MN Government Doubles Use of E85 Ethanol

It's one thing to mandates other to do something. So it's good to see that Minnesota is practicing what it preaches.

Minnesota state government agencies more than doubled their use of E85 fuel in 2007 according to a new report from the the MN Department of Administration.

State agencies last year purchased 412,483 gallons of E85 from retailers, nearly a 250 percent increase over the 165,526 gallons bought in 2006.

In 2004, Gov. Tim Pawlenty signed an executive order to have state government reduce its on-road fleet's use of gasoline 25 percent by 2010 and 50 percent by 2015; and petroleum-based diesel fuel 10 percent by 2010 and 25 percent by 2015.

Minnesota is working toward these reductions through a combination of increased use of agricultural fuels, increased fuel efficiency of the state fleet by purchasing hybrid and more fuel-efficient vehicles and increased use of electronic government activities.

What is YOUR state doing to reduce gasoline usage?

Source: MN Department of Administration

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OPEC to World: No More Oil for You!

According to OPEC, oil production is not going to be increased. At their recent meeting in Vienna, they decided that the current oil production level is just right for them:

In view of the current situation, coupled with the projected economic slow-down, the Conference agreed that current OPEC production is sufficient to meet expected demand for the first quarter of the year.

So, output will NOT be increased, supply will remain tight and prices near all-time highs.

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The Media Scrambles Egg Cost Facts

We've read dozens of news stories over the past months blaming the increased use of corn for ethanol for the increased cost of food products, especially the higher cost of eggs. But the media has its facts all scrambled.

What every story has carefully omitted is, "How much corn is used to produce a dozen eggs?" The answer is, not much.

For a dozen eggs, about 4 pounds of corn is used for feed. Remembering that a $4.00 bushel of corn contains a whopping 56 pounds, that's about 28 cents per dozen.

The recent run up in egg costs of $1.00 to $2.00 per dozen can not be justified on the minor increase in corn cost to egg production. Energy marketing, labor costs and increased demand all play much bigger roles in the recent food cost increases.

In this case, the general media has laid a giant egg with the facts.

Source: USDA Report (Page 60, MSWord .doc)

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Dole Harvests with Biodiesel

Dole Food Company, Inc. announced this week that it has converted all of its harvesting equipment in California and in Arizona over to B20 Biodiesel fuel.

Biodiesel fuel is a domestic renewable fuel for diesel engines derived from natural oils.

According to Environmental Protection Agency (EPA), Biodiesel is the first and only alternative fuel to have a complete evaluation of emission results and potential health effects submitted to the U.S. EPA under the Clean Air Act Section 211 (b).

Kevin Fiori, Dole's Senior Vice President Agriculture Operations said "being good stewards of the environment is very important to Dole and this includes reducing emissions and using alternative sources of energy." Dole has been testing B20 Bio Diesel since August in farm equipment and off road vehicles with very positive results.

Mr. Fiori also commented that "those of us in agriculture, who depend on the environment, land, water, and air quality to grow foods, are keenly aware of the importance of applying sustainable agricultural practices."

Dole Food Company is the world’s largest producer and marketer of high-quality fresh fruit, fresh vegetables, and fresh-cut flowers with revenues of $6.2 billion a year and over 75,000 employees worldwide.

Source: Dole

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Ethanol Plants Adding Economic Benefits

According to a new report released by the Ethanol Across America Education Campaign, U.S. ethanol production facilities are generating hundreds of millions of dollars to local, state, and federal governments through direct and indirect economic generation.

The Economic Impacts of Ethanol Production, the latest in the ongoing series of the Ethanol Across America Issue Brief Reports, chronicles the impacts of these facilities through case studies and examination of existing studies. With 26 states now hosts to ethanol facilities, the total of state income taxes and property taxes was more than $2.2 billion in 2006 and is estimated to approach $3 billion by 2008.

“These are substantial sums that result directly from these facilities,” said U.S. Senator Ben Nelson (D-NE), Co-Chairman of the Ethanol Across America campaign. “When indirect and induced jobs are considered, along with capital spending and investment, the ethanol industry is adding more than $40 billion of gross output to the U.S. economy. These are monies that are being returned to our local communities and providing improved public services” said Senator Nelson.

The report looked at the impact of ethanol facilities at the local level and cited numerous case studies where the benefits have been quantifiable. In addition to the direct benefits of tax generation, the report looks at the ripple effect of these facilities, including the role ethanol has played in reducing gasoline prices. The displacement of imported oil alone is adding billions of dollars to the buying power of U.S. consumers and is estimated to reduce the U.S. trade deficit by $13 Billion annually.

The increased value received by farmers for corn is estimated by the U.S. Department of Agriculture to reduce federal farm subsidies by nearly $1 billion over the next seven years.

”We are keeping U.S. dollars at home—plain and simple” said U.S. Senator Tim Johnson (D-SD), another member of the Ethanol Across American Advisory Board. “We are increasing net farm receipts, reducing federal farm subsidies, and lowering gasoline prices by expanding the overall fuel supply. And, we are doing this with little if any impact on food prices.”

The report looks at the success story of ethanol in states such as Iowa, South Dakota, Missouri and Nebraska. Economists examined the local impacts of a prospective 100 MGPY plant in a typical community in Nebraska and found that among the many financial benefits from such a facility, the local income in the host community, including the jobs created and property income, is nearly $10 million per year. The total annual value of outputs from such a project is just under $200 million per year, which includes the ethanol and the distillers feed grains produced.

“No matter how we look at these numbers, the story continues to be a positive one,” said Senator Nelson. “We are revitalizing rural America and producing feed, food, and fuel. We look forward to more of these benefits as we enter into the next phase of ethanol development.”

Source: Clean Fuels Development Coalition, Ethanol Across America

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Corn Isn't What's Driving Up the Cost of Food

Letter to the Editor of the Des Moines Register, February 1, 2008:

As a corn grower for nearly 30 years, I continue to see Lester Brown, internationally known economist, feeding media, like the Register, false, out-dated information about food prices and corn ("Get Rid of Ethanol Subsidies, Economist Urges U.S.").

Corn prices have little effect on the cost of food. Only 19 cents of every dollar spent on food goes back to the farm, and corn is just a fraction of that 19 cents.

More than 80 cents goes to labor, transportation, energy, etc. Americans who are upset about prices should point their fingers at the effect of a 29-percent increase in energy costs in 2007.

That gobbled up more of the family budget than the 4.8 percent rise in food prices - only slightly above the general inflation rate.

It wasn't so long ago that Brown was complaining about low U.S. corn prices undercutting peasant farmers in places like Mexico. Now he says that high prices will cut off exports, even though exports are headed for a new record this year. I also question the claim that high corn prices are hurting countries like Pakistan (which does not import any U.S. corn) and China (which has imported little or no U.S. corn for years).

It's because of misinformation like this that the Iowa Corn Promotion Board and the Iowa Corn Growers Association are launching a consumer-education campaign. We want to shatter the myths being peddled by Brown and others.

For example, at current corn prices, the corn to produce a gallon of milk contributes just 13 cents to the price. A blip in what we spend for the corn in our food is well worth what we get by using ethanol to cut our dependence on foreign oil.

Julius Schaaf, Chairman
Iowa Corn Promotion Board
Randolph, Iowa

Source: Iowa Corn Promotion Board

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Kernels of Truth from Iowa

Corn Growers in Iowa, who have been on the front line of undue criticism towards their crop, have responded with a new effort to share the truth. Called Kernels of Truth, the program offers informative and useful facts in the Food vs Fuel debate. For example:

Just last year, the corn from one section about the size of a football field went into 3,291 hamburgers or 66, 713 bowls of corn flakes or 7, 608 pork chops, or even 464 gallons of E85 fuel. In addition to food and fuel, that crop went into paper, textiles, adhesives and more. Multiply those numbers by the nearly 14 million acres of corn produced in Iowa and we’re really talking about meeting demand!

Only 19 cents of your food dollar goes back to Iowa’s farmers. The remaining 80 cents is spent on packaging, energy, transportation, and marketing. Corn plays an important, but small role in the price you see in the checkout lane. The supply of corn going into the retail food industry has not changed in recent years, but rising energy costs have doubled along with world demand for products like milk and meat. In most food products on your grocery store shelves where corn is an ingredient, the corn actually contributes less than a penny to the cost.

Kernel of Truth: There is only 13 cents of corn in a gallon of milk. World demand for milk has increased and has bumped the price. Dairy cattle have the price advantage of using co-products from ethanol production called, Distillers Grains.

Kernel of Truth: Corn contributes only 18 cents to a ¼ hamburger and 31cents to an Iowa pork chop. In Iowa, livestock is still the number one market for our corn.

Kernel of Truth: Soda contains just 3.5 cents of corn based sweetener in a liter. High fructose corn syrup takes up only 7% of our total corn production. Though a major ingredient in soft drinks, it is used in small amounts in most other products.

Kernel of Truth: 11 cents worth of corn can be found in your morning cereal. Most of our corn crop is used to feed livestock or ethanol plants. For example, one bushel of corn produces thirty-eight 12 oz. boxes.

Kernel of Truth: 28 cents worth of corn goes into the production of each dozen of eggs. Iowa is number one in corn production, number one in pork production, and number one in egg production. Being located close to where corn is grown gives egg producers an advantage when looking at feed supplies.

Kernel of Truth: Ethanol production in Iowa creates priceless clean air, new jobs, rural economic activity, and lower fuel costs. Not bad when you consider you are saving the environment, fueling the economy in Iowa, and keeping our fuel dollars in the U.S.

*prices based on current corn prices as of 1-2008.

Source: Iowa Corn Growers Association

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