Posted Oct. 11, 2010 

 
 CHICAGO - U.S. farmers will continue to produce an abundance of food and feed for both the domestic and international markets. This was an often repeated message at the Export Exchange, a conference focused on connecting international buyers of U.S. distillers dried grains with solubles (DDGS) and coarse grains. "This year the U.S. exported 54 million tons of corn, sorghum and barley, valued at about $8.6 billion," said Daniel Keefe, manager of international DDGS operations for the U.S. Grains Council. "And, about 9 million tons of corn products mostly from ethanol production valued at over $1.5 billion."
 
 The conference, held Oct. 6 through Oct. 8 in Chicago, attracted nearly 500 attendees, including 170 buyers from 33 foreign countries. The U.S. Grains Council and the Renewable Fuels Association teamed up to host the conference. 
 
 The message remained the same Oct. 8, despite the newly revised numbers forecasting a dramatic decrease in world global coarse grain supplies. In the U.S., corn yield forecasts were cut to 155.8 bushels an acre, down significantly from September's prediction of 162.5 bushels an acre. In the EU, coarse grain yields have been reduced by 15 percent to the smallest level in more than 10 years. 
 
 Thomas Dorr, president and CEO of U.S. Grains Council, said the short-term effect will be on price. "Yes, we're going to have some challenges and yes, we're going to have some sleepless nights over the next couple weeks," he told EPM. 
 
 In the long term, however, U.S. farmers will do what they have always done—respond to marketplace signals and produce an adequate supply of corn. Dorr also pointed out that the newly forecast numbers are still above what was produced in a recent record year. In 2008, the U.S. had a corn yield of 12.1 billion bushels with an average yield of 153.9 bushels per acre. The forecast for 2010 is 12.7 billion bushels with an average yield of 155.8 bushels per acre. 
 
 Erick Erickson, special assistant for planting evaluation and projects for the U.S. Grains Council, also pointed to corn producers' past performance as well as an "explosion" in yield technology. This isn't the first time concerns have cropped up about U.S. producers' ability to produce enough feed and food at home and abroad and those concerns were proved baseless. One example was in 2006 when the ethanol industry was expanding. "Some analysts believed that the U.S. would become a net importer of corn to feed ethanol production," he said. 
 
 Ethanol is the second largest market for U.S. corn, said Bob Dinneen, president and CEO of RFA. What people don't think about, however, is that one-third of that corn comes back out of the ethanol plant as feed in the form of DDGS, plus some corn gluten feed and corn gluten meal. In fact, the amount of DDGS produced in the U.S. in 2009 was equal to the amount of feed fed to cattle at U.S. feedlots last year. 
 
 Ankush Bhandari, director of economic research for Gavilon LLC, told attendees that this year, for the first time, DDGS imports are on track to actually exceed exports of soybean meal. "This is a tremendous sustainable feed source that is doing some remarkable things not only domestically but internationally," he said. 
 

 Another topic of concern was regulatory hurdles facing the ethanol industry. Geoff Cooper, vice president of research for RFA, pointed to the Volumetric Ethanol Excise Tax Credit as one of the "watershed policies" that has helped the industry grow. It's a crucial time, as the industry waits, not knowing if the tax incentive will be extended before it expires at the end of the year. "The next six months may be the most critical in the history of the industry," he said. 
 
 Jim Allwood, senior vice president and director of energy services for Informa Economics Inc., said he's been hearing more "apprehension that VEETC will be extended in a timely fashion." Current U.S. policies just aren't encouraging growth in biofuels. "Policy-wise, biofuels, in my opinion, is at a crossroads," he said. 
 
 RFA can only "hope desperately" to get VEETC extended during the lame duck session, Dinneen said. The next critical policy issue is E15, Dinneen said. Again Dinneen spoke out against approving E15 only for newer model vehicles, pointing to Brazil as an example of a country that has been using higher levels in its vehicles for years. Approving E15 only for newer vehicles will cause confusion in the marketplace and delay acceptance of the new fuel. "EPA needs to make these fuels available to all vehicles, period," he said. 
 
 Theoretically, if E15 is only approved for model year 2007 and newer, the maximum impact it will have on the ethanol industry is a market for an additional 1.5 billion gallons of ethanol, he added. If E12 is approved for all vehicles, that's only 1.8 billion gallons. If however, E15 is approved for all vehicles, it means a maximum impact of 6.5 billion gallons. 
 
 On the DDGS side, with E10 the maximum yearly production is 33.1 million metric tons yearly, Dinneen said. If E15 is approved only for model year 2007 and newer vehicles, however, it only provides a maximum of 37.2 million metric tons. E12 would add up to 38 million metric tons while E15 for all vehicles would mean 51 million metric tons.

Export Exchange conference zeros in on supply

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Export Exchange conference zeros in on supply.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

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

Export Exchange conference zeros in on supply