced that funds are now available for Guaranteed Conservation Loans.  Conservation Loans allow farmers and ranchers to implement conservation practices on their land that will help protect natural resources.

“Guaranteed Conservation Loans are a useful alternative to help operators implement any Natural Resources Conservation Service (NRCS) approved conservation practice including, but not limited to, waste management systems, conservation structures or water conservation measures,” said Steinkruger.

Unlike other FSA guaranteed loan programs, Conservation Loans are not limited to family size farms.  Operators who may not normally qualify for an FSA guaranteed farm operating or ownership loan could be eligible for a Guaranteed Conservation Loan.

According to Steinkruger, the Guaranteed Conservation Loan limit is $1,302,000 and interest rates and terms will vary. The maximum guarantee FSA can issue is 75 percent.

A streamlined application process is available for applicants with a strong financial position. The streamlined process reduces paperwork requirements and eliminates the requirement to provide a cash flow statement and supplementary documentation.

Interested applicants who do not already have a conservation plan approved by NRCS should work with their local NRCS staff to develop a conservation plan. As with other guarantees, lenders can reduce risk, increase liquidity and offer lower rates by selling the guaranteed portion in the secondary market.

For questions regarding Guaranteed Conservation Loans, please contact your lender or your local County FSA Office.



The Andersons Finalizes Purchase of Elevators and Farm Agronomy Centers

The Andersons, Inc. (Nasdaq: ANDE) announces today it has completed the purchase of a majority of the grain and agronomy locations of Green Plains Grain Company, LLC, a subsidiary of Green Plains Renewable Energy, Inc. (Nasdaq: GPRE)

“We are significantly diversifying our grain and agronomy businesses by expanding into Iowa and Tennessee with the acquisition of these high quality assets. Expanding our connectivity to the ‘farm gate’ is part of our long-term strategy,” says Denny Addis, President, Grain Group.

“We are embarking on a new opportunity with a new team in new communities and look forward to providing service to thousands of new customers,” he continues. “We are fortunate to be adding a skillful, knowledgeable and customer-service oriented 130-member workforce to our grain and agronomy teams. The drought aside, this year has been significant for the Grain Group in terms of growth.”

The purchase includes seven facilities in Iowa and five in Tennessee, with a combined grain storage capacity of about 32 million bushels, which increases the Grain Group’s storage capacity by nearly 30 percent.  Two Iowa locations also have 30,000 tons of combined fertilizer storage.     



IFB to Help Members Manage Rising Health Care Costs

Farmers, like many self-employed Iowans, are concerned about the rising costs for health care and the changing environment of health care regulations. To kick off Iowa Farm Bureau Week this week, the Iowa Farm Bureau Federation (IFBF) has added a new benefit partner to help members qualify for an average of over $4,000 in tax savings to reduce out-of-pocket and health insurance premium costs.

BASE, a third party benefit administration company headquartered in Adel, Iowa, will work with Farm Bureau members who are self-employed or small business owners to customize a benefit plan for their specific needs and ensure the plan is in compliance with government regulations. More than 70 percent of self-employed are able to qualify for tax advantaged plans, regardless of how their business is structured. BASE will also offer exclusive savings to Iowa Farm Bureau members on these plans, providing another tool in Farm Bureau's suite of supplemental health care benefits designed to ease the pinch of rising costs.

"As farmers, we depend on our certified public accountant to provide us with every legitimate tax deduction we can get. That's why we've been using the BASE Health Reimbursement Arrangement (HRA) to deduct our medical expenses each year," said Joanne Piercy, a farmer in Lenox. "With such a great tax savings each year, we'll continue to take advantage of the BASE HRA as long as we're farming."



ASA Urges Senate to Vote Yes on Russia PNTR Bill

Reacting to news that a Senate vote on the Russia and Moldova Jackson-Vanik Repeal Act of 2012 may happen as early as Wednesday of this week the American Soybean Association (ASA) is encouraging all senators to vote yes on the House-passed version of the bill without amendment. The bill, if passed by the Senate and signed into law by President Barack Obama, would graduate Russia from the Jackson-Vanik Amendment to the Trade Act of 1974, and establish permanent normal trade relations (PNTR) with the world’s ninth-largest economy. The House overwhelmingly passed its version of the bill, H.R. 6156, on November 16. ASA President Steve Wellman, a soybean farmer from Syracuse, Neb., issued the following statement on the legislation:

“We call on the Senate to vote yes on the Russia and Moldova Jackson-Vanik Repeal Act as quickly and in the same bipartisan fashion as their counterparts in the House of Representatives. By establishing PNTR with Russia, American soybean farmers can reap the benefits of more than 140 million consumers and a fast-growing economy, which last year imported more than $770 million in American meat, poultry, egg and dairy products, each of which require soybean meal as feed in the production process. Until the U.S. graduates Russia from the Jackson-Vanik Amendment and establishes PNTR, we will not be able to fully access the Russian market without penalty. With this bill signed into law, our farmers can compete in one of the world’s largest and most promising economies.”



Despite Drought, Council Report Indicates High Quality US Corn Crop

The overall quality of the 2012 U.S. corn crop is high and improves upon last year’s very good marks across a range of test factors, according to the U.S. Grains Council’s Corn Harvest Quality Report 2012/13. Total U.S. corn production fell in 2012 due to the worst drought in decades, but despite the drought, this year’s crop showed a year-over-year improvement in average text weight, protein levels, and density, as well as lower moisture and BCFM than the 2011 crop. The full report is now available at www.grains.org.

This is the second year for the Council’s Harvest Report. The Harvest Report assess the quality of the U.S. crop as it is delivered from farms to local elevators, the first step in entering international marketing channels.  It will be followed in April 2013 by the second annual Corn Export Cargo Quality Report, which assess quality at the point of export.

The Council produces the reports so global importers will have access to reliable and comparable data from year to year, with samples being gathered and tested using transparent and consistent methods. “With an increasingly competitive global market, the availability of accurate information is in the long-term best interest of U.S. farmers, exporters and international buyers,” said Erick Erickson, USGC director of global strategies. “We received a tremendously positive response to the inaugural reports from international buyers, so certainly there is a need for this type of information.”

For the harvest quality report, samples of U.S. corn were gathered from 12 states that combined are the source for 99 percent of U.S. corn exports. Tests conducted on the samples cover grading factors like test weight, physical factors such as stress cracks and other items such as moisture, protein starch, oil and mycotoxins.

“The samples tested demonstrate that this year’s U.S. corn crop, while smaller due to the drought, is of outstanding quality overall,” Erickson said.

Data indicates the average test weight for the 2012/13 crop was 58.8 pounds per bushel, an increase over 2011 and more than 2 pounds per bushel above the grade limit for No. 1 U.S. corn. At the same time, broken corn and foreign material (BCFM) was lower, as were the number of damaged kernels. Moisture, at 15.3 percent, was also lower than last year.

“Protein numbers were generally higher, starch was marginally lower and oil content was unchanged,” Erickson said.

The frequency of stress cracks, which indicate the relative susceptibility of kernels to break up during handling, are up marginally (from 3 percent last year to 4 percent this year), which could be an indicator that the crop will be more susceptible to breakage during handling, information that may turn up in the Corn Export Cargo Quality Report in the spring.

Erickson noted that the Council’s Corn Harvest Quality Report 2012/13 only assesses the quality of the current U.S. corn harvest as it enters merchandising channels, as quality can be affected by further handling, blending, storage conditions and other downstream factors.

The full report is available at the U.S. Grains Council website, www.grains.org, and from the Council’s international offices.



U.S. Soy Exports Remain Strong

U.S. soybean farmers continue to reassure international customers of U.S. soy by meeting demand with high-quality soybeans. According to U.S. Census Bureau figures, U.S. soybean farmers exported more than 1.8 billion bushels of U.S. soy during the 2011-2012 marketing year, compared with approximately 2 billion bushels in 2010-2011. The 2012 export numbers include 1.3 billion bushels of whole soybeans, meal from more than 404 million bushels of soybeans and the oil from 126.5 million bushels of soybeans. U.S. soy exports this year are valued at more than $23 billion.

U.S. farmers harvested 3.05 billion bushels of soybeans last year, so these exports represent about 55 percent of that production. Soy customers in China, the largest importer, bought almost 850 million bushels of whole soybeans, or more than one out of every four rows U.S. farmers grew.

“Our customers’ main concern has been whether we were going to be a reliable supplier,” says Sharon Covert, soybean farmer from Tiskilwa, Ill., who leads USB’s International Marketing program. “The checkoff continues to assure them that while we may not have as many bushels per acre, we are a reliable supplier of high-quality soybeans.”

Throughout the year, the soy checkoff remains in contact with international customers to discuss many soy industry issues, such as quality and current crop conditions. These conversations proved to be especially important with this summer’s conditions.

Covert adds that it is important for customers of U.S. soy to know that farmers provide this supply of soy in a sustainable manner. The production practices farmers use, such as no-till or low-till, are not only important to many soy buyers but also help soil retain water in dry years such as this past production year.

Top buyers of whole U.S. soybeans include:
-    China: 848.7 million bushels
-    Mexico: 122.1 million bushels
-    Japan: 66.3 million bushels
-    Indonesia: 65.1 million bushels
-    Egypt: 43.1 million bushels
-    Taiwan: 38.7 million bushels

Top buyers of U.S. soy meal include:
-    Mexico: meal from 67.6 million bushels of soybeans
-    Philippines: meal from 53.1 million bushels of soybeans
-    Canada: meal from 50.4 million bushels of soybeans

Top buyers of U.S. soy oil include:
-    Morocco: oil from 30.4 million bushels of soybeans
-    Mexico: oil from 28.8 million bushels of soybeans
-    China: oil from 20.2 million bushels of soybeans



An Ounce of Preparation Now Saves Headaches this Spring

The National Corn Growers Association reminds farmers that early refuge planning helps ensure a smooth planting season. As many complete planting planning, the time to make concrete preparations is now.

"Refuge planning is important for all farmers because it supports the continued viability of important tools," said NCGA Trade Policy and Biotechnology Action Team Chair Jim Zimmermann. "While seed companies work hard to keep a pipeline of new products flowing, it is important that farmers keep up their end of the bargain too. Early planning makes meeting refuge requirements much simpler once planting season arrives."

Farmers should first consider the type of refuge solution they will use next year. Most major technology providers now offer integrated refuge solutions that will ensure compliance. Farmers planning to plant refuge in a block should secure refuge seed now.

While proper refuge planning can be confusing given the host of differing requirements associated with each variety, farmers have many allies who can act as resources. Generally the first and most important resource, seed dealers and crop consultants will help explain requirements and aide in planning.

Farmers interested in reading information supplied directly by seed companies should access the Insect Resistance Management and Technology User Guide supplied by each company.

Finally, NCGA offers an Insect Resistance Management refuge calculator that allows users to easily clarify refuge options and develop a plan. This tool provides information on even for the latest products. To access or download the NCGA calculator, please visit www.irmcalculator.com.

In addition to proper refuge planning, NCGA also recommends that growers pay attention to any signs of insect pressure in their fields and acquaint themselves with more advanced integrated pest management solutions. By keeping up-to-date on all options, farmers increase the tools readily available in their arsenal should the need arise.



Weekly Ethanol Production for 11/30/2012

According to EIA data, ethanol production averaged 835,000 barrels per day (b/d) – or 35.07 million gallons daily.  That is up 32,000 b/d from the week before.  The 4-week average for ethanol production stood at 818,000 b/d for an annualized rate of 12.54 billion gallons.

Stocks of ethanol stood at 19.3 million barrels. That is an increase from last week.

Imports of ethanol showed 92,000 b/d, up dramatically from last week.

Gasoline demand for the week averaged 350.1 million gallons daily.

Expressed as a percentage of daily gasoline demand, daily ethanol production was precisely 10%.

On the co-products side, ethanol producers were using 12.661 million bushels of corn to produce ethanol and 93,188 metric tons of livestock feed, 83,078 metric tons of which were distillers grains.  The rest is comprised of corn gluten feed and corn gluten meal.  Additionally, ethanol producers were providing 4.35 million pounds of corn oil daily.



EIA projections show U.S. energy production growing faster than consumption through 2040

EIA has just issued its Annual Energy Outlook 2013 (AEO2013) Reference case, which highlights a growth in total U.S. energy production that exceeds growth in total U.S. energy consumption through 2040.

"EIA's updated Reference case shows how evolving consumer preferences, improved technology, and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy, and reduced energy imports," said EIA Administrator Adam Sieminski.

"This combination has markedly reduced projected energy-related carbon dioxide emissions," said Mr. Sieminski.

AEO2013 offers a number of key findings, including:

Crude oil production, especially from tight oil plays, rises sharply over the next decade. Domestic oil production will rise to 7.5 million barrels per day (bpd) in 2019, up from less than 6 million bpd in 2011.

Motor gasoline consumption will be less than previously estimated. Compared with the last AEO, the AEO2013 shows lower gasoline use, reflecting the introduction of more stringent corporate average fuel economy (CAFE) standards. Growth in diesel fuel consumption will be moderated by the increased use of natural gas in heavy-duty vehicles.

The United States becomes a net exporter of natural gas earlier than estimated a year ago. Because quickly rising natural gas production outpaces domestic consumption, the United States will become a net exporter of liquefied natural gas (LNG) in 2016 and a net exporter of total natural gas (including via pipelines) in 2020.

Renewable fuel use grows at a much faster rate than fossil fuel use. The share of electricity generation from renewables grows to 16 percent in 2040 from 13 percent in 2011.

Net imports of energy decline. The decline reflects increased domestic production of both petroleum and natural gas, increased use of biofuels, and lower demand resulting from the adoption of new vehicle fuel efficiency standards and rising energy prices. The net import share of total U.S. energy consumption falls to 9 percent in 2040 from 19 percent in 2011.

The AEO2013 Reference case focuses on the drivers that shape U.S. energy markets under the assumption that current laws and regulations remain generally unchanged throughout the projection period. The complete AEO2013, to be released in early 2013, will include many alternative cases in recognition of the uncertainty inherent in making projections about energy markets, which in part arises from assumptions about policies and other market drivers such as trends in prices and economic growth.

Key updates made for the AEO2013 Reference case include the following:
    Extension of the projection period through 2040, an additional 5 years beyond AEO2012.
    A revised outlook for industrial production to reflect the impacts of increased shale gas production and lower natural gas prices, which result in faster growth for industrial production and energy consumption. The industries affected include, in particular, bulk chemicals and primary metals.
    Adoption of final model year 2017 to 2025 greenhouse gas emissions and CAFE standards for light-duty vehicles (LDVs), which increases the projected combined fuel economy of new LDVs to 47.3 mpg in 2025.
    Updated modeling of LNG export potential.
    Updated power generation unit costs that capture recent cost declines for some renewable technologies, which tend to lead to greater use of renewable generation, particularly solar technologies.

Details of the AEO2013 Reference case are available at http://www.eia.gov/forecasts/aeo/er/.



EIA Cuts Biofuels Growth Rate

The Energy Information Administration projects a slower growth rate for biofuels than what its forecast called for last year, in part on lower gasoline demand, according to the EIA's Annual Energy Outlook 2013 that assesses the 2012 to 2040 period.

"Biofuels are now expected to grow at a slower rate," commented Adam Sieminski, EIA administrator who presented the report in a webcast this afternoon.

"For one thing, the gasoline pool is shrinking," said Sieminski, who referenced higher efficiency ratings mandated for future model vehicles in the United States. "So we need to move to E85 to accommodate growth in a lot more biofuels including ethanol and cellulosic biofuels."

He added previous projections showed cellulosic ethanol facilities building out sooner, with the Environmental Protection Agency, the administrator of the Renewable Fuel Standard that mandates progressively higher renewables to be used in lieu of petroleum-based products, forced to cut demand targets for cellulosic fuels the last couple of years.

"It looks like it has proven to be more difficult than expected," said Sieminski of the slower than expected commercialization of cellulosic fuels.

The outlook sees biomass use for fuel totaling 4.2 quadrillion Btu by 2035 compared to 5.4 quadrillion Btu projected in the 2012 outlook, and 4.9 quadrillion Btu in 2040, up from 2.7 quadrillion Btu in 2011.



ACE says EIA’s energy outlook misreads purpose of RFS

The American Coalition for Ethanol (ACE) today cautioned those who would cite the Energy Information Administration’s (EIA) “reference case” energy outlook for 2013 in an attempt to undermine the Renewable Fuels Standard.

“Doing so would only prove their lack of understanding of EIA’s report and, more importantly, show their ignorance of the purpose of the RFS,” said ACE Executive Vice President Brian Jennings. “Congress designed the RFS as a flexible and forward-looking policy to serve as a catalyst for biofuel use, and by design, the RFS is built to help break through the blend wall,”

“EIA, on the other hand, makes its projections based on market conditions and known technology. Ten years ago, the EIA Outlook said we could only make 3.4 billion gallons of ethanol in the U.S. by 2020. Congress deemed that unacceptable, and passed the RFS to encourage alternatives to oil, and they were right. The RFS works. Our industry produced almost four times that much ethanol two years ago - ten years ahead of schedule.”

“EIA also appears to recognize that current market conditions include an artificial limitation on ethanol use, known as the blend wall, which is a creation of Big Oil and their supporters in Congress. The oil industry is spending their time and tens of millions of dollars trying to repeal the RFS through frivolous lawsuits and anti-competitive Congressional action, rather than working with retailers and ethanol producers to break down that wall by blending newly-approved E15 and other ethanol-blended fuels. It’s a little bit like a five-year-old trying to get his parents to say he doesn’t have to eat his vegetables by whining and refusing to even try them. We can’t allow oil companies to overturn a policy that’s good for all of us simply by refusing to follow their rules.”

“Despite Big Oil’s war on the RFS, it continues to be the most successful renewable fuel policy ever enacted by Congress. It has reduced oil imports and saved consumers money at the pump. Thanks to EPA’s recent approval of grain sorghum as an advanced biofuel feedstock under the RFS, we now have an American-made source of advanced ethanol/biofuel which can help fulfill the RFS,” said Jennings.



 Novozymes on EIA Energy Outlook: Biofuels Ready Now

 Novozymes, the world leader in making industrial enzymes for biofuels, issued a statement on the U.S. Energy Information Administration Annual Energy Outlook for 2013, focusing on the drivers that shape U.S. energy markets. The Outlook predicts that crude oil prices will continue to rise.

“As oil prices climb, Americans deserve affordable alternatives,” said Adam Monroe, President of Novozymes North America. “We agree it’s going to take a mix of solutions to meet our nation’s energy needs. Biofuels have proven they are one of those solutions, reducing prices at the pump, creating careers and economic growth, reducing carbon emissions, and putting steel in the ground in rural communities. If smart, market-based policies like the RFS are maintained, advanced biofuels will continue to succeed and grow.”

Biofuels have already created more than 400,000 good paying jobs, $42 billion in economic activity last year and reduced our foreign oil imports by 25 percent. Advanced biofuels have the potential to support 800,000 careers by 2022 while continuing to enhance the energy security of the United States.

In May 2012, Novozymes opened the largest enzyme plant dedicated to biofuels in the United States in Blair, Nebraska. The plant was built with $200 million in private investment and created 100 career positions and 400 construction jobs. Other advanced biofuel projects have steel in the ground or are underway include:
    POET’s Project LIBERTY in Iowa;
    DuPont’s cellulosic facility in Nevada,
    Fiberight’s trash to fuel plant in Virginia,
    KiOR’s biomass facility in Mississippi,
    and INEOS Bio’s Indian River BioEnergy Center in Florida.



Federation of State Beef Councils to Celebrate 50th Anniversary in 2013

It was a presence well before the mandatory $1-per-head beef checkoff was created in 1985. And in 2013 the Federation of State Beef Councils will recognize that presence, celebrating its 50th anniversary as a force for grassroots participation in beef checkoff programs.

The Federation was created as the Beef Industry Council of the National Live Stock and Meat Board in 1963. It moved to the National Cattlemen’s Beef Association (NCBA) when the Meat Board and National Cattlemen’s Association merged in 1996 to form NCBA. While it has had two homes in its lifetime, the Federation’s role has not changed through the years, according to Federation Chairman Craig Uden, a beef producer from Elwood, Neb.

“The Federation helps assure that grassroots producers, through their state beef councils, have significant input in the workings of the national Beef Checkoff Program,” said Uden. “That grassroots control was paramount to producers when the mandatory checkoff was created in the 1980s. But it really got its start when state beef councils began establishing their own programs more than a half century ago and pushed for a national effort.”

By the time the BIC was created in 1963, five states – Montana and California in 1954, Alabama and Florida in 1955 and Oregon in 1959 – had created their own state checkoff programs, and supported a coordinated national effort that could build on their efforts. More states would soon join them; by 1980 another 25 states had formed councils. Today there are 45 state beef councils qualified by the Cattlemen’s Beef Board to collect the $1-per-head mandatory national beef checkoff in their states.

Beef Councils voted overwhelmingly in July, 2010 to maintain their partnership between the Federation and NCBA, while creating more independence for the Federation. Since that time, Federation leaders and staff have been working to perfect a structure that ensures greater independence, while still preserving a 16-year successful working relationship with NCBA.

The Beef Checkoff Program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States with qualified beef councils retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.

The NCBA, a contractor to the beef checkoff, was established in 1898. Through its Federation Division the organization helps preserve the strength of the industry through consumer promotion and education, working to create new markets and increase demand for beef.



South Korea: Rebuilding Confidence in U.S. Beef

Only four years ago, 100,000 South Koreans lined the streets of Seoul to protest the return of U.S. beef to Korea. Consumer confidence in American beef was at an all-time low. Media outlets would not even accept paid ads promoting the products for fear of getting pulled into the protest backlash – instead joining the outrage by declaring U.S. beef to be unsafe from BSE (bovine spongiform encephalopathy).

Flash forward four years and we find the editors of three influential Korean culinary magazines on a detailed tour of the U.S. beef industry, visiting a Wyoming ranch, receiving a scientific briefing at Colorado State University, talking with beef industry distributors and retailers in New York City and enjoying the world’s finest grain-fed beef. And writing about their experiences in glowing terms.

The evolution of Korea, from No. 3 destination for U.S. beef exports in 2003 to a tumultuous scene of angry protests and back to a growing and vibrant market, has been a rollercoaster ride. However, for the American beef industry, the time and energy spent wooing Korean importers, retailers, food service operators, media and consumers has been a worthwhile investment.

“Korean consumers have a very high standard for quality,” said Jihae Yang, U.S. Meat Export Federation (USMEF) director in South Korea, whose team organized the media visit. “We have remained confident that when we can tell the real story behind U.S. beef – and the industry’s commitment to quality and safety – that we would find a receptive audience for that message.”

The story told by the three Korean culinary magazines is evidence that the positive message of U.S. beef is getting through. Following the editors’ visit in late August and early September, each of the magazines has produced impressive multi-page articles with full-color photos documenting their trip, with extensive focus on the Wyoming ranching operation of Irv Petsch and the world-class quality of USDA prime steaks the editors enjoyed at several of New York’s finest restaurants.

“This was an extremely positive experience for those editors,” said Suzanne Strassburger, president of Strassburger Meats and creator of the Suzy Sirloin line of meat products. Strassburger, a USMEF member, served as guide for the team for a behind-the-scenes tour of famed New York steakhouses Smith & Wollensky and Peter Luger. “Whether they’re meeting with chefs, suppliers, butcher shop owners or ranchers, this tour allowed them to see the faces behind our industry and get to know them personally.”

The editors of Lemon Tree (top-tier lifestyle magazine with 80,000 circulation), Essen (leading culinary and fine dining magazine with 55,000 circulation) and Cookand (influential cooking and lifestyle magazine with 40,000 circulation) brought home messages that told a story of the quality production practices that go a long way to building consumer confidence in American beef.

“The quality of U.S. beef is world-class,” reported Essen. “U.S. producers care about animal welfare,” adding that many American livestock operations have adopted systems designed by Dr. Temple Grandin, “one of the top scientists in humane livestock handling,” to reduce stress in animals.

The messages of corn-fed quality were echoed in the other magazines, which detailed the journalists’ visits to the Agricultural Research Development and Education Center at Colorado State University, briefings by USMEF staff in Denver, the Petsch family’s ranching and feeding operation near Meriden, Wyo., and to New York to see the retail and food service side of the industry.

The U.S. beef industry tour, the first by any Korean media team since the first BSE finding in the United States in 2003, was made possible through support from the Beef Checkoff Program and the USDA Market Access Program (MAP).

“I was very surprised and impressed by the academic support available to the U.S. beef industry, and by the support producers receive from USMEF and other organizations,” said Ho Sun Lee, editor-in-chief of Lemon Tree. “It was good for us to see not only the production practices, but to experience the entire culture that is responsible for producing U.S. beef.”

“This type of positive reporting on the U.S. beef industry in a key market like Korea is invaluable for our industry, from producers to processors to exporters,” said Philip Seng, USMEF president and CEO. “Many months of education and cultivation have gone on behind the scenes to encourage these independent journalists to embark on this ‘farm to fork’ experience. The results speak for themselves.”

USMEF has been active in the market working to rebuild consumer confidence in U.S. beef. After market access was regained in 2008, USMEF introduced its “Trust” campaign to educate importers, buyers, consumers and key influencers with factual information about U.S. beef. The campaign is now in its third phase, “World Class Beef,” which focuses on the quality that makes U.S. beef the most highly prized grain-fed beef in the world.

In 2003, South Korea was the No. 3 market for U.S. beef, buying 246,595 metric tons (543.6 million pounds) valued at $815 million – accounting for 19.4 percent of all U.S. beef exports by volume 21.1 percent by value. Since falling to virtually nothing (233 metric tons valued at $610,000) in 2006, Korea rebounded in 2011 to be the No. 4 market for U.S. beef, purchasing 154,019 metric tons (339.6 million pounds) valued at $686 million.

“We have seen a lot of progress in Korea, but great opportunities remain,” said Seng. “During the years we were effectively out of the Korean market, we lost market share to our global competitors, but with the help of initiatives like this media outreach program and our ongoing initiatives at all levels of the meat industry trade, we are confident that Korea will once again be a key customer for U.S. beef in the years ahead.”    



All Quiet on Fertilizer Front

Fertilizer prices continue to remain quiet with little move in either direction, according to retail fertilizer prices tracked by DTN for the fourth week of November. But the cease fire in price movements could be temporary if water levels on the Mississippi River don't improve in time for spring deliveries.

Two fertilizers edged higher compared to the fourth week of October but these moves were fairly minuscule. MAP had an average price of $679/ton while anhydrous was at $864/ton.  Four fertilizers were just slightly lower compared to a month earlier. Potash had an average price of $617/ton, urea $580/ton, 10-34-0 $616/ton, UAN28 $377/ton and UAN32 $418/ton.  One fertilizer, DAP, was unchanged. The phosphorus fertilizer had an average price of $642/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.63/lb.N, anhydrous $0.53/lb.N, UAN28 $0.67/lb.N and UAN32 $0.65/lb.N.

Only one of the eight major fertilizers is still showing a price increase compared to one year earlier. Anhydrous is now 6% higher compared to last year.  Six fertilizers are actually lower in price compared to November 2011. Urea, potash and UAN28 are all 7% lower while MAP is 8% less expensive and both DAP and UAN32 are 9% lower compared to last year.  The remaining fertilizer is now down double digits from a year ago. 10-34-0 is 25% less expensive from a year earlier.



Informa Ups Brazil Soy Estimate

Private analytical firm Informa Economics on Tuesday raised its outlook for Brazil's soybean production, traders said.

Informa, a closely watched crop forecaster, pegged Brazil soybean production at 81.4 million metric tons, up 150,000 metric tons from its November estimate, traders said. The firm projected Brazil corn production at 66.2 million metric tons, down 600,000 metric tons from its November forecast.

Informa lowered its forecasts for Argentina corn and soybean production. Informa pegged Argentina soybean output at 58.4 million metric tons, down 1.1 million from its November forecast, and it lowered its Argentina corn forecast by one million metric tons to 27 million.

Informa lowered Argentina soy and corn forecasts due to an expected 300,000-hectare reduction in expected soy plantings and a 100,000-hectare reduction in area estimated to be harvested for grain.

Problems have arisen in Argentina due to wet conditions. Planting progress is behind average, especially in the case of corn as progress is lagging behind normal by about four weeks, Informa notes in the report, traders said.

U.S. Department of Agriculture in its Nov. 9 supply-and-demand report estimated Brazil soy production at 81 million metric tons and Argentina soy output at 55 million. USDA pegged Brazil corn production at 70 million metric tons and Argentina's corn crop at 28 million.

Informa increased China's 2013 corn production forecast 4.0 million metric tons to 205.0 million.

Informa forecasts Argentina's wheat production at 11.5 million metric tons, down 500,000 metric tons from last month and, if realized, would be 4.5 million below the previous year, traders said.

Informa also issued estimates for U.S. cotton, forecasting for 2012 production at 17.55 million 480-pound bales, 100,000 larger than USDA's November forecast but would be about 2.0 million above last year.

USDA will release its latest estimates on U.S. and world supply and demand on Dec. 11.



CWT Export Assistance Uses 75% of Milk Production Increase

November was another very active month for the Cooperatives Working Together (CWT) Export Assistance program. Of the 79 requests received, CWT provided members with competitive assistance on 18 cheese bids totaling 7.315 million pounds, 14 butter bids totaling 9.306 million pounds, and one whole milk powder bid for 85,980 pounds.

When combined with assisted sales from the previous ten months, this activity brings the total pounds of cheese sold with the help of CWT to 113.6 million pounds for the year. The total butter CWT has helped members to sell is 70.5 million pounds. Total anhydrous milkfat and whole milk powder sales assisted by CWT are 127,868 pounds and 171,961 pounds, respectively.

These sales are the equivalent of 2.590 billion pounds of milk on a milkfat basis. That means that CWT-assisted export sales will utilize 75% of the 3.4 billion pounds of additional milk produced so far in 2012.



Corporate support of National FFA Organization in 2012 tops $16.2 million

Corporate and individual contributions to the National FFA Foundation in 2012 to support national FFA programs and agricultural education climbed to more than $16.2 million.

Corporate support this year exceeded the $15.8 million donated in 2011 and $15.6 million in 2010. Individual giving also rose to $558,000, up from $475,000 a year ago and $292,000 two years ago.

Pfizer Animal Health gave $1.27 million to FFA this year to link veterinarians in local communities with FFA members planning careers in animal health. Other million-dollar corporate contributors were CSX Transportation and RFD Communications, which operates RFD-TV and Rural TV. Monsanto provided more than $890,000 to support national student leadership conferences, educational awards, awareness campaigns and more.

And Cargill and General Mills committed more than a half-million dollars to fund the creation of a new food science and safety curriculum for agriculture students.

“Financially backing FFA and agricultural education creates critical educational opportunities for our students as they grow and learn about the science, business and technology of agriculture,” said National FFA Foundation executive director Rob Cooper. “Corporate and individual donations help ensure our members will become leaders with core skills necessary to meet world needs for food, fiber and renewable energy.”

Individuals also stepped up to support FFA in 2012. A group of eight people who advise FFA in matters concerning individual giving created a pool of donations to serve as matching-fund incentives and encourage others to support FFA. The group will give more than $312,000 over the next three years and each new donation to FFA of $1,000 to $100,000 will be matched by the group.

And Nebraska business owner and former FFA member Ron Grapes established a major endowment that will provide grants for FFA members to use and complete their required supervised agricultural experience, marking the first time in the 85-year history of FFA that an endowment was established to support the organization’s SAE program.

Funds donated to the National FFA Foundation help sponsor leadership development training initiatives, national award and recognition programs, scholarships, service-learning activities, global engagement programs, nationwide teacher training and more. Since its inception, the foundation has raised more than $260 million.



Dillon Wins! American Ethanol Celebrates "Rookie of the Year" Award

American Ethanol congratulates spokesman and driver Austin Dillon on being named 2012 NASCAR® Nationwide Series Sunoco Rookie of the Year. Now, fans have an opportunity to congratulate Dillon personally too during the American Ethanol live Twitter chat which Dillon will host next week from 10:30 to 11:30 a.m. CST Monday, Dec. 10.

"All of the American Ethanol partners are so excited for Austin," said National Corn Growers Association NASCAR Advisory Committee Chairman Jon Holzfaster. "Rookie of the Year is a big win both for him personally and for farmers across the country. With all eyes on Austin, NASCAR fans also get to see the performance and benefits another homegrown winner offers when E15 fuels the race. Every car in every series races to the finish with E15 in the tank, but we are particularly proud that such a talented young driver speaks on our behalf."

Austin Dillon was officially named the 2012 NASCAR Nationwide Series Sunoco Rookie of the Year recently at Homestead-Miami Speedway. Dillon joins his younger brother, Ty Dillon, as a 2012 Sunoco Rookie of the Year. The younger Dillon clinched the NASCAR Camping World Truck Series version of the award on Friday evening.

Austin Dillon, who drives the No. 3 car for Richard Childress Racing, culminated his first full season in NASCAR's No. 2 tour with two race wins, sweeping both Kentucky Speedway events, along with 16 top-five finishes, 27-top-10s and 3 pole awards. Dillon finished third in the championship point standings and was formally honored for his 2012 accolades at the NASCAR Nationwide Series and Camping World Truck Series championship awards banquet.

To join the conversation on Twitter, follow @AmericanEthanol on Twitter and use the hashtag #CongratsAD3 from 10:30 to 11:30 a.m. CST Monday, Dec. 10.