FEW general session features Growth Energy, NCGA speakers

By Holly Jessen | June 10, 2014

Attendees of the 30th anniversary International Fuel Ethanol Workshop & Expo heard from Tom Buis, CEO of Growth Energy, and Rick Tolman, CEO of National Corn Growers Association, during the general session held June 10 in Indianapolis.

In his keynote speech, Buis talked about the difference between last year and this year. The U.S. had just weathered the worst drought in its history, ethanol plant margins were in the red, fuel consumption was down, exports were down, imports were up and the critics were working to repeal the renewable fuel standard. “Things changed in a year’s time,” he said. “Margins have improved significantly, imports have declined, exports increase, fuel consumption has increased, the DDG market has improved, our nations’ corn farmers produced an all-time record corn crop last year and are about to produce another projected record corn crop this year.”

Efforts to bring E15 to consumers are ongoing, with the fuel now offered in 15 states. But work must continue to install infrastructure to bring the fuel to consumers. “Helping retailers is really the key,” he said, mentioning Prime the Pump, which he called an ambitious program to speed up that process, and other efforts underway by the Fuels America coalition. He then gave those in attendance a call to action. “It takes human resources, it takes financial resources,” he said. “We need everyone in this room to join in. Times are good in the industry right now so join the effort.”

The industry is in the midst of a fight for market share and it won’t win that fight simply on the merits of being right. The fight must be waged on multiple fronts, including policy, federal and state regulations, public relations, occasional court battles and politics, he said. He also challenged members of the ethanol industry to do a better job of stepping up by speaking to legislators and asking them for a commitment to the ethanol industry. “If we do all our work in those areas, the policy, the regs, the legal, the, PR, the politics, we’re going to win this fight,” he said. We’re going to win this fight. It’s not going to be easy but we’re going to win it.”

There are barriers facing the industry, of course. One major barrier is the Reid Vapor Pressure waiver for E10 during the summer driving season while E15 does not have a waiver. And the reality is, a Congressional answer to the issue isn’t likely, since republicans and democrats can’t agree on the day of the week. “We’re in that political silly season, which seems to be 24/7,” he said.

Next, Tolman, who will retire from NCGA this fall, spoke about the state of American corn farming. He gave a variety of statistics intended to illustrate the health of the corn industry. Last year the industry harvested 87.7 million acres and produced a record crop of 13.9 billion bushels that was valued at more than $61 billion bushels with an average price per bushel of $4.40.

One point Tolman hit hard was the contribution of distillers grains to the feed equation. Although many people are misinformed about this, when distillers grains are added back into the amount of corn going into the feed market, as it should be, it clearly is not true that more corn is used to make ethanol than is used as feed. “I don’t think I can overemphasize this point,” he said. In fact, when distillers grains are added back into the feed column, 44 percent goes for feed use while ethanol’s share of the corn pie is 26 percent. “Clearly we are still using more corn for feed than we are for fuel,” he said. “We haven’t taken anything away from feed use. We are taking the increase in (corn) productivity for ethanol but we still are using as much as we ever had for feed use.”

He also touched on corn export markets, which are topped by Japan in the No. 1 spot, Mexico at No. 2 and China at No. 3. However, China is an inconsistent customer that previously put in place a defacto ban on U.S. corn due to the biotech issue and, within the last few days, also put a defacto ban in place on U.S. distillers grains.

Tolman then looked back at the history of corn farming, revealing that when 1980 is compared to 2011 the corn industry is using 30 percent less land, reduced soil loss by 67 percent, cut back on water use by 53 percent, reduced energy use by 43 percent and cut greenhouse gas emissions by 36 percent. “That story will continue to get better and better,” he said. “I’m optimistic about the state of corn farming.”