The U.S. Department of Agriculture (USDA) released its annual Prospective Plantings report this morning, showing U.S. farmers intend to plant 92.2 million acres of corn, 76.6 million acres of soybeans and 58 million acres of wheat this year. The following is an analysis of the USDA Prospective Plantings report from Renewable Fuels Association Vice President of Research and Analysis Geoff Cooper.
A new pseudo-analysis published by the controversial and discredited Journal of American Physicians and Surgeons claims that biofuels expansion is increasing hunger and poverty-related health risks in developing nations. The four-page article was written by Indur Goklany, a long-time biofuels critic and contributor to the Cato Institute. Based on an ill-conceived and opaque method that misinterprets and misrepresents the findings of the World Bank and other researchers, the paper is nothing more than anti-farmer and anti-biofuel vitriol cloaked as real analysis. It simply can’t be taken seriously and it’s not at all surprising that the only publication that would ever consider publishing this piece would be the Journal of American Physicians and Surgeons.
In a letter to industry stakeholders, EPA has reconfirmed it is illegal to sell E15 to gasoline-only vehicles and engines until all regulatory issues have been resolved. However, EPA also reaffirmed the legality of offering properly labeled E15 and any other ethanol blend from E11 to E85 for use Flexible Fuel Vehicles (FFVs).
This week, the chairman of Nestlé, Peter Brabeck-Letmathe, attacked ethanol as an “immoral” policy. It is a charge backed by lots of emotion, but very little fact. Here I present the facts about ethanol, without emotion or misplaced sanctimony.
Today, ethanol-blended fuels are bringing the price down at the pump for consumers. Customers are able to spend between a nickel and a dime less than what they would pay for conventional gasoline. Despite this, the New Hampshire House of Representatives recently voted to put a ban on corn-based ethanol in the state. This bill will not only increase gas prices and lead us down a road toward more imported oil, it will also hinder the very market into which advanced and cellulosic ethanol producers will one day want to sell.
As oil prices soar and gas prices spike even before the start of the summer driving season, lawmakers in Nebraska and New Hampshire take divergent positions on America's dependence on oil. One is seeking to increase its use of domestic renewable fuels. The other is choosing to head down a path of increased oil dependence.
The Nebraska Senate has taken an important step toward increasing the state's use of domestically produced ethanol by approving a bill to repeal labeling requirements for 10 percent ethanol blends. This is a good first step, but oil interests in the state will not swallow this bill without a fight.
Food prices around the globe are rising and as a result, many are quickly searching for a scapegoat. Far too many are still recycling half-truths and misconceptions about the role of rising corn prices in food price escalation and demand for corn created by America’s ethanol industry. In a new look at the distribution of each dollar spent on food in the U.S., the U.S. Department of Agriculture has found just 11.6 cents of each dollar spent makes its way back to the farm. In other words, the raw ingredients in retail food items account for just 12 cents of every consumer dollar spent, while energy costs, labor, transportation, packaging, and other supply chain costs account for the other 88 cents.
Research into the commodity price spikes in 2008 have all shown that speculation was a major driver in the creation of that bubble and in its popping. Now, not three years later, are we seeing history repeat itself? Recent behavior in the corn market says yes.
The new year began with a bang for U.S. ethanol exports, according to government data released today. Ethanol shipments (consisting of both denatured and undenatured, non-beverage, ethanol) totaled 57.2 million gallons in January, marking the second highest monthly total on record. At 714,000 metric tons, January exports of distillers dried grains with solubles (DDGS) were virtually identical to December 2010 levels (713,600 metric tons). Exports to China—the leading export market in 2010—fell by 30% in January, likely as the result of China’s DDGS anti-dumping investigation.
In an attempt to inject some sanity and facts into the recently rekindled “food versus fuel” fervor, RFA has repeatedly highlighted the fact that in 2010/11, the U.S. ethanol industry will use just 3 percent of the global grain supply on a net basis. It just isn’t reasonable to suggest that using such a small slice of the global grain supply could be solely responsible for the recent surge in food prices—especially when the U.S. industry uses nary a bushel of food grains like rice or wheat. Nevertheless, some opponents of biofuels have challenged the legitimacy of our 3 percent figure. But we have nothing to hide. It’s really a straightforward calculation, replicable by anyone with access to USDA data, a pencil and the back of an envelope.