FarmPolicy

August 21, 2019

Farm Bill: Revenue Plans Draw Focus; Biofuels: Switch Grass Research

Categories: Ethanol /Farm Bill

Chris Clayton, writing yesterday at DTN (link requires subscription), reported that, “Revenue-assurance changes in the counter-cyclical program that have been such a pivotal part of the farm-bill debate could get dropped from the bill during conference negotiations, the chairman of the House Agriculture Committee said Monday.

“Rep. Collin Peterson, D-Minn., has been working on the farm bill throughout much of the congressional break, which includes holding ongoing talks with Acting Agriculture Secretary Chuck Conner about the Bush administration’s concerns with the bill.”

Mr. Clayton noted that, “‘There are a lot of questions about whether the revenue actually makes any sense or not,’ Peterson said Monday in a phone interview with DTN. ‘The more people look at it and the more questions they have about it.’”

The DTN article added that, “A spokeswoman for Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, responded Monday in an e-mail that Senate staffers did not think the average crop revenue program as passed by the Senate would complicate the administration of either the crop insurance program or disaster assistance. That’s mainly because the payments are not linked, she stated. The conferees will have to consider whether there would be an unacceptable duplication of farm program support and crop insurance coverage, but such concerns would apply to the traditional farm program payments as well as the ACR [Average Crop Revenue].”

Meanwhile, Mr. Clayton went on to explain that, “Besides the issues raised with revenue assurance, Peterson and his staff also have held five meetings with Acting Agriculture Secretary Chuck Conner and USDA officials about the farm bill. Talks have centered on the adjusted gross income levels for payment eligibility, actual payment caps and financing for the bill.

“‘We’re making progress, but we’re a long, long ways apart,’ Peterson said. ‘Discussions are better than they were a week ago, but we’ve still got a long ways to go.’”

And near the article’s conclusion, Mr. Clayton indicated that, “House staffers did not actually receive full language on the Senate bill until last Friday. The Senate version of the bill is about 1,000 pages longer than the House bill. Peterson said House leaders want to get a bill completed as quickly as possible. Still, the chairman was cautious about making any suggestions about when conferees would be named. For now, Peterson said he is talking with the administration and keeping his members updated on what is going on.”

In other Farm Bill news, Senator Kent Conrad (D-N.D.) wrote an Op-Ed regarding the pending legislation that was published in Sunday’s Bismarck Tribune, “New farm bill worthy of support.

In part, Sen. Conrad noted that, “Specifically, the five-year farm bill includes key provisions for farmers and ranchers, including an enhanced farm safety net and provisions to encourage the production of domestic and renewable sources of energy. The bill also includes my open fields legislation to preserve hunting and other outdoor recreation, as well as a country of origin labeling provision.

“I am especially proud that this legislation also includes my proposal for a new disaster aid program, which will go a long way toward assisting producers who fall victim to the blows of mother nature.

“The new farm bill also addresses concerns about farm program payment limits. The bill contains the beginning of important reform. It eliminates the three entity rule, requires direct attribution of payments and reduces the adjusted gross income cap for nonfarmers from $2.5 million to $750,000.”

Sen. Conrad added that, “Despite our victory in the Senate, the fight for the farm bill is far from over. The Bush administration continues to threaten to veto the bill, saying it is too costly. However, the nonpartisan Congressional Budget Office revealed that the White House’s version of the farm bill actually costs $1 billion more than the Senate’s proposal. The truth is, this is a fiscally responsible bill that does not add one cent to the nation’s deficit.

“We’re also fighting against an East Coast media that simply doesn’t understand farming and is encouraging opposition to the farm bill. They overlook the fact that this is more than a farm bill. It is a ‘food bill.’ Sixty-six percent of the money in this bill is for nutrition programs to help feed those less fortunate, as well as our nation’s children.”

Peter Shinn reported yesterday at Brownfield that, “Acting U.S. Ag Secretary Chuck Conner appeared to have a more optimistic tone on prospects for the pending farm bill. But President Bush may have already signed a piece of legislation into law with more significant implications for U.S. agriculture.

“Conner keynoted the South Dakota Corn Growers Association (SDCGA) annual banquet in Sioux Falls, South Dakota, Saturday night. During a press conference before his speech, Conner repeated the Bush administration’s opposition to the House and Senate versions of the farm bill, arguing the measures are both funded by tax increases and ‘budget gimmicks’ and don’t do enough to tighten farm program payment limits. But Conner also expressed confidence Congress will produce a farm bill President Bush won’t veto.”

Mr. Shinn indicated that, “But Conner also looked beyond the farm bill during his press conference. He suggested U.S. agriculture will quickly have to focus its efforts on fulfilling the commitments created by the energy bill President Bush signed into law last month.

“‘There’s challenges in that bill for U.S. agriculture – 15 billion gallons in fairly short order – 36 billion gallons in the not too distant future, either, in terms of not only grain-based ethanol but cellulosic as well,’ said Conner. ‘So that’s going to be our challenge, to meet those energy demands,’ he added. ‘I think we’re up for the challenge, but it’s going to require a lot of careful attention.’

“Indeed, [South Dakota Congresswoman Stephanie Herseth-Sandlin, a Democratic member of the House Agriculture Committee] says the new energy bill is already a cornerstone of U.S. ag policy on par with the farm bill. But she told Brownfield she didn’t see the energy bill as preeminent.

“‘I don’t think it’s more important,’ Herseth-Sandlin explained. ‘I think it’s just as important and the two really have a lot of synergies that together will lead to stable and successful, profitable markets.’

“And SDCGA President Reid Jensen went even further. He told Brownfield the new energy bill is even more important than the still unfinished farm legislation, at least at this point.

“‘I think it is to the farmer right now,’ Jensen said. ‘It’s supporting prices, creating demand.’”

Biofuels

A Reuters news article from yesterday (via DTN), reported that, “U.S. ethanol production capacity has risen 40 percent since last year to more than 7.5 billion gallons per year (gpy) as producers hope to break open new markets for the domestic fuel.

“U.S. ethanol plants keep opening despite terminal and offloading bottlenecks that have led to pooling of the fuel in production hubs, analysts say.”

The Reuters article explained that, “Cash ethanol prices were about $2.30 per gallon in the Midwest, up about 70 cents from lows in October, but high corn prices have hurt profits for making the fuel.

“There are 136 U.S. ethanol distilleries with 63 plants under construction and 8 undergoing expansion. If all the new plants and expansions come on line in 2008, or later, total U.S. capacity will be about 13.3 billion gpy.”

And Philip Brasher reported in today’s Des Moines Register that, “Making ethanol from switchgrass produces five times more energy than is required to produce the crop and turn it into fuel, researchers say.

“That’s a significantly better energy balance than conventional corn ethanol has. The estimate is based on a study of switchgrass during a five-year period on 10 farms in Nebraska, North Dakota and South Dakota.

“Kenneth Vogel, a U.S. Department of Agriculture scientist who led the research, said less energy was needed to grow the tall-growing perennial grass under real-world conditions than some researchers had assumed. Nitrogen fertilizer was used on the switchgrass fields. None of them was irrigated.”

Mr. Brasher noted that, “The research was published Monday by the Proceedings of the National Academy of Sciences.”

The research item can be downloaded by clicking here.

Bill Hord reported in yesterday’s Omaha World-Herald that, “The study indicates an energy gain of 540 percent when processing switch grass into ethanol, compared to 130 percent to 140 percent for corn.

“The energy calculations take into account all products used in production, including fertilizer and diesel fuel.

“Switch grass is a tall, warm-season pasture grass that can be cut for hay. When grown for fuel production, producers allow it to reach flowering stage and cut it only once a year.

“The study also found that greenhouse gas emissions from ethanol made with switch grass were 94 percent lower than emissions from gasoline production.

“Key researcher Ken Vogel, a geneticist for the U.S. Department of Agriculture working at UNL, said he has been bombarded with media inquiries from around the world since the academy announced last week that the report would be published.”

Mr. Hord noted that, “Ken Cassman, director of the UNL Center for Energy Sciences Research, said Monday’s report was ‘landmark’ because it documents the potential for production of switch grass for biofuels.

“‘This justifies further investment,’ Cassman said.

“Cellulosic ethanol production should not jeopardize corn-based ethanol production, Cassman said.

“‘The only major threat to corn ethanol is corn prices,’ Cassman said. ‘I think if prices were to spike to $5 and above and stay there, it’s a problem.’”

Associated Press writer Brett Clanton noted yesterday that, “New energy legislation ensures ethanol will play a bigger role in meeting U.S. energy needs in coming years.

“But how big will depend on whether researchers can find a cost-effective way to make the renewable fuel from sources other than corn.

“A new study bolsters the case for making ethanol from switchgrass, a plant native to North America that grows up to nine feet tall in dense brushy patches and can thrive in a range of climates.

“Its key finding: Switchgrass yields more than five times the energy used to grow it and convert it to ethanol, making it more efficient than corn, the chief crop used to make ethanol in the U.S. today.”

Meanwhile, a short item published in Sunday’s Washington Post by Eviana Hartman, “A Promising Oil Alternative: Algae Energy,” indicated that, “With petroleum reserves dwindling, the search is on to replace gasoline with a cleaner, greener alternative. Though much eco-talk has centered on ethanol from corn and biodiesel from soybeans, the biofuel that looks more likely to replace petroleum on a large scale comes from a most unlikely place: pond scum.

“Algae, like corn, soybeans, sugar cane and other crops, grows via photosynthesis (meaning it absorbs carbon dioxide) and can be processed into fuel oil. However, the slimy aquatic organisms yield 30 times more energy per acre than land crops such as soybeans, according to the U.S. Department of Energy. The reason: They have a simple cellular structure, a lipid-rich composition and a rapid reproduction rate. Many algae species also can grow in saltwater and other harsh conditions — whereas soy and corn require arable land and fresh water that will be in short supply as the world’s population balloons.

“‘If you replaced all the diesel in the U.S. with soy biodiesel, it would take half the land mass of the U.S. to grow those soybeans,’ says Matt Caspari, chief executive of Aurora Biofuels, a Berkeley, Calif.-based private firm that specializes in algae oil technology. On the other hand, the Energy Department estimates that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles, which is a few thousand miles larger than Maryland.”

Keith Good

Comments are closed.