The 2016 FEW in Milwaukee was invigorating, exhausting, stimulating and overwhelming. So many people to visit, so much to learn. One conversation set me back a bit. A consultant working with some of the really big players in the industry sought me out and asked for my thoughts on a pretty far-reaching question: what is the ethanol industry going to look like in 20 or 30 years?
Why ask me? I said.
You talk to a lot of people, he said.
That I do. Over the years, I&rsquo;ve interviewed a lot of experts. In comparison to those experts, I know little, but I have learned a great deal that leads me to be very optimistic about the future. Ethanol is not going anywhere but up and corn yields will continue to advance. Of course, that won&rsquo;t be a straight line trajectory in either case. Both are commodities that will continue to see cyclical markets affecting short-term production. The long-term trends will stay strong for both, I believe.
We learned from multiple speakers at FEW that E15 is making inroads. Prime the Pump is targeting the top 30 convenience store chains that have the potential of adding nearly 800 million gallons of ethanol demand annually just from E15. That&rsquo;s as much as the export market consumed last year. Other speakers were talking about auto industry studies finding E30 will be the sweet spot for getting the needed power and fuel economy from the smaller engines that will be needed to meet the ambitious CAFE standards. Much of the infrastructure being put in place now will be able to handle those midlevel blends.
These current observations reinforce a long-term EIA outlook from a couple of years ago that projected oil will be high-priced in the decades ahead&mdash;well over $200 a barrel. At the same time, the agency projected the price of ethanol will be comparable to the top levels we&rsquo;ve seen in recent years, and nothing like the price growth expected for oil. If those projections hold true, price will favor ethanol over oil in the long-term.
Big corporations looking at long-term investments need to stay engaged. Things will change, of course. Producers will adapt to changing markets, seeking greater diversity as well as better efficiency, but ethanol is not going away.
Nor is corn. There will continue to be plenty of corn as yields trend higher. The potential for impressive growth is demonstrated by contest winners who get better than three times the national average yield. One speaker at Ethanol 101 pointed out that when you add the DDGS production to the USDA numbers for corn used for feed, there is more feed available today than before the ethanol buildout in the early 2000s.
I do envision agriculture changing, however. Already, I&rsquo;m reading that extension specialists suggest farmers reconsider putting expensive inputs on less productive land. Farmers will get a better return on their crop investment by focusing on the better parts of fields for the expensive crops like corn.
I don&rsquo;t remember if those sample crop budgets recommended crops to grow on the poorer land, but I predict that someday down the road, farmers will be raising biomass crops on their poorer ground&mdash;switchgrass, miscanthus, biomass sorghum, legumes or other crops. Not only are perennial grasses and legumes known soil builders, but crop rotations with grasses and perennials help with weed control as well.
Part of the equation, of course, is that there will be a market for that biomass in the ethanol producers who add cellulosic ethanol capabilities in the future. The interest is there. The cellulosic panels at the conference are well-attended. The industry is watching, listening and learning. The beauty of cellulosic, of course, is that it can utilize all sorts of biomass and municipal solid waste, bringing the economic development opportunity the Corn Belt has experienced to the entire country.
How soon cellulosic ethanol will become mainstream is hard to predict. The challenge of getting the first-of-their-kind cellulosic plants up and running is not lost on anyone. But when you talk privately to some of the individuals working on those projects, you learn they have full confidence those challenges will be met. &nbsp;&nbsp;
New technologies, new industries and new crops take way more time to develop than just five years. In the early 1980s I wrote about canola--a new crop being introduced in North Dakota. It had been developed a few years earlier by Canadian researchers who bred the edible oil crop from the industrial rapeseed. The first Canadian canola variety was released in 1974 and the first crushing plant built in 1975. It took more than 30 years for canola to become an established crop on part with wheat in North Dakota and the Canadian prairie provinces with regional processing facilities and well-established markets.
It has taken just as long for corn ethanol to become the established industry it is today. Developing biomass crops and infrastructure will take time, but the industry has a leg up in that corn ethanol paved the way for cellulosic ethanol, and together they will expand the market for renewables. &nbsp;

Optimism about the future of corn ethanol, corn farming and cellulosic ethanol is grounded in understanding past and current trends. 

Blog: FEW question leads to ruminations on the future

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Upcoming Events

2024 International Fuel Ethanol Workshop & Expo

Biodiesel Summit: Sustainable Aviation Fuel & Renewable Diesel

Carbon Capture & Storage Summit

North American SAF Conference & Expo

2025 International Biomass Conference & Expo

Blog: FEW question leads to ruminations on the future