The Coming Collection

While I’d never claim to be clairvoyant, I’m willing to bet you’re all pondering the same question I have about the ethanol boom: When will the madness end?

With the summer in full swing and the mega-busy spring behind us, there’s a bit more time to contemplate such questions, and this one in particular leads to headaches requiring double doses of ibuprofen. Exactly which trend, vulnerability, blind spot, etc., will “deep six” the boom that has rearranged the cosmos for U.S. agriculture? And, what happens to us when it does?

Most experts agree that virtually nothing could serve to derail the “biofuel” movement, with “biofuel” being the operative word. But what happens between now and the ultimate destination — a biomass-to-fuel production system that produces biofuel at a reasonably consistent level of profitability, not to mention without the ethical baggage and economic impact of the food vs. fuel question — could serve to be a pretty bumpy ride.

Of course, in the grand American tradition of celebrating success one day only to wake up the next morning and rip it to shreds, ethanol is taking it full on the chin these days. Despite its amazing accomplishments to date, the ethanol movement has more recently been characterized as strictly a gold rush for greedy businesses to try to cash in on something that will prove completely impractical in the long run.

While it would be naive to assert that there aren’t gold diggers in the ethanol fray, let’s take a deep breath here. For many, many years, the ethanol movement existed in a state of suspended animation in the U.S., waiting for an opportunity to cash in on its hard work. I’ll never forget visiting the ethanol booth at the 2005 Commodity Classic, a modest in-line tabletop with a guy who was only slightly less lonely than the Maytag repairman. Who could blame the industry for its exuberance?

Simultaneously, row crop growers in the Midwest looking for any port in an uncertain market have rapidly embraced corn production to the tune of an estimated 90 million-plus acres in an effort to feed the 115 bioenergy plants currently online, and 79 under construction.

Now, a whole host of factors are weakening the walls of the continuously inflating ethanol balloon. The world, as well as earmarked funding in the Bush administration’s farm bill proposals, target cellulosic production methods. Land values continue to rise, tapping into farm profitability. The prospect of $4 corn might have growers salivating, but it cripples the ethanol plant’s ability to operate profitably. New plants under construction now cost significantly more than their predecessors, consequently extending the payback timeframe by years.

Then, of course, there’s the “food vs. fuel” issue. Consumers are being told alternately that food prices are going up because of corn going to ethanol, and then because of the cost of energy in general. If food prices do increase beyond the point of consumer tolerance, and the media decides to create a villain out of the ethanol industry, it won’t matter much who’s right or wrong.

All challenges aside, biofuels are here to stay. But all signs point to a market “correction” in the not too distant future that will once again challenge U.S. agriculture to adjust and adapt. 

Leave a Reply

Latest News
FertilizerGypsum Added To List Of Conservation Practices
July 28, 2016
Crop farmers in a growing number of states may be eligible for financial assistance from the USDA’s Natural Resources Conservation Read More
Management2016 CTIC Cover Crop Survey: 33% Report ROI From Cover …
July 28, 2016
Insight from 2,020 farmers from across the country reflected enthusiasm for cover crops and—for the fourth year in a row—found Read More
Palmer pigweed seedhead in cotton
HerbicidesStudy: Fall Weed Controls Can Make Significant Impact O…
July 28, 2016
An article published in the latest issue of the journal Weed Science shows that adopting harvest-time and post-harvest weed controls Read More
InsecticidesSyngenta: Beware Of Early Stinkbug Threat To Soybeans
July 28, 2016
With the record warm temperatures this past winter and confirmations from early entomologist reports, Syngenta encourages growers to monitor stinkbug Read More
Peanut field
Crop InputsVerdesian Introduces New Inoculant For Peanuts
July 28, 2016
As planning begins for the next growing season, Verdesian Life Sciences adds Primo Power CL, a new liquid inoculant, to Read More
Soil Young Corn
Crop InputsSmithsonian: 5 Things to Know About New GMO Labeling Bi…
July 27, 2016
On July 14, the House of Representatives passed a bill requiring large food companies to label products containing genetically modified Read More
Palmer pigweed in soybean stubble
HerbicidesSpecial Issue Of Weed Science Explores Human Aspects Of…
July 27, 2016
Weeds that evolve resistance to herbicides are a serious threat to global agricultural production. In this Special Issue of Weed Science, Read More
CHS Primeland
CropLife 100CHS Businesses In Washington, Idaho Combining For Great…
July 27, 2016
As full-service ag retailers, CHS Primeland and CHS Farmers Co-op collectively serve farmers and other customers in 15 counties in Read More
Storage Tanks at Nachurs
Crop InputsNACHURS Joins Field to Market
July 27, 2016
NACHURS announced today that it has joined Field to Market: The Alliance for Sustainable Agriculture, a leading multi-stakeholder initiative working Read More
Illinois Researchers
FertilizerMeasure Of Age In Soil Nitrogen Could Help Precision Ag…
July 26, 2016
What’s good for crops is not always good for the environment. Nitrogen, a key nutrient for plants, can cause problems Read More
Kochia
Crop InputsNufarm Launches New Herbicide for Resistant Kochia
July 25, 2016
Nufarm introduces Scorch herbicide for U.S. farmers and ranchers combating a broad range of troublesome broadleaf weeds. A unique premix Read More
ManagementNew Rabobank Report Calls for Farmer ROI Focus
July 25, 2016
As U.S. row crop farmers brace themselves for a third year of negative margins, Rabobank believes farmers must lower the Read More
Syngenta Sign
Crop InputsBloomberg: Syngenta-Chem China Deal on Track for Regula…
July 25, 2016
Syngenta AG, which has agreed to be taken over by China National Chemical Corp. for $43 billion, said talks with Read More
ManagementGROWMARK Meeting Visit, Company Takeover Updates, and R…
July 22, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent speaking engagement at GROWMARK’s eastern event, crop protection company merger rumors, Read More
Crop InputsMonsanto: EU Approves Roundup Ready 2 Xtend Imports
July 22, 2016
Monsanto Co. announced today that the European Commission has granted import approval for Roundup Ready 2 Xtend soybeans. This milestone Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSyngenta Announces Alfalfa Seed Split Off
July 22, 2016
On September 1, 2016, Syngenta will transfer sales and distribution of alfalfa seed to the NEXGROW branded business that is Read More
Dow DuPont
Crop InputsDuPont, Dow Shareholders Approve Merger
July 21, 2016
DuPont and The Dow Chemical Company announced that, at their respective special meetings of stockholders held today, stockholders of both Read More
ManagementLand O’Lakes Announces SUSTAIN Business Unit, Oth…
July 20, 2016
Land O’Lakes, Inc. today announced the formal organization of a new business unit, SUSTAIN, and its leadership. SUSTAIN will focus Read More