US senators, representatives ask EPA to adjust corn ethanol mandate

U.S. senators and House representatives have called on the Environmental Protection Agency to adjust the corn-ethanol mandate for the Renewable Fuel Standard due to the continuing severe drought, according to reports.
Their request joins an existing coalition of livestock, poultry, meat, dairy and feed organizations that has already delivered a petition to the EPA asking for a waiver “in whole or in substantial part” of the amount of renewable fuel that must be produced under the Renewable Fuel Standard for the remainder of 2012 and for the portion of 2013 that is one year from the time the waiver becomes effective. “As stressful weather conditions continue to push corn yields lower and prices upward, the economic ramifications for consumers, livestock and poultry producers, food manufacturers and foodservice providers will become more severe,” said the senators. “We ask you to adjust the corn grain-ethanol mandate of the RFS to reflect this natural disaster and these new market conditions. Doing so will help to ease supply concerns and provide relief from high corn prices.”
The representatives say that another short corn crop would be devastating to the animal agriculture industry, food manufacturers, foodservice providers and consumers. Both the senate and the representatives have gained the support of the coalition. “We appreciate that these representatives have fully grasped the scope of this crisis,” said National Turkey Federation President Joel Brandenberger. “Anything other than immediate action would be a blatant disregard for the petition process of the RFS. The emergency is happening now, today."

Poultry, meat organizations call for ethanol production mandate waiver

As U.S. drought conditions continue to be the worst in 56 years, and corn yield forecasts continue to drop significantly, a coalition of poultry and meat organizations have asked the U.S. Environmental Protection Agency to waive the federal mandate for the production of corn ethanol.
In a petition delivered to the agency, the coalition asked for a waiver “in whole or in substantial part” of the amount of renewable fuel that must be produced under the Renewable Fuels Standard for the remainder of 2012 and for the portion of 2013 that is one year from the time the waiver becomes effective. The Renewable Fuels Standard requires 13.2 billion gallons of corn-based ethanol to be produced in 2012 and 13.8 billion gallons in 2013, amounts that will use about 4.7 billion and 4.9 billion bushels, respectively, of the nation’s corn. Some agricultural forecasters now are estimating that just 11.8 billion bushels of corn will be harvested in 2012 — about 13 billion were harvested in 2011 — meaning corn-ethanol production will use about four of every 10 bushels.
The standard has “directly affected the supply and cost of feed in major agricultural sectors of this country, causing the type of economic harm that justifies issuance of an RFS waiver,” said the coalition in its petition. “[i]t is abundantly clear that sufficient harm is occurring now and that economic conditions affecting grain supplies and feed prices will worsen in the months ahead. Both conditions provide an independent basis for a waiver of the RFS.”
Relief from the Renewable Fuels Standard is extremely urgent, according to Michael Welch, president and CEO of Harrison Poultry and past National Chicken Council chairman. "This very short corn crop will undoubtedly prove to be devastating to the animal agriculture industry, food manufacturers, foodservice providers and consumers,” he said. “Thousands of jobs, a continued upward trend of rising food prices and the livelihoods of family farmers are all at risk. The chicken industry is urging the EPA to implement the law and promptly grant a full or partial waiver of the RFS. If not now, when?”
The National Corn Growers Association, however, said that it will continue to support the Renewable Fuels Standard. “The NCGA stands firm in its support of the Renewable Fuels Standard and will strongly oppose legislation to alter or repeal the RFS," said National Corn Growers Association President Garry Niemeyer. "Likewise, we believe it is premature for a waiver of the RFS provisions at this point. With the crop still in the field, it is too early to determine this year’s final corn supply. In addition, the ethanol industry now has a significant surplus of ethanol and RFS credits that can greatly offset ethanol’s impact on the corn supply.
“However, we recognize the severe impact of the drought on our farmers and our customers, here and abroad, with livestock, poultry, ethanol and other processing facilities, and we believe the flexibility of the RFS does work, and will work. NCGA also supports the waiver process that is embodied in the current RFS, and respects the right of those that may file a waiver petition to do so."
Members of the coalition that signed the petition include the American Feed Industry Association, American Meat Institute, American Sheep Industries Association, California Dairy Campaign, Dairy Producers of New Mexico, Dairy Producers of Utah, Idaho Dairymen’s Association, Milk Producers Council, National Cattlemen’s Beef Association, National Chicken Council, National Pork Producers Council, National Turkey Federation, Nevada State Dairy Commission, North American Meat Association, Northwest Dairy Association, Oregon Dairy Farmers Association, Southeast Milk Inc., United Dairymen of Arizona and the Washington State Dairy Federation.

Corn refiners seek dismissal from sugar producers' lawsuit

Archer-Daniels Midland Co. and four other corn refiners have asked a judge to dismiss them from a lawsuit by sugar producers over allegedly false advertising that high-fructose corn syrup is natural, saying that they can't be made liable for the statements of the Corn Refiners Association, the trade group of which they are members.
A group of sugar growers and refiners sued the corn refiners and the association in 2011, claiming that an advertising campaign that promotes high-fructose corn syrup as “natural” and “nutritionally the same as table sugar” is false and misleading. The sugar producers, in an amended complaint, said the corn refiners initiated the advertising campaign in 2008 in response to the “growing vilification” of high-fructose corn syrup and a “resulting drop in sales.”
The case is Western Sugar v. Archer-Daniels-Midland, 11- 3473, U.S. District Court, Central District of California (Los Angeles).

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.

Monsanto reports fourth quarter net loss of $112 million

Monsanto Co. reported a fiscal 2011 fourth-quarter net loss of $112 million and said that it must restate earnings for the last two years because of a federal investigation into its herbicide sales.
Monsanto was prompted to restate earnings from the fourth quarter of fiscal year 2009 through the third quarter of fiscal year 2011 after U.S. Securities and Exchange Commission findings that the company paid dealers of its Roundup Herbicide. Monsanto did not provide revenue or income comparisons to last year's fourth quarter because of the pending earnings revisions. Last year, the company reported a quarterly loss of $233 million, with $1.95 billion in revenue.
The company said the restatements could reduce its reported net income in the fiscal year 2009 by 5 cents per share to 10 cents per share. The impact on earnings for fiscal year 2010 could range from a loss of 2 cents per share to a gain of 3 cents per share.
For the fourth quarter of 2011, Monsanto said sales in its seeds and genomics division jumped 39% compared with 2010, to $1.4 billion. Corn seed sales rose 58% from 2010 to $671 million during the quarter. For the full fiscal year 2011, Monsanto reported net income of $1.61 billion, or $2.96 a share, on $11.82 billion in revenue. 

India could play significant role in next-generation ethanol sector

With significant new policies and government investment, India could play a significant role in the next-generation ethanol industry.

Agricultural residues from rice, wheat, maize and other crops in India could be converted into ethanol, allowing the country to play a significant role in the next-generation ethanol sector, according to research from Bloomberg New Energy Finance.
According to the Bloomberg study, "Next-generation Ethanol: What's in it for India?," India will produce more than 125 million metric tons of the residues by 2020, at the same time next-generation ethanol may be a $15 billion-per-year industry. India's success, and the success of the industry itself, however, depends on significant new policies and investment, according to the report. Currently, a liter of next-generation ethanol is no more cost-effective than a liter of conventional ethanol, unless significant government assistance is provided.
The creation of the next-generation ethanol industry could lower greenhouse gas emissions from transport fuels, reduce India's dependence on oil imports and create jobs, said BNEF. In one scenario, up to 1 million workers could be hired to collect and convert the agricultural waste.

Biofuel production may not cause indirect land use change

The annual change in planted areas for cotton, corn/soybeans and oats in the U.S. correlate with the change in croplands for biofuel production, but only cotton seems to be negatively affected, calling into question the theory that biofuel production in the U.S. has induced indirect land use change.
A new study, "Indirect land use change for biofuels: Testing predictions and improving analytical methodologies," compiled historical data from 2002 to 2007 to take a look at the potential correlation between U.S. biofuel production and indirect land use change. The study found that "no arable land increases from the 1990s are observed in the U.S. Furthermore, no declines in natural ecosystem lands in the U.S. have been observed since 1998. Therefore, the U.S. historical data do not indicate that [indirect land use change] occurred within the 48 contiguous states as a result of U.S. biofuel production."
However, said study preparers Seungdo Kim and Bruce Dale of Michigan State University, the results can be interpreted two different ways: either biofuel production in the U.S. through the end of 2007 has not induced indirect land use change, or the test simply failed to detect ongoing indirect land use change from the historical data. The study suggests that more research be done, both with data after 2007 (which is not yet available) and with more sophisticated empirical approaches that might more accurately make use of the historical data.

China to limit use of corn in non-feed projects

Corn processing industries are expected to consume 50 million tons of corn in the current marketing year — roughly 29% of the country's total corn output in 2010, said the CNGOIC.

China is making plans to limit the use of corn and edible oils in non-animal-feed projects to secure the country's grain supplies, according to a report by China's top economic planner.
Corn is a particular focus, as ethanol, starch and sweeteners consume roughly one-third of China's corn output, leading to concerns about shortages for feed millers. Corn processing industries in China currently have an annual capacity of 70 million tons, according to Shang Qiangmin, director of the China National Grain and Oils Information Center. The industries are expected to consume 50 million tons of corn in the current marketing year — roughly 29% of the country's total corn output in 2010, said the CNGOIC.
Beijing has ordered banks to stop lending to corn purchasers and has canceled tax breaks for corn processors to limit their expansion, according to reports.