freeimages.comADM warned over prospects for ethanol production margins, even though it credited biofuel with helping its profits.From WATTAgNet:
Archer Daniels Midland (ADM) reported higher quarterly earnings, but revenue fell short of expectations.
ADM reported net earnings of $701 million, or $1.08 per share, in the quarter ended December 31, up from $374 million, or 56 cents a share, a year earlier. Revenue fell to $20.89 billion from $24.14 billion, short of the consensus expectation of $23.85 billion.
The company said it would raise quarterly cash dividends by 17 percent in 2015 to 28 cents per common share and was targeting share repurchases of between $1.5 billion and $2 billion. It earmarked 2015 capital expenditures of $1.1 billion to $1.3 billion.
ADM warned over prospects for ethanol production margins, even though it credited its operations in biofuel with helping its profits.
"Margins in this industry should remain challenged until supplies are better aligned with demand," said ADM’s CEO Juan Luicano.
In other ADM news, the company announced that it has reached an agreement to sell to Glencore P.L.C. a 50 percent stake in its export terminal in Barcarena, in northern Brazil. The ADM-Glencore joint venture that will own and operate the facility following the transaction also plans to quadruple the terminal’s capacity from 1.5 million metric tons to 6 million metric tons.
Showing posts with label US Ethanol Industry. Show all posts
Showing posts with label US Ethanol Industry. Show all posts
Wednesday, February 11, 2015
ADM reports higher earnings, warns over ethanol
Wednesday, September 17, 2014
Royal DSM, POET open ethanol plant in Iowa
POET-DSM Advanced Biofuels LLC, a joint venture of Royal DSM and POET LLC, recently celebrated the grand opening of its first commercial cellulosic ethanol plant in Emmetsburg, Iowa.
The plant, named Project Liberty, converts baled corn cobs, leaves, husk and stalk into renewable fuel. The plant has now officially started up, processing its first batch of biomass into cellulosic ethanol and is moving forward toward continuous operation. At full capacity, it will convert 770 tons of biomass per day to produce ethanol at a rate of 20 million gallons per year, later ramping up to 25 million gallons per year.
The plant’s grand opening was attended by dignitaries including Willem-Alexander, King of the Netherlands; Tom Vilsack, U.S. Secretary of Agriculture; Michael Knotek, deputy undersecretary of the U.S. Department of Energy; Iowa Gov. Terry Branstad and Iowa Lt. Gov. Kim Reynolds.
Assuming the Renewable Fuel Standard (RFS) continues in the United States and depending on the adoption rate of cellulosic ethanol both in and outside the United States, POET-DSM Advanced Biofuels LLC has the potential to achieve net sales of about $250 million from bio-ethanol and license income by 2020 with EBITDA margins clearly above average.
The State of Iowa has contributed to make Project Liberty a reality by contributing $20 million in grants for capital costs and feedstock logistics. USDA invested $2.6 million to support the delivery of more than 58,000 dry tons of corn crop residue, helping establish the feedstock logistics network.
Wednesday, December 4, 2013
US corn market focusing on January 2014 estimate, ethanol production
The recent corn market commentary has been dominated by two themes, according to University of Illinois agricultural economist Darrel Good. One is that the U.S. Department of Agriculture's production estimate, to be released in January 2014, will be larger than the November forecast. The second is that corn consumption for ethanol production will be negatively impacted if the U.S. Environmental Protection Agency's preliminary rule making for the Renewable Fuels Standards (RFS) for 2014 is actually implemented. Good said that both of these expectations are questionable.
Production estimates"Any change in the January corn production estimate from the November forecast would be the result of a change in either, or both, the estimate of acreage harvested for grain or the U.S. average yield," said Good. "The November National Agricultural Statistics Service (NASS) planted acreage estimate was fully consistent with the USDA's Farm Service Agency (FSA) report of planted acreage. Over the previous 10 years, the January U.S. average yield estimate was above the November yield forecast five times and below the forecast five times. Even in the five years when the November yield forecast exceeded the September forecast, as it did this year, the January estimate was below the November forecast twice. Considering the previous 30 years, the January yield estimate was above the November forecast 16 times and unchanged or lower 14 times," he said.
Good said that historically, the January corn production forecast was more heavily influenced by changes in acreage estimates than is currently the case because administrative data (primarily FSA-certified acreage data) were not fully incorporated in the NASS estimates until then. More recently, that data have been incorporated in the October production forecast (November in 2013). In the six years since 2003, in which the January production estimate exceeded the November forecast, the difference exceeded 80 million bushels of corn only in 2009 (230 million bushels). In the four years when the January production forecast was smaller than the November forecast, the difference ranged from 93 million to 210 million bushels.
Ethanol productionIn preliminary rule making for 2014 announced on November 15, the EPA proposed to effectively reduce the mandate for renewable biofuels (primarily corn-based ethanol) in 2014 from the statutory requirement of 14.4 billion gallons to 13 billion gallons.
"Some have interpreted this to mean that, if implemented, the rules would result in less corn consumption for ethanol production during the current marketing year than would have otherwise occurred," said Good. "That may or may not be the case. Without a change in the rules, blending of ethanol in the domestic motor fuel supply during the 2013-2014 corn-marketing year would still have been limited by the 10 percent blend wall and consumption of relatively small quantities of higher blends. Domestic consumption would have been well short of 14.4 billion gallons and maybe less than 13.3 billion gallons.
"The proposed change in the RFS mandate does not necessarily substantially alter prospects for domestic ethanol consumption during the current corn-marketing year," said Good. "However, as pointed out two weeks ago, domestic ethanol consumption and production will be influenced by factors beyond the mandate. In particular, consumption will be influenced by the extent to which mandates are met with physical blending versus the use of Renewable Identification Numbers (RINs) stocks."
Ethanol production will also be influenced by changes in stocks of ethanol and by the magnitude and direction of net-ethanol trade, said Good. "With stocks at a four-year low, further reductions may be small," he said. "U.S. ethanol is also expected to experience a positive trade balance in the year ahead. Taken together, these factors suggest that prospects for corn consumption for ethanol production are still near the 4.9 billion bushels projected by the USDA."
Corn market functioning as needed"Without a meaningful increase in the U.S. production estimate in January, corn prices appear low enough to encourage the increase in consumption made possible by the large 2013 crop," said Good. "U.S. corn is competitive in the world market, domestic livestock production has been returned to profitability, and ethanol production margins are large. As a result, export and export sales have accelerated, domestic livestock production is expanding, and ethanol production has rebounded. The corn market appears to be functioning as needed, with one exception: The large carry in the futures market price structure encourages carrying unneeded inventory into the next marketing year and also encourages producers to maintain large corn acreage in 2014."
Production estimates"Any change in the January corn production estimate from the November forecast would be the result of a change in either, or both, the estimate of acreage harvested for grain or the U.S. average yield," said Good. "The November National Agricultural Statistics Service (NASS) planted acreage estimate was fully consistent with the USDA's Farm Service Agency (FSA) report of planted acreage. Over the previous 10 years, the January U.S. average yield estimate was above the November yield forecast five times and below the forecast five times. Even in the five years when the November yield forecast exceeded the September forecast, as it did this year, the January estimate was below the November forecast twice. Considering the previous 30 years, the January yield estimate was above the November forecast 16 times and unchanged or lower 14 times," he said.
Good said that historically, the January corn production forecast was more heavily influenced by changes in acreage estimates than is currently the case because administrative data (primarily FSA-certified acreage data) were not fully incorporated in the NASS estimates until then. More recently, that data have been incorporated in the October production forecast (November in 2013). In the six years since 2003, in which the January production estimate exceeded the November forecast, the difference exceeded 80 million bushels of corn only in 2009 (230 million bushels). In the four years when the January production forecast was smaller than the November forecast, the difference ranged from 93 million to 210 million bushels.
Ethanol productionIn preliminary rule making for 2014 announced on November 15, the EPA proposed to effectively reduce the mandate for renewable biofuels (primarily corn-based ethanol) in 2014 from the statutory requirement of 14.4 billion gallons to 13 billion gallons.
"Some have interpreted this to mean that, if implemented, the rules would result in less corn consumption for ethanol production during the current marketing year than would have otherwise occurred," said Good. "That may or may not be the case. Without a change in the rules, blending of ethanol in the domestic motor fuel supply during the 2013-2014 corn-marketing year would still have been limited by the 10 percent blend wall and consumption of relatively small quantities of higher blends. Domestic consumption would have been well short of 14.4 billion gallons and maybe less than 13.3 billion gallons.
"The proposed change in the RFS mandate does not necessarily substantially alter prospects for domestic ethanol consumption during the current corn-marketing year," said Good. "However, as pointed out two weeks ago, domestic ethanol consumption and production will be influenced by factors beyond the mandate. In particular, consumption will be influenced by the extent to which mandates are met with physical blending versus the use of Renewable Identification Numbers (RINs) stocks."
Ethanol production will also be influenced by changes in stocks of ethanol and by the magnitude and direction of net-ethanol trade, said Good. "With stocks at a four-year low, further reductions may be small," he said. "U.S. ethanol is also expected to experience a positive trade balance in the year ahead. Taken together, these factors suggest that prospects for corn consumption for ethanol production are still near the 4.9 billion bushels projected by the USDA."
Corn market functioning as needed"Without a meaningful increase in the U.S. production estimate in January, corn prices appear low enough to encourage the increase in consumption made possible by the large 2013 crop," said Good. "U.S. corn is competitive in the world market, domestic livestock production has been returned to profitability, and ethanol production margins are large. As a result, export and export sales have accelerated, domestic livestock production is expanding, and ethanol production has rebounded. The corn market appears to be functioning as needed, with one exception: The large carry in the futures market price structure encourages carrying unneeded inventory into the next marketing year and also encourages producers to maintain large corn acreage in 2014."
Wednesday, January 30, 2013
Corn shortage prompts ethanol plant to suspend production
An ethanol plant in Macon, Mo., is suspending production February 1 because the extended drought has made it almost impossible to get enough corn to make the fuel, a plant spokesman said January 25.
POET Biorefining plans to keep its Macon facility open and all 44 employees will keep working, spokesman Matt Merritt said. The company plans to move ahead with $14.5 million in plant upgrades, and workers will use the down time to help with some of the upgrades.
"There's just really no corn in the immediate [Macon] area available," Merritt told the Associated Press. Shipping in corn from elsewhere wasn't an option because of the cost. Merritt added that POET will continue to purchase corn for future use when it becomes available. There is no timetable for when production will resume.
POET operates 27 plants in seven states and is based in Sioux Falls, S.D. The Macon plant has been in operation since 2000.
POET Biorefining plans to keep its Macon facility open and all 44 employees will keep working, spokesman Matt Merritt said. The company plans to move ahead with $14.5 million in plant upgrades, and workers will use the down time to help with some of the upgrades.
"There's just really no corn in the immediate [Macon] area available," Merritt told the Associated Press. Shipping in corn from elsewhere wasn't an option because of the cost. Merritt added that POET will continue to purchase corn for future use when it becomes available. There is no timetable for when production will resume.
POET operates 27 plants in seven states and is based in Sioux Falls, S.D. The Macon plant has been in operation since 2000.
Friday, January 4, 2013
US ethanol producers diversifying to boost profits
U.S. ethanol producers are beginning to diversify in an effort to boost profits as demand for their fuel drops, and they are looking to use corn in ingredients for products ranging from baked goods and nutrition bars to industrial coatings to fish food.
The Energy Information Administration has forecast that U.S. consumption of ethanol will rise less than 1 percent in 2013, to 12.9 billion gallons. Meanwhile, the $40 billion ethanol industry has seen its profits drop twice in four years. Ethanol makers were increasing profits by boosting production capacity to keep up with government requirements for billions of gallons of biofuels to be blended into motor fuel, but now supplies are up and demand is stagnating.
Poet LLC and Green Plains Renewable Energy Inc. are among the corn-based ethanol producers that are turning their facilities into refineries capable of creating specialized products alongside ethanol.
The Energy Information Administration has forecast that U.S. consumption of ethanol will rise less than 1 percent in 2013, to 12.9 billion gallons. Meanwhile, the $40 billion ethanol industry has seen its profits drop twice in four years. Ethanol makers were increasing profits by boosting production capacity to keep up with government requirements for billions of gallons of biofuels to be blended into motor fuel, but now supplies are up and demand is stagnating.
Poet LLC and Green Plains Renewable Energy Inc. are among the corn-based ethanol producers that are turning their facilities into refineries capable of creating specialized products alongside ethanol.
Friday, August 17, 2012
US government reviewing ethanol policy in wake of calls for changes
The U.S. government is reviewing the country's ethanol policy in the wake of numerous calls for a suspension of the existing mandate due to the continued drought, which has lowered predicted corn yields and raised prices.
Ethanol production was 817,000 barrels a day the week of Aug. 5, down 15 percent from a record in December 2011. Stockpiles dropped 3.9 percent to 18.7 million barrels, the lowest level since Dec. 30, 2011, according to Energy Department data. “I would simply say that the [Environmental Protection Agency], in consultation with the Department of Agriculture, is looking at this,” said Jay Carney, the White House press secretary. “I don’t have a statement one way or the other predicting what the experts are going to say.”
Ethanol producers have said they're being unfairly blamed for supply pressures, and that roughly one-third of the corn processed to make ethanol is then converted into dried distillers grain, a form of animal feed. In addition, detractors say that a prolonged interruption in ethanol production could produce a spike in the price of gasoline. “You can’t suddenly go to a business that’s manufacturing 9 million barrels a day of gasoline and say ‘Were going to get rid of ethanol,’” said Tom Kloza, publisher of the Oil Price Information Service. “You’d have chaos.”
Ethanol production was 817,000 barrels a day the week of Aug. 5, down 15 percent from a record in December 2011. Stockpiles dropped 3.9 percent to 18.7 million barrels, the lowest level since Dec. 30, 2011, according to Energy Department data. “I would simply say that the [Environmental Protection Agency], in consultation with the Department of Agriculture, is looking at this,” said Jay Carney, the White House press secretary. “I don’t have a statement one way or the other predicting what the experts are going to say.”
Ethanol producers have said they're being unfairly blamed for supply pressures, and that roughly one-third of the corn processed to make ethanol is then converted into dried distillers grain, a form of animal feed. In addition, detractors say that a prolonged interruption in ethanol production could produce a spike in the price of gasoline. “You can’t suddenly go to a business that’s manufacturing 9 million barrels a day of gasoline and say ‘Were going to get rid of ethanol,’” said Tom Kloza, publisher of the Oil Price Information Service. “You’d have chaos.”
Wednesday, August 15, 2012
UN calls for suspension of US-mandated ethanol production
The United Nations is urging the U.S. to cut its ethanol production, the latest in a growing number of voices calling for the government to adjust its corn-ethanol mandate for the Renewable Fuels Standard due to rising prices caused by the current drought.
Members of the Group of 20 leading economies — including France, India and China — have already expressed concern about the U.S. ethanol policy, according to reports. “An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses,” said José Graziano da Silva, director-general of the UN's Food and Agriculture Organization.
But U.S. Agriculture Secretary Tom Vilsack has raised doubts about the impact of waiving the ethanol mandate. The U.S. biofuel industry has reduced gas prices and created jobs, and high corn prices were already curbing ethanol production, he said. Adjusting the mandate "may not do what some people think it will do," said Vilsack. “It’s not going to be an easy decision, clearly, but I think you have to look at this thing more broadly than some have looked at it."
Members of the Group of 20 leading economies — including France, India and China — have already expressed concern about the U.S. ethanol policy, according to reports. “An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses,” said José Graziano da Silva, director-general of the UN's Food and Agriculture Organization.
But U.S. Agriculture Secretary Tom Vilsack has raised doubts about the impact of waiving the ethanol mandate. The U.S. biofuel industry has reduced gas prices and created jobs, and high corn prices were already curbing ethanol production, he said. Adjusting the mandate "may not do what some people think it will do," said Vilsack. “It’s not going to be an easy decision, clearly, but I think you have to look at this thing more broadly than some have looked at it."
Friday, January 6, 2012
US $6 billion corn ethanol subsidy ends
The U.S. federal subsidy for corn ethanol, which amounted to roughly $6 billion per year, ended on January 1, causing companies making ethanol to lose a tax credit of 46 cents per gallon. As a result, the industry has shifted greater focus to a separate credit for ethanol made from non-foodstuffs such as switchgrass, wood chips and the leaves and stalks of corn, called cellulosic ethanol.
The tax credit, which is currently set at $1.01 per gallon, is set to expire on December 31, but the industry would like Congress to extend it for another five years. Cellulosic ethanol isn't being sold yet due to its higher R&D and production costs, but the industry has said it hopes to begin sales soon. Environmentalists are also in favor of cellulosic ethanol because it doesn't compete with corn as a foodstuff — one of their arguments against corn-based ethanol.
Friday, July 15, 2011
US ethanol producer uses wheat to battle corn shortage
U.S. ethanol producer The Andersons Inc. is mixing wheat into its corn-based biofuel in an effort to cut costs and diversify its supplier sources while fighting an increasing shortage in corn supplies.
Andersons is mixing soft red winter wheat along with corn to produce the biofuel, according to Neill McKinstray, vice president and general manager of the company's ethanol division. According to Newedge analyst Dan Cekander, nearby July wheat futures remain about 20 cents cheaper than nearby corn futures.
"With wheat cheaper than corn, they will likely continue to fit it into their mix to the extent their equipment will allow," said Rich Feltes, an analyst at Chicago's R.J. O'Brien. "Ohio soft red wheat harvest is peaking, and the stuff is available and people are looking for homes for the good harvest."
Analysts expect the company to continue the wheat mixing strategy until a new corn harvest crop comes in October.
Andersons is mixing soft red winter wheat along with corn to produce the biofuel, according to Neill McKinstray, vice president and general manager of the company's ethanol division. According to Newedge analyst Dan Cekander, nearby July wheat futures remain about 20 cents cheaper than nearby corn futures.
"With wheat cheaper than corn, they will likely continue to fit it into their mix to the extent their equipment will allow," said Rich Feltes, an analyst at Chicago's R.J. O'Brien. "Ohio soft red wheat harvest is peaking, and the stuff is available and people are looking for homes for the good harvest."
Analysts expect the company to continue the wheat mixing strategy until a new corn harvest crop comes in October.
Thursday, July 14, 2011
Livestock, poultry groups comment on ethanol tax 'compromise'
A coalition of livestock and poultry groups released a statement regarding the proposed "compromise" on abolition of the Volumetric Ethanol Excise Tax Credit and the protective tariff on imported ethanol. Groups issuing the statement include: American Meat Institute, California Dairies Inc., National Cattlemen's Beef Association, National Chicken Council, National Meat Association, National Pork Producers Council and National Turkey Federation.
"We appreciate the work done by Senator Dianne Feinstein in her effort to end the VEETC and tariff," the coalition statement said. "However, the resulting compromise still provides new federal funds for corn-based ethanol, money that would be better spent reducing the deficit or encouraging the development of energy sources that do not compete with feed needs."
"We appreciate the work done by Senator Dianne Feinstein in her effort to end the VEETC and tariff," the coalition statement said. "However, the resulting compromise still provides new federal funds for corn-based ethanol, money that would be better spent reducing the deficit or encouraging the development of energy sources that do not compete with feed needs."
US Department of Energy commits to cellulosic ethanol plant funding
The U.S. Department of Energy announced a conditional commitment for a $105 million loan guarantee to support development of the nation's first commercial-scale cellulosic ethanol plant. Project Liberty, sponsored by Poet LLC, will produce up to 25 million gallons of ethanol per year at the plant, which will be located in Emmetsburg, Iowa.
"This project will help decrease our dependence on oil, create jobs and aid our transition to clean, renewable energy that is produced here at home," said U.S. Energy Secretary Steven Chu. "The innovations used in this project are another example of how we are seizing the opportunity to create new economic opportunities to win the clean energy future."
Unlike many conventional corn ethanol plants, Project Liberty will use corncobs, leaves and husks from local farmers that do not compete with feed grains. The project's process uses enzymatic hydrolysis to convert waste into ethanol, which will produce enough biogas to power the project's grain-based ethanol plant. Poet estimates the project will create about 200 jobs during construction and 40 permanent jobs at the plant. Poet also estimates the project will generate nearly $14 million in new revenue to area farmers.
Project Liberty will displace over 13.5 million gallons of gasoline annually and fulfill more than 25% of the projected 2013 Renewable Fuel Standard Requirement for biomass-based cellulosic ethanol, Poet estimates. Poet also plans to replicate the process at 27 of the ethanol producer's other corn ethanol facilities, with a projected combined annual capacity of one billion gallons per year of cellulosic ethanol.
"This project will help decrease our dependence on oil, create jobs and aid our transition to clean, renewable energy that is produced here at home," said U.S. Energy Secretary Steven Chu. "The innovations used in this project are another example of how we are seizing the opportunity to create new economic opportunities to win the clean energy future."
Unlike many conventional corn ethanol plants, Project Liberty will use corncobs, leaves and husks from local farmers that do not compete with feed grains. The project's process uses enzymatic hydrolysis to convert waste into ethanol, which will produce enough biogas to power the project's grain-based ethanol plant. Poet estimates the project will create about 200 jobs during construction and 40 permanent jobs at the plant. Poet also estimates the project will generate nearly $14 million in new revenue to area farmers.
Project Liberty will displace over 13.5 million gallons of gasoline annually and fulfill more than 25% of the projected 2013 Renewable Fuel Standard Requirement for biomass-based cellulosic ethanol, Poet estimates. Poet also plans to replicate the process at 27 of the ethanol producer's other corn ethanol facilities, with a projected combined annual capacity of one billion gallons per year of cellulosic ethanol.
Wednesday, May 18, 2011
Proposed legislation would reduce ethanol tax credit for two years
Proposed legislation that would reduce the Volumetric Ethanol Excise Tax Credit for a two-year period before transitioning to a tax credit that would adjust based on the price of oil has gained support from the National Corn Growers Association, the American Coalition for Ethanol, Growth Energy and the Renewable Fuels Association.
The Domestic Energy Promotion Act of 2011, spearheaded by Iowa Senator Chuck Grassley, would also improve upon current tax credits for the installation of blender pumps and ethanol fueling infrastructure, and would extend tax credits for small ethanol producers as well as for advanced and cellulosic ethanol. "The Domestic Energy Promotion Act of 2011 would ensure we don’t abandon this increasingly vital American industry, but rather smartly and responsibly foster its continued growth and evolution,” said the groups. “This legislation rightfully recognizes budget constraints by reforming the ethanol tax credit and significantly reducing its cost. Critically, this legislation would also ensure progress made to commercialize advanced ethanol technologies utilizing new feedstocks such as grasses and municipal solid waste is accelerated"
The Domestic Energy Promotion Act of 2011, spearheaded by Iowa Senator Chuck Grassley, would also improve upon current tax credits for the installation of blender pumps and ethanol fueling infrastructure, and would extend tax credits for small ethanol producers as well as for advanced and cellulosic ethanol. "The Domestic Energy Promotion Act of 2011 would ensure we don’t abandon this increasingly vital American industry, but rather smartly and responsibly foster its continued growth and evolution,” said the groups. “This legislation rightfully recognizes budget constraints by reforming the ethanol tax credit and significantly reducing its cost. Critically, this legislation would also ensure progress made to commercialize advanced ethanol technologies utilizing new feedstocks such as grasses and municipal solid waste is accelerated"
Monday, April 18, 2011
US poultry industry calls for cut in ethanol mandate
The U.S. poultry industry has asked Congress to lower the amount of ethanol required to be added to motor gasoline as a way of decreasing the demand for corn, which has driven the commodity's prices from $2 per bushel in 2006 to more than $8.00 per bushel currently.
Corn is the primary component of chicken feed, which accounts for 55% of the wholesale cost of whole, ready-to-cook chickens, and 40% of the U.S. corn crop is being diverted into federally mandated ethanol usage. “The National Chicken Council recommends a plan be implemented that would reduce the Renewable Fuels Standard when the stocks-to-use ratio for corn drops to low levels, as the situation is now,” said industry executive Michael Welch at a hearing held by the Livestock, Dairy and Poultry Subcommittee of the House Agriculture Committee.
Less than 700 million bushels of corn are expected to be left at the end of the 2011 crop year, said Welch. “There is no cushion, no extra bushels in inventory to carry the needs of the users of corn through the next crop year in the event of a shortfall in this fall’s corn harvest,” said Welch. “To assume an adequate number of acres will be planted to corn this year and the next few years and to further assume favorable weather conditions for crops this year and the next few years are not assumptions the U.S. chicken industry is prepared to make, nor should prudent U.S. government policymakers be willing to make.”
The industry has said that it would like to see the mandate reduced to allow non-ethanol users greater access to corn.
Friday, April 15, 2011
Ethanol futures fall in US on surge of oil prices
Ethanol futures fell the most in four weeks amid concerns that higher energy prices will curb economic growth, according to analysts.
The International Energy Agency and the International Monetary Fund said oil prices that have surged 25% in the past year will hurt the global economy. “The market’s got overextended,” said Mike Blackford, an analyst at INTL FCStone Group. “It’s enough to cause a bit of a washout this week. Demand is hand-to-mouth. People are only buying as needed.”
Denatured ethanol for May delivery dropped $0.07 (2.6%) to $2.66 a gallon on the Chicago Board of Trade, the largest decline since March 15 and the lowest price since March 31. Prices have risen 12% this year. In cash market trading, ethanol in the U.S. Gulf dropped $0.05 (1.8%) to $2.735 a gallon and in Chicago lost $0.035 (1.3%) to $2.66. Ethanol in New York fell $0.02 (0.7%) to $2.75 a gallon and on the West Coast decreased $0.035 (1.2%) to $2.805.
The International Energy Agency and the International Monetary Fund said oil prices that have surged 25% in the past year will hurt the global economy. “The market’s got overextended,” said Mike Blackford, an analyst at INTL FCStone Group. “It’s enough to cause a bit of a washout this week. Demand is hand-to-mouth. People are only buying as needed.”
Denatured ethanol for May delivery dropped $0.07 (2.6%) to $2.66 a gallon on the Chicago Board of Trade, the largest decline since March 15 and the lowest price since March 31. Prices have risen 12% this year. In cash market trading, ethanol in the U.S. Gulf dropped $0.05 (1.8%) to $2.735 a gallon and in Chicago lost $0.035 (1.3%) to $2.66. Ethanol in New York fell $0.02 (0.7%) to $2.75 a gallon and on the West Coast decreased $0.035 (1.2%) to $2.805.
Monday, March 21, 2011
National Corn Growers Association releases statement on amendment to repeal VEETC
National Corn Growers Association President Bart Schott has released a statement expressing disappointment in response to Senator Tom Coburn’s amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit in the small-business program reauthorization bill.
“We are disappointed that Senator Coburn is singling out the ethanol industry in his amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit while tax credits to the oil and gas industries remained untouched," said Schott. "The American ethanol industry provides and supports 400,000 jobs here in the United States during a time of economic uncertainty. In addition, in the past year alone, ethanol added more than $50 billion to the national Gross Domestic Product and displaced the need for more than 360 million barrels of imported oil, valued at $16 billion.
Schott said that if the amendment passes, the ethanol industry may have to reduce its production by 38%. “That is approximately 4 billion of the 10.75 billion gallons produced in 2009," he said. "This loss in ethanol production would result in the shedding of approximately 112,000 jobs in all sectors of the economy. Can we afford that?"
“We are disappointed that Senator Coburn is singling out the ethanol industry in his amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit while tax credits to the oil and gas industries remained untouched," said Schott. "The American ethanol industry provides and supports 400,000 jobs here in the United States during a time of economic uncertainty. In addition, in the past year alone, ethanol added more than $50 billion to the national Gross Domestic Product and displaced the need for more than 360 million barrels of imported oil, valued at $16 billion.
Schott said that if the amendment passes, the ethanol industry may have to reduce its production by 38%. “That is approximately 4 billion of the 10.75 billion gallons produced in 2009," he said. "This loss in ethanol production would result in the shedding of approximately 112,000 jobs in all sectors of the economy. Can we afford that?"
Wednesday, February 23, 2011
NCC commends US House block on Ethanol subsidy, E15 implementation
The National Chicken Council has said it supports the actions of the U.S. House of Representatives in voting to block federal funding of blender pumps for gasoline mixed with ethanol at service stations, and to prohibit the Environmental Protection Agency from carrying out a decision to allow up to 15% ethanol in motor gasoline (E15).
The House voted 261-168 to ban federal funding for installing blender pumps. The amendment was to the continuing resolution funding the government for the rest of this fiscal year.
The House also voted 286-135 to block the EPA from spending any federal funds to carry out waivers granted over the past year that would allow fuel blenders to put as much as 15% ethanol into gasoline for cars and trucks. The legal limit has been 10%. “We commend the House for voting to begin the process of reining in the out-of-control ethanol program,” said NCC President George Watts. “This country needs neither E15 nor taxpayer-subsidized ethanol facilities. We urge the Senate to take similar action.”
The House voted 261-168 to ban federal funding for installing blender pumps. The amendment was to the continuing resolution funding the government for the rest of this fiscal year.
The House also voted 286-135 to block the EPA from spending any federal funds to carry out waivers granted over the past year that would allow fuel blenders to put as much as 15% ethanol into gasoline for cars and trucks. The legal limit has been 10%. “We commend the House for voting to begin the process of reining in the out-of-control ethanol program,” said NCC President George Watts. “This country needs neither E15 nor taxpayer-subsidized ethanol facilities. We urge the Senate to take similar action.”
Wednesday, December 15, 2010
Extension of US ethanol tax credit brings multi-industry response
The U.S. Senate has agreed to a tax policy package that includes a one-year extension of the Volumetric Ethanol Excise Tax Credit at its current level of $0.45 per gallon.
This move comes shortly after the Senate defeated a similar package that would have extended the VEETC through 2011 but reduced it by 20%, to $0.36 per gallon.
In response to the vote, a multi-industry coalition representing the food industry, animal agriculture, environmental groups and budget watchdogs released a statement expressing their concerns. “The Senate’s decision to accept a deal to extend for another year the outdated and unnecessary subsidies for the corn ethanol industry is outrageous and shortsighted," said the coalition statement. "Now it’s time for the House of Representatives — especially the Leadership and the House negotiators on the tax package — to stand up and say no to extending federal corn ethanol subsidies. The federal government should not waste another $6 billion on this needless subsidy. It is bad for the environment, food producers, farmers and consumers. And at a time when the budget deficit and national debt have reached a crisis level, bad for the nation’s long-term fiscal health. Enough.”
Members of the coalition are also concerned about sustainability. "Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation's fuel needs," said J. Patrick Boyle, president and CEO of the American Meat Institute. "Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers."
The coalition has said that it plans to keep a close eye on further developments regarding the tax credit.
This move comes shortly after the Senate defeated a similar package that would have extended the VEETC through 2011 but reduced it by 20%, to $0.36 per gallon.
In response to the vote, a multi-industry coalition representing the food industry, animal agriculture, environmental groups and budget watchdogs released a statement expressing their concerns. “The Senate’s decision to accept a deal to extend for another year the outdated and unnecessary subsidies for the corn ethanol industry is outrageous and shortsighted," said the coalition statement. "Now it’s time for the House of Representatives — especially the Leadership and the House negotiators on the tax package — to stand up and say no to extending federal corn ethanol subsidies. The federal government should not waste another $6 billion on this needless subsidy. It is bad for the environment, food producers, farmers and consumers. And at a time when the budget deficit and national debt have reached a crisis level, bad for the nation’s long-term fiscal health. Enough.”
Members of the coalition are also concerned about sustainability. "Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation's fuel needs," said J. Patrick Boyle, president and CEO of the American Meat Institute. "Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers."
The coalition has said that it plans to keep a close eye on further developments regarding the tax credit.
Monday, October 25, 2010
NCC: ethanol industry bid 'a very bad idea at a very bad time'
The National Chicken Council (NCC) released a statement calling the ethanol industry's latest bid for federal support "a very bad idea at a very bad time."
Several ethanol groups are asking Congress and the Obama Administration to back a revised subsidy program that would involve a tax credit directly to ethanol producers (as opposed to fuel blenders) and a monetized subsidy (rather than a credit against federal excise taxes due). "The ethanol industry's program will result in more corn going into ethanol and less into feed," said NCC communications director Richard L. Lobb. "This will result in higher production costs for our companies and, inevitably, will contribute to higher consumer prices for chicken and other protein products."
Fuel blenders currently receive a 45-cent federal tax credit for each gallon of ethanol added to motor fuel. This credit is scheduled to expire at the end of 2010, though ethanol supporters are campaigning to extend the program by one year.
Several ethanol groups are asking Congress and the Obama Administration to back a revised subsidy program that would involve a tax credit directly to ethanol producers (as opposed to fuel blenders) and a monetized subsidy (rather than a credit against federal excise taxes due). "The ethanol industry's program will result in more corn going into ethanol and less into feed," said NCC communications director Richard L. Lobb. "This will result in higher production costs for our companies and, inevitably, will contribute to higher consumer prices for chicken and other protein products."
Fuel blenders currently receive a 45-cent federal tax credit for each gallon of ethanol added to motor fuel. This credit is scheduled to expire at the end of 2010, though ethanol supporters are campaigning to extend the program by one year.
Friday, July 16, 2010
Ethanol stock inches up
Ethanol storage in the U.S. increased to 819 million gallons, according to a report issued by the Renewable Fuels Association.
The RFA calculated that based on total sales of gasoline, “ethanol production is equivalent to 8.8% of gasoline demand”. This value represents the true measure of value of ethanol in relation to crude oil and the cost of refining.
For RFA members to survive, they must have continued government support in the form of subsidies both direct and indirect and also enjoy an increase in the current E10 blend ceiling to a higher value.
The RFA calculated that based on total sales of gasoline, “ethanol production is equivalent to 8.8% of gasoline demand”. This value represents the true measure of value of ethanol in relation to crude oil and the cost of refining.
For RFA members to survive, they must have continued government support in the form of subsidies both direct and indirect and also enjoy an increase in the current E10 blend ceiling to a higher value.
Friday, May 14, 2010
Record corn production projected
The U.S. Department of Agriculture projects a record 13.4 billion bushels of corn will be produced this year. This uptrend will ease tension between corporate livestock interests and American farmers and ethanol producers, according to the ethanol industry trade group, the Renewable Fuels Association (RFA).
Key points of the report noted by the RFA: Corn supplies are expected to grow to a record 15.1 billion bushels; farmers expect to plant 88.8 million acres of corn; yield expectations are up 163.4 bushels per acre; year-end surpluses are anticipated at 1.8 billion bushels, up from last year. In 2010/11, about 4.6 billion bushels of corn are anticipated to be used in ethanol.
Key points of the report noted by the RFA: Corn supplies are expected to grow to a record 15.1 billion bushels; farmers expect to plant 88.8 million acres of corn; yield expectations are up 163.4 bushels per acre; year-end surpluses are anticipated at 1.8 billion bushels, up from last year. In 2010/11, about 4.6 billion bushels of corn are anticipated to be used in ethanol.
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