Ten ways ethanol helps livestock farmers during drought

While the drought is having a profound impact on crop production, thanks to ethanol production there is a larger and more flexible corn supply than was available during previous droughts of this magnitude.

“Today’s USDA report confirms what we already knew – that the drought’s impact on supply and price will be felt by corn consumers around the world,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “Yet, the ag sector has seen droughts before, and it will survive again. This is a time when all of agriculture should pull together. Unfortunately, national livestock trade associations have chosen to politicize the on-going drought as part of their multi-year effort to return corn prices to $2 per bushel.* (see below) At times like this, it is important to look past the rhetoric to the facts. And the fact is that ethanol production provides a benefit to Midwestern livestock producers in many ways.”

The following list from the IRFA gives ten ways that ethanol production helps livestock farmers during the 2012 drought.

1. The ethanol industry has driven the production of a larger corn crop. Simply put, there is more corn to go around. American farmers responded to the demand for more corn for ethanol processing by planting millions more acres. With no ethanol industry, farmers would have likely planted around 75 million acres of corn this year (just like they did in 2001), instead of 95 million acres. So, factoring in drought reduced yields, without ethanol production the 2012 corn crop would likely be more than two billion bushels smaller and there would be NO distillers grains to use as a cost-effective substitute for high-priced corn and soybean meal.

2. The ethanol industry will bear the brunt of any rationing stemming from the drought. Without ethanol, the smaller corn harvest (yield and acres) would have to be rationed solely by livestock producers (domestic or export customers). Ethanol producers have already cut back production by over 10% (several plants have shut down, putting people out of work), and that’s likely just the beginning.

3. Due to ethanol demand, seed companies spent much more than they would have otherwise on research and development over the last decade. As a result, farmers have access to seed varieties with greater yields that can withstand the drought much better than in prior years, like 1988. 4. Maintaining the RFS sends a market signal to world farmers (including those in South America who will be planting soon) and U.S. farmers not to reduce corn acres. Conversely, lowering the threshold for waiving the RFS would send a market signal that renewable fuels are not a reliable market and corn acres planted would be reduced – ultimately hurting the livestock groups asking for such a waiver.

5. One-third of every bushel of corn processed into ethanol returns to the livestock feed supply in the form of distillers grains – including all of the protein, fat, fiber and other nutrients. Only the starch portion of the kernel is used to produce ethanol. Last year the amount of distillers grains produced was more than the total amount of grain consumed by all the beef cattle in American feedlots.

6. As the nutritious feed portions of the corn kernel are concentrated, distillers grains are a more efficient source of energy and protein than the ingredients they are replacing in livestock diets. Distillers grains provide approximately 130-150% of the energy of an equivalent amount of corn when fed to beef cattle. This allows for the use of cheap roughage (corn stalks, soybean straw) to be used in livestock diets.

7. Without distillers grains, the cost of cattle and hog rations in the Midwest would go up as distillers grains and roughage are replaced with expensive corn and soybean meal. Bill Couser, of the Couser Cattle Company near Nevada, Iowa, stated: “It’s amazing to see what ethanol has done for the cattle industry in the state. It used to take 75 bushels of corn to finish a 1300 pound steer. Today, with distillers grains, we use only 16 to 30 bushels of corn and that number keeps dropping.” 8. The drought has negatively impacted much pasture land. Without ample grass, cows may be unable to nurse their calves for the traditional 200-day period. According to Purdue University research, by incorporating distillers grains at 30 or 60 percent of the ration and weaning calves after 100 days, cattle feeders can save money on feed costs with no negative impacts on average daily gain, feed intake and marbling score. 9. Distillers grains improve weight gains despite external factors, such as hot, dry weather. Andy Jenson of Jenson Farms in Nebraska stated that since cattle like the taste of distillers, they eat on a steady basis and gain weight more uniformly, despite changes in weather.

10. Distillers grains provide an economic source of energy, amino acids and phosphorus for hog diets. According to University of Minnesota research, distillers grains improves the digestive health of grower-finisher pigs and may increase the size of litters when sows are fed high levels of distillers grains (30-50% inclusion rate). Roger Zylstra, of Zylstra Hillside Pork near Kellogg, Iowa, adds 30% distillers grains to his hog rations and notes that animal performance is the same while costs are reduced.

* For 22 out of the 25 years prior to enactment of the RFS, large livestock producers were able to purchase corn for a price below the cost of production. This was “sustainable” only because of multi-billion dollar crop support programs in the Farm Bill. This situation gave a competitive advantage to livestock producers (like those in Texas, North Carolina, and Arkansas that control the national livestock groups) who purchase all their corn. Since 2006, the market economics have reversed, thereby benefiting the farmer-feeder over the large livestock producers. When you also factor in the cost advantages of ethanol’s feed co-product (distillers grains) it is clear that ethanol production is not “bad” for livestock producers, although ethanol production has played a role in returning corn prices to levels sustainable by market forces, not price support programs.

Ethanol production is so important to Nebraska's "Golden Triangle" of corn, cattle and ethanol. Just one Nebraska plant in 1985 has grown to 24 ethanol plants in 2012. Spread throughout much of the state, these plants have a capacity of nearly 2.0 billion gallons – making Nebraska the second-largest ethanol producing state in the country. Combined, these plants use more than 700 million bushels of corn per year – and produce more than 6 million tons of distillers grains to feed the number one ranked red meat production state in the country!

The Summer at NCGA

By Sandra Kavan, NCGA-St. Louis intern
Three months have gone by very fast! Back in Nebraska and working on my last semester of classes. I will remember the summer of 2012 as my first internship that made a very large impact in my life. My internship was in St. Louis with the National Corn Growers Association where I learned more than I could imagine, plus all my knowledge on corn and farming practices were tested and challenged.

During my last of month of working at NCGA, I was able to attend the Production, Stewardship and Livestock (PSAT) Action Team meetings and also Corn Congress. During the PSAT meeting I learned about the many different aspects of PSAT and about the members in PSAT. Some of the speakers went more into depth about issues I have learned in classes and at NCGA, while some information was a little over my head because I did not know very much background on it.

After Corn Congress, I continued to stay busy putting the finishing touches to some of my projects, working on my presentation for NCGA, and assisting with the Corn Yield Contest. I really learned numerous things from all the projects in all the different departments. I learned more about biotechnology and the different advancements that they are making. Many of the biotechnology projects tested my knowledge with great mini biotechnology lessons. I looked up congressional districts for the locks and dams on the Mississippi River, Illinois Waterway, and Lower Ohio River as a reference for staff members in both NCGA offices. The largest project that I worked on was for a research web portal for NCGA and membership states. While working on the research web portal, I was able to read over all the different research membership states have and are funding/working on.

It was a busy last couple of weeks with relaxing weekends and a great opportunity that enjoyed very much. I never thought my summer could be that great while spending my first summer being much further than 30 miles from home and the farm.

Thank you National Corn Growers Association for hosting me for the summer! Thank you Nebraska Corn Board for the opportunity to work at NCGA in the St. Louis office! The experience I gained from this summer will really help me when I am looking for a career after graduation. All of the people that I was able to meet and interact with on a daily basis made for a very welcoming and enjoyable summer!

The National Corn Growers Association headquarters office in St. Louis hosted Sandra Kavan of Wahoo, Neb., as their first summer intern supported by a partnership between the Nebraska Corn Board and NCGA. Sandra will be a senior in agribusiness at the University of Nebraska – Lincoln. 

Farm Bill Now!

With the importance of raising public awareness of the need for Congress to pass a new, comprehensive, five-year farm bill before current farm programs expire in September, a coalition of 39 of the nation’s foremost agricultural organizations have come together and created Farm Bill Now.

Why do we need a Farm Bill? Here is what the group says, on the importance of new farm legislation for America’s farmers:

“Calling the farm bill the ‘farm bill’ suggests its impact is limited only to farms and to the rural areas to which they are so closely tied. It’s really a jobs bill. A food bill. A conservation bill. A research bill. An energy bill. A trade bill. In other words, it’s a bill that affects every American.

“The farm bill affects our nation’s ability to provide the necessities of life for a global population projected to pass 9 billion by 2050. Here at home, it affects an industry that provides 23 million—or 1 in every 12—American jobs.

“The farm bill has broad impact on our citizens and our economy. It provides healthy foods to millions of schoolchildren and nutritious options to families in need. It develops and expands trade with valuable foreign markets. By reducing spending significantly compared to prior farm bills, the proposals pending right now in Congress address the need to get our nation’s fiscal house in order.

“And yes, it benefits American farms—98 percent of which are owned and operated by families. It helps big farms and small farms, major crops and specialty crops, organic farmers and conventional farmers, cattle ranchers and cotton ginners, farmers markets and national suppliers, and the vast range of other pursuits that make up American agriculture. This year, it would help farmers tackle the challenges posed by the worst drought in a generation.

“While Congress waits to finish the farm bill, we are united in asking all Americans to encourage legislators—home for summer town hall meetings and  speeches—to finish this vital legislation before the current farm and food law expires in September. After all, it’s your bill too.”

What can you do? Farm Bill Now launched an interactive web portal – www.FarmBillNow.com where you can connect to your members of Congress and show your support for a new five-year farm bill. You can sign a petition of support and directly tweet messages to Congress while connecting to others tweeting using the hashtag, #farmbillnow.

Podcast: At the State Fair: Blood drive, backpacks, the Beef Pit, fuel discounts and more!

In this podcast, Joel Grams, a farmer from Minden and member of the Nebraska Corn Growers Association, gives all the details involving corn growers at the 2012 Nebraska State Fair.

In addition to an exhibit in the main exhibition building, corn growers are conducting the final Stalk Up the Blood Supply and Pig Out blood donation drive on August 31 at the YWCA in Grand Island (212 East Fonner Park Road), from 8 a-m to 2 p-m.

NeCGA also partnered with the Corn Board to provide backpack bags to the 3,000 students who are taking part in Nebraska’s largest classroom at the State Fair.

Today (Wednesday, Aug. 29), you’ll find corn farmers in the Beef Pit dishing up prime rib and other good food until 3:15 in the afternoon.

Finally, there are ethanol fuel promotions occurring during the Fair. One was last Saturday but and the other coming up on Monday, September 3rd. The promotions take place from 4 to 6 p.m. at the Aurora A-Stop on East Highway 30 and Bosselman’s Pump and Pantry at 3355 West Stolley Park Road.

Listen for details.

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

Podcast: Now is not the time to grant a waiver to the RFS

In this podcast, Curtis Rohrich, a farmer from Wood River and member of the Nebraska Corn Growers Association, talks about how the drought is impacting every facet of agriculture, and a lot of sectors beyond just farmers' fields, pastures and barns.

While USDA  has lowered national corn yield estimates, he said, it will be fall or early winter before we know the true size of this year’s crop.

He then discusses the Renewable Fuels Standard, or RFS, and notes that while corn growers support the waiver process, now does not seem like the right time to grant a waiver, for a couple of key reasons.

Listen for details.

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

Meet Nebraska Corn Board Director, Dennis Gengenbach

Dennis Gengenbach represents District 6 for the Nebraska Corn Board and has been serving on the board since 2006. He and his wife live and farm near Smithfield, NE. Their operation consists of 1,350 acres of irrigated corn and soybeans and 300 acres of native pasture.

Dennis attended the University of Nebraska-Lincoln where he majored in the Animal Science Agricultural Honors Program and graduated with a bachelor of science in 1971. Dennis continued his education at Cornell University in Ithaca, New York where he received a Ph.D. in Reproductive Physiology in 1975. After completing further research and a year of teaching at Cornell, he and his family returned to the farm in Nebraska.

Dennis has been very active in the agriculture industry over the years by being involved in a variety of organizations. Dennis served two years as President of the Nebraska Corn Growers Association and also served as chairman of the board. He is a member of the National Corn Growers Association’s Ethanol Committee and has membership in the American Soybean Association, Nebraska Cattlemen and Farm Bureau. Dennis was privileged to be inducted into the Nebraska Hall of Agricultural Achievement in 2003.

Not only has Dennis been active on the state level, but he has also been very active in his community. He served eight years as a member of the Bertrand Community School board serving as President, Vice-President, and Treasurer. He also served on the Gosper County Extension Board and 4-H Auction, Phelps Gosper Livestock Feeders Board, and served as President of the Gelbvieh Association in Nebraska. Dennis has been active in the ELCA serving his congregation as Council President and Secretary, Choir, Sunday School Teacher, Confirmation Guide, and Usher. He is also a member of the Nebraska Synod ELCA Rural Ministry Task Force and Campus Ministry Committee.

Dennis is married to Janice who is a Consulting Dietitian in health-care facilities. They have two children, Nate and his wife Nikki of Hastings and Darcy of Gering, Nebraska. Dennis and Janice are the proud grandparents to grandchildren Micah and Hannah Gengenbach and Macy, Max, and Clare Schlothauer.

Fuel discounts during Nebraska State Fair; win Husker football tickets

Heading to the Nebraska State Fair tomorrow? The Nebraska Corn Board and Nebraska Ethanol Board announced they offering discounts on ethanol blends for flex fuel vehicles (FFVs) from 4 to 6 p.m. on Saturday, August 25 (and again on Monday, September 3 from 4 to 6 p.m.).

Discounts are are 20 cents for E20, 30 cents for E30 and 85 cents for E85 and are available at Bosselman's Pump & Pantry at 1235 Allen Drive in Grand Island and Aurora Cooperative's A Stop at 4155 E. Highway 30 in Grand Island.

In addition to the ethanol promotions, the groups are giving away a pair of Cornhusker football tickets to the September 22 Nebraska vs. Idaho State game and a pair of tickets to the November 10 Nebraska vs. Penn State game. Tailgate passes are included.

For more information and to register, click here.

 Winners will be notified on or before Monday, September 17.

For more information on ethanol promotions, FFVs, blender pumps, ethanol fuel and the Husker football tickets to be given away, visit the Nebraska Corn Board or Nebraska Ethanol Board booths in the exhibition building at the Nebraska State Fair.

Washington Adventure: The Conclusion

By David Bresel, NCGA-DC Intern

My Washington Adventure is now complete. I am back in Nebraska getting ready for my last year in law school to begin. It was an incredible journey this summer. I’m never going to forget the people I met and had the honor to work with.

Before I left Washington, I had a chance to work on a few more projects. One of those projects was the inclusion of Russia into the World Trade Organization. The repeal of the Jackson-Vanik amendment is currently going through the legislative process. If repealed it will allow fair and consistent trade policies between the US and Russia.

Another project I had a chance to work on was the California Labeling initiative. The California Genetically Modified Organism (GMO) labeling initiative has been assigned a ballot number for the November election. Proposition 37 continues to move one step closer to being voted on. This ballot proposition was created by activists who oppose modern farming techniques and a prominent trial lawyer who has made a fortune suing businesses under the bounty-hunter provision in California Proposition 65. The proposition would force family farmers, food producers and grocers to implement record keeping and labeling mandates that no other state or country requires. They’d be forced to keep special records for all food products they sell tens of thousands of products so they can prove whether or not their products contain GE ingredients in the event they are ever sued under the propositions “bounty hunter” lawsuit provision.

A coalition of organizations has created a grassroots campaign in an effort to educate and stop Proposition 37 from passing. The ultimate goal of the campaign is to educate the public on the benefits and advantages of GMO and to stop any further State regulations from making it onto the voting ballot. If the coalition and campaign is able to stop Proposition 37 in California it will most likely discourage other States from taking up the issue in the future.

Along with the projects that I had a chance to work on, I also was able to do some last minute sightseeing. One of my favorite things was seeing the Library of Congress. I am a big fan of history and reading so seeing all of the first edition books and historical documents that are featured in the library was awe inspiring. It is easy to look over museums in D.C. because there are just so many. But this is one museum that deserves every bit of good attention that it gets. It's truly a marvel of a place.

My time at the National Corn Growers Association has been an invaluable experience for me. I hope to use the opportunity that I’ve been given this summer to search for an agricultural career after I graduate from law school. My goal is to move back to Washington someday and help the agriculture community that has given me so much. I want to thank everyone who has helped me throughout this summer. Thank you to all of the lobbyist in the D.C. office, the staff in the St. Louis office, the U.S. Grains Council, and to the Nebraska Corn Board for all of your support.

The National Corn Growers Association office in Washington, D.C. is hosting David Bresel of Lincoln, Neb., as their summer intern supported by a partnership between Nebraska Corn Board and NCGA. David is a student in at the University of Nebraska College of Law. He will be involved with a variety of issues related to environmental regulations, transportation, free trade agreements, biotechnology, ethanol and energy.

Scheer elected chairman of Nebraska Corn Board

At its meeting earlier this week, members of the Nebraska Corn Board elected leadership for 2012-13.

Alan Tiemann (right) passes the gavel to new
Nebraska Corn Board chairman Tim Scheer.

Elected chairman was Tim Scheer, a farmer from St. Paul. Scheer represents District 5 for the Board and has been serving as a director since 2007. He previously served as vice chairman. Along with a farrow to finish hog operation, Scheer farms 800 acres, growing row crops and alfalfa, as well as a cow-calf and back grounding enterprise. He is a graduate of the Nebraska LEAD XXIV program.

Scheer takes over the chairmanship from Alan Tiemann, a farmer from Seward who had been chairman for three years. Tiemann has been serving as the at-large director for the Nebraska Corn Board since 2005.

The Board's vice chair is Curt Friesen, a farmer from Henderson. He represents District 3 for the Board and has been a director on the board since 2008. He previously served as secretary-treasurer.

The final officer elected was Dave Merrell, a farmer from St. Edward, as secretary/treasurer. Merrell represents District 7 and has been on the Board since 2006.

Crop update: Nebraska corn 31 percent good to excellent

In its weekly crop progress report today, the U.S. Department of Agriculture said 31 percent of Nebraska’s corn crop was in good to excellent condition as of August 12. This is down four points from our last update on July 30.

Nebraska corn in fair condition stood at 28 percent (unchanged from two weeks ago), while corn in poor to very poor condition stood at 41 percent (up 4 points from two weeks ago).

USDA said 86 percent of the state's crop is in the dough stage, up from 76 percent last week and well ahead of 51 percent last year and the five-year average of 58 percent.

Corn that was dented stood at 51 percent across the state, well ahead of last year's 7 percent and the five-year average of 14 percent. USDA said 6 percent of the state's crop is mature, up from 3 percent last week. None of the crop was mature by this point last year – or in the five-year average.

Early planting and the hot, dry weather is showing it's head in all these figures.

Nationally, 23 percent of the country's corn is in good to excellent condition, unchanged from last week but well below last year's 60 percent. Corn rated fair stood at 26 percent, compared to 27 percent last week and 25 percent last year, while 51 percent of the crop was rated poor to very poor, compared to 50 percent last week and 15 percent last year.

USDA said 78 percent of the country's corn crop was in the dough stage, well ahead of last year's 46 percent and the five-year average of 49 percent. Corn dented stood at 42 percent, compared to 14 percent last year and 16 percent for the average. USDA said 10 percent of the country's corn crop was mature, up from 6 percent last year and 3 percent on average.


This week's photos come from the Nebraska Corn Board's 2012 crop progress photo set at Flickr. The top photo was taken by the Imperial FFA chapter in late July and the bottom one by the Norris FFA chapter more recently that shows some corn harvested for silage.

With 147 bushel yield, Nebraska farmers may harvest 1.34 billion bushels of corn this year

Nebraska	Corn Production
Year	Production	Yield
2003	1,124,200,000	146
2004	1,319,700,000	166
2005	1,270,500,000	154
2006	1,178,000,000	152
2007	1,472,000,000	160
2008	1,393,650,000	163
2009	1,575,300,000	178
2010	1,469,100,000	166
2011	1,536,000,000	160
2012*	1,337,700,000	147
.	*Estimate

Nebraska corn farmers may harvest 1.34 billion bushels of corn this year on 9.1 million acres, for an average yield of 147.0 bushels per acre, the U.S. Department of Agriculture said in today's crop production report. The average yield last year was 160 bushels per acre.

If realized, an average yield of 147.0 bushels would be the smallest in the state since the 146 bushels per acre average in 2003 (table). However, production at 1.34 billion would be the sixth-largest on record for the state and comparable to the 1.39 billion bushels produced in 2006.

The harvested acres figure, at 9.1 million acres, is 500,000 less than what USDA estimated in June. It is also 500,000 acres less than what was harvested last year. The drought pushed some acres into silage instead of grain and others may be abandoned altogether.

While there is the possibility Nebraska's average yield could go lower, about 70 percent of the state's corn crop can be irrigated. Some farmers who irrigate estimate they will see yields of 200+ bushels on many of those acres.

Time will tell how well those acres do – and how the harvested dryland corn, which had to rely only on rainfall, shapes up.

Nationally, USDA said the country's corn farmers will produce 10.78 billion bushels on 87.36 million harvested acres, resulting in an average yield of 123.4 bushels per acre. This is down 13 percent from last year and the lowest since 2006. Yields, if realized, would be the lowest since 1995.

Harvested acres were reduced 1.5 million acres from the July estimate - but are still 3.7 million more than last year because farmers this year, responding to demand, planted the most acres in the United States since 1937.

As for the supply/demand picture, a summary below, provided by Kelly Brunkhorst at the Nebraska Corn Board, shows the extent of the changes from July to August, and compares the numbers to last year and 2010-11.

Considering the scope and breadth of the drought and corresponding heat this summer, it's really pretty amazing that the crop, if realized, will still be the eighth largest on record.

Garry Niemeyer, president of the National Corn Growers Association, noted that without advanced seed technology, including biotechnology and genetics that help plants use water more efficiently and better tolerate heat and other drought conditions, production losses may have been  much greater.
 
We won't know the full extent of the crop, of course, later this fall during harvest. 

Click for a larger image.

Globally, USDA cut total grain output 2.9 percent, total grain supply 2.1 percent and grain ending stocks 4.3 percent. However, 2012-13 global grain production may still be the second-largest on record.

Podcast: Farmers urged to be safe while cleaning out grain bins

In this podcast, Kelsey Pope, director of advocacy and outreach for the Nebraska Corn Board, talks about some of the ways grain bins can be dangerous for farmers and farm workers.

She notes that this is important because many farmers unload and clean out of grain bins during the summer months. During this process, farmers can come across several hazardous situations that can have a disastrous outcome.

"When it comes time to empty and clean out your bin, please take extra precautions and use the buddy system to help keep everyone safe," Pope said. "Always have at least one other person on site who knows the safety rules, how to shut down augers and other equipment and how to get help if it’s needed."

For more, click the icon above.

For a grain bin safety video and additional information, click here.

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

Grains Council meeting focuses on future

The U.S. Grains Council held the 52nd Annual Board of Delegates meeting in Vancouver, Washington last week.

Although it is easy to talk about the challenges, issues and the big topic in the room – drought – the Council is really focusing on the goals ahead for the future.

One of the discussion points included transportation – specifically water transportation in the Pacific Northwest (PNW). Kristin Meira with the PNW Waterways Association – an organization that is an advocate for transportation/navigation funding, policies and issues – spoke on the positive current river system completed project. The PNW accounted for 26% of the grain exports in 2011 in the U.S. She explained that the Columbia Snake River system is 110 miles of deep draft channel 43 foot channel depth (recently deepened through a dredging project) extends 365 miles inland. They have eight locks which keeps 700 trucks off of the highways and has brought in a lot more terminal use and rail investments.

During a tour conference participants were able to see the PNW waterways in action by visiting two grain river ports which unloaded grain through rail or barges onto large vessels in the Columbia River. One facility was new as of February and they use robotics to unload trains and load vessels with grain. This is important to Nebraska corn farmers because a majority of the corn being exported is sent through the PNW and out of ports like these to Asia. We were also able to see the tallest grain silo in the U.S. which is the second tallest in the world.

My role in the meetings was involvement in the Membership/Communication Action Team where we discussed the best membership structure for the corn, sorghum and barley checkoff groups, as well as agribusiness and general farm organization sectors. Communicating the issues of the drought with our international customers is going to be an upcoming priority to explain corn crop quality and quantity with our buyers of grain.

My main six takeaways are listed here:

1. China's grain storage is at an all-time low and increasing commercial high end poultry production. This is projected to provide long-term demand for corn.
2. Vigilant focus on the implementation of FTAs (Korea, Panama, Colombia) and TPP negotiations.
1. Japan will go forward with TPP, but may take until 2013 until it happens and will probably be 2014 when it is finalized.
3. Overarching issue of funding - FMD/MAP
4. Ethanol capacity and demand has peaked in the last three years
1. Where will the excess corn go? Export market.
5. The most populated areas in the world aren't using GMO. Good for US because we can export to those areas, but a tough challenge with increasing population.
6. Food 2040 is focusing on the increasing middle class: Affluent Asian consumers will drive global demand.

Lastly, during the meeting, members voted in a new slate of board of directors, selecting Don Fast, farmer from Montana, as Chairman.

"All of us understand that 95 percent of the worlds people live outside the United States, and that many of them are making great strides economically. Our world is getting smaller and our markets are getting bigger,” Fast told attendees of the conference.

"That's the reality we face and that's what we've chosen as our theme for the coming year, 'Smaller World, Bigger Markets.' We have a lot of work to do, it will be a challenging year...but the strategic situation hasn't changed."

Nebraska ethanol producers operating at reduced capacity

Nebraska's ethanol plants are operating at approximately 70 percent of capacity, well below near 100 percent levels in 2011, according to estimates provided by the Nebraska Ethanol Board.

Nebraska ethanol plants produced more than two billion gallons of ethanol from corn last year.

Nationally, production is down about 20 percent since the beginning of the year and is at a two-year low.

The Nebraska Ethanol Board noted that ethanol producers are responding to a changing market as drought conditions impact 2012 crop forecasts and corn prices reach record levels.

"This slowing of production is a natural response to drought related market forces and will not preclude the industry from achieving Renewable Fuel Standard (RFS) benchmarks," according to Steve Hanson, board chairman.

He said higher than normal ethanol stocks and a large number of existing RIN credits for U.S. refiners combine to make RFS achievable well into 2013. Fuel blenders get RINs (Renewable Identification Numbers) when they use more renewable fuels than required – and estimates are that there is a surplus 2.5 billion RINs available, and if fuel blenders need more they can carry a deficit of RINs into the next year.

Hanson said waiving the RFS would have little effect on the corn availability, citing a recent study by the Center for Agriculture and Rural Development. That analysis concludes a total waiver of RFS would reduce corn prices by less than 5 percent and force only a 5 percent reduction in ethanol production.

"The RFS was created to reduce U.S. petroleum imports and it has done so very effectively," Hanson said. "In 2011, 14 billion gallons of domestically produced ethanol replaced 13 percent of oil imports and reduced the nation's trade deficit by $50 billion. For the first time in decades, less than half of U.S. petroleum demand was imported. In addition, Nebraska motorists saved more than $50 million in fuel costs due to the lower price for ethanol fuels."

Hanson also noted that the reliable supply of high protein distillers feed produced at Nebraska ethanol plants is an important component of livestock feed supplies in Nebraska.

The release included a reference to a study conducted by Dr. Ken Lemke, chief economist at the Nebraska Public Power District (NPPD). It said 7,700 Nebraskans are employed directly and indirectly as a result of the ethanol industry, and that it contributes more than $50 million dollars in tax revenues to state and local governments and $250 million is added to household incomes in the state.

Podcast: We’re spending 30 percent less of our money on food today than 30 years ago

In this podcast recorded in July, Steve Nelson, a farmer from Schuyler and a member of the Nebraska Corn Growers Association, discusses a report from National Public Radio’s Planet Money that noted Americans are spending less today on food than they did 30 years ago.

Using Bureau of Labor Statistics numbers, Planet Money pointed out that in 1982 Americans spent nearly 13 percent of their money on groceries. Thirty years later, in 2012, Nelson said, we spent less than 9 percent of our money on food.

That’s a 30 percent decrease in what we spend on food over a 30-year period.

This is a significant decline that comes even though the price of oil and other energy costs are so much higher. Nelson noted that energy costs have a significant impact on food prices but the efficiency and production of farmers and food producers have overcome it over time.

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

How global our industry has become

By Jessica Clowser, USMEF Intern
Wow, it’s hard to believe the end of July has arrived! This summer has truly flown by. My time at USMEF has definitely opened my eyes and allowed me understand how truly global our industry has become. Agriculture is excitingly unique from an international standpoint. The U.S. stands behind a safe, wholesome, delicious product which has allowed us to maximize profitability from our numerous export markets. USMEF is totally committed to providing the world with high quality, U.S. red meat.

This past week, I had the opportunity to sit in on the Joint International Markets Committee Meeting at NCBA’s (National Cattlemen’s Beef Association) midyear meeting held in Denver. The International Markets Committee’s primary focus and responsibility is international trade policy and market development. USMEF and the International Markets Committee work closely with one another, developing markets and funding international programs.

USMEF, Phil Seng, addressed the committee and spoke on the tough agricultural climate facing both international and domestic markets in terms of the current drought conditions. However, Mr. Seng did highlight the growing Chinese Middle Class and explained the relationship between China and U.S. is more and more important to the future of U.S. read meat exports. If U.S. pork and beef can break into the Chinese market, the financial reward will be monumental. Since December, 2003, international consumption of U.S. beef has steadily progressed and Mr. Seng stressed the importance of eradicating trade barriers to intensify this progression.

Even though beef prices have been, more or less depressing, there is a silver lining. For every fat steer harvested in the United States, $350 goes back to the producer as a result of export markets. This number represents muscle meats, variety meats, hides, etc. Mr. Seng also explained markets are evolving and brand differentiation is key to maximizing profits in these developing markets.

Throughout the last two weeks, I have been extremely busy with USMEF’s Pork Variety Meat Booklet project. I traveled to Evans, CO and collected numerous pork variety meats at Innovative Foods, a local meat locker who works closely with Colorado State. A grad student form CSU and myself were right there on the kill floor, collecting hearts, livers, stomachs, tongues, whole heads, etc. Cleaning out the stomachs and intestines definitely made sure my gag reflexes were working properly. After collecting the variety meats, we then traveled to CSU and cleaned, and prepared the product for the photographer. These photos will be vital to USMEF’s international markets that request U.S. pork variety meats. They will have the opportunity to see exactly what U.S. packers/processers send to their various markets.

Stomach, hearts, spleen, tongue, leaf fat, cheek meat, kidneys, and liver.

As I wrap up my last blog, I want to once again, thank the Nebraska Corn Board for funding this amazing internship. It has truly been a privilege to work at the world headquarters for the U.S. Meat Export Federation. The opportunities I have participated in and the contacts I have made will only benefit me in my future endeavors and I am so grateful for this opportunity.

I am excited to announce I was accepted into Oklahoma State’s Ag Econ Graduate program – let the next adventure begin!


The U.S. Meat Export Federation is hosting Jessica Clowser of Seward, Neb., as their first summer intern supported by a partnership between the Nebraska Corn Board and USMEF. Jessica graduated from the University of Nebraska-Lincoln in December 2012 with a B.S. in Animal Science and recently returned from a semester internship with Nebraska Senator Mike Johanns in Washington, D.C. In Denver, Jessica will be assisting with promotions and international relationship opportunities.

Staff Update with Kim Clark

It's been a while since we've done a Staff update but here is the newest one. This week Kim Clark talks to us about the blender pump grants that the Nebraska Corn Board has available to retailers! For more information visit www.Nebraskacorn.org

 

Conclusions

By James Keating, U.S. Grains Council Intern

As I finish out the last few weeks of my internship with the U.S. Grains Council I am uncertain about the impact it will have on my professional life in the long run. In the short-term, I know my friends, peers, and various professionals connected to the grains industry will constantly throw questions at me in order to probe my experience. To be honest, I am not sure what my responses will be but typical when I try to explain things regarding a specific experience my “go-to” play is to bombard asking parties with metaphors.

Entering undergrad I quickly realized that high school had done little to prepare me for college life. That isn’t a knock against my high school or the high schools complex in general; it is just a simple fact. Sure my teachers discussed what college work will be like, what professors expect and so on, but the reality is you just simply can’t acquire experience through second-hand discussion. High schools now incorporate distance learning and other types of courses that students can take for college credit, these courses have the aim of allowing students to gain direct “college” experience, but even that impact is minimal at best. No amount of distant learning classes can possibly prepare students for all the complexities of social and professional life at the university level, you just have to jump into the deep-end and paddle for life until you figure out how to swim, and the sad reality is that a major portion of the population drowns trying or never even jumps in. My point is, maybe high school gave me the skills to do the doggy paddle, but I certainly didn’t enter undergrad doing the butterfly Michael Phelps style. I would use the same metaphor to explain the transition from undergrad into the professional work force.

Sure my college coursework forced me to acquire the skills to know how to research, think critically and to talk for days about various political issues like human rights, politics in Latin American, international relations, etc… but there was no “U.S. Grains Council” course I could have enrolled in to gain experience, I had to just jump in and do my best in an unfamiliar environment. It is like playing minor league baseball for a few years and now all of sudden I have to try to play every day in the big leagues. My point being that the potential is there, but it is raw talent and the unfortunate consequence is that weaknesses will be exposed and you are bound to fail along the way no matter how much hype there is. Of course I wish I could say I hit everything out of the ballpark, and perhaps my naivety let me think that was a possibility.

Sure I made a few great plays, but I certainly had some errors that have highlighted holes in my game, and to be honest, that is without a doubt the most rewarding part about an internship. I will return to the University of Nebraska-Kearney for my final semester with a really great understanding of what areas I have to improve on if I want to be a mainstay in the “big leagues”.

P.S. Being my last blog post as USGC/NCB intern, I have to take a moment and express gratitude towards the people who have made this rewarding experience possible. First of all, the Nebraska Corn Board’s commitment to young people is outstanding. They have sent interns over the years to various cooperators who have nothing but great things to say about their Nebraska interns. The NCB takes extremely good care of their aspiring young professionals. In conjunction, the U.S. Grains Council allowed me to join their ranks out of good faith and I will always have nothing but good things to say about all of my colleagues and I will think fondly about many of them for the rest of my life. USGC both praised me in good times but has allowed me to see areas that I need to improve before I am ready for the real world and that is the greatest part about this experience. I wish I could say I hit a home run for them every time, but just letting me be a part of their team was big leap forward for me and my career aspirations.
  

The U.S. Grains Council is hosting James Keating of Ogallala, Neb., as their first summer intern supported by a partnership between the Nebraska Corn Board and USGC. James is a senior in political science at the University of Nebraska – Kearney. He will be working with policy, assisting with international trade teams and helping to develop promotions and international relations.