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Biodiesel's
Outlook Is Bright, But Volatile
The biodiesel industry may shrink somewhat in the next
few months as soybean futures prices remain above the $11/bu. mark and
soybean oil futures hover close to 50 cents/lb., says Chad Hart, an Iowa
State University agricultural economist.
"Looking at soybean oil futures out to 2009, the prices are running
about 47 cents/lb," says Hart. "Based on what we're seeing now, soybean
oil futures prices won't likely see much reduction for 18 months to two
years. So, high soybean oil prices will likely constrict biodiesel's
profit margins and make it difficult for any expansion in the short
term."
However, good news for the biodiesel industry may be right around the
corner, says Hart. "There is a very positive sign coming out of
Washington in a bill being put forward in the House that would mandate 1
billion gallons of biodiesel be blended into the diesel supply by 2012,"
he points out.
In addition, the current high costs for crude oil and diesel fuel are
helping the biodiesel industry to stay profitable while soybean prices
remain high, he adds. "The costs to produce biodiesel are high right
now, but so are the products that compete with biodiesel," says Hart.
"As long as that remains the case, the outlook for biodiesel looks
competitive."
Biodiesel's future does look competitive, particularly in the long term,
agrees Jon Scharingson, marketing director for Renewable Energy Group
(REG), Inc. Last month, REG and its partner, East Fork Biodiesel, LLC,
opened Iowa's largest biodiesel production plant near Algona.
"We're still able to generate a profit margin even with high feedstock
prices, because of the high diesel fuel prices," says Scharingson. "The
recent $3.50/gal. price for diesel fuel is near the all-time high."
Biodiesel demand will continue to grow, both domestically and
globally, especially in the European market, from consumers who want
cleaner burning fuels, Scharingson points out. Future infrastructure
improvements will likely increase that consumer demand by allowing
biodiesel shipments to travel more economically to distant markets, he
adds.
"The main bottleneck for biodiesel right now is the distribution
infrastructure to get the product in the hands of everybody who wants
it," says Scharingson. "The industry is testing biodiesel to see if it
can be moved through pipelines. Until then, it has to be shipped by
tanker trucks and rail cars. We're in pretty good shape in the Midwest
with the infrastructure and distribution channels to blend biodiesel
with diesel, but the industry needs to make improvements in other parts
of the country."
Higher soybean prices are no surprise to those involved in the biodiesel
industry, notes Scharingson. "One of the economic drivers to support
biodiesel was to bolster the commodity price of soybeans, and that has
been a phenomenal success," he says. "So, we're excited for farmers,
because many are investors in our plants. For those who aren't, we hope
that they will see our industry is helping to boost the prices for their
soybeans and that they will pay us in return by using biodiesel products
in as large a quantity as they can."
However, farmers and truckers should be careful to only purchase
biodiesel products with an American Society for Testing and Materials
(ASTM) 6751 specification, cautions Scharingson. Doing so "ensures that
they will have a high-quality performing product."
For more information about REM, click here: www.regfuel.com/. For more
information about the Energy Bill that passed the U.S. House of
Representatives last week with incentives to encourage more biodiesel
use, click here: www.biodiesel.org/resources/pressreleases.
By John Pocock
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USDA Adjusts Commodity Prices, Exports
Higher
On Tuesday, the USDA adjusted commodity prices "up
across the board" (up 4% for corn, 2% for soybeans and 6% for soybean
oil) this month compared to last month, says Chad Hart, an Iowa State
University agricultural economist.
"USDA also projected higher commodity exports this month compared to
last," says Hart. "So we are going to see export markets for grain
maintain their demand even as commodity prices trend higher."
To read the USDA report, click here: www.usda.gov/.
By John Pocock
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U.S. And
China Increase Biofuels Cooperation
The U.S. Departments of Energy (DOE) and Agriculture
(USDA) and China's National Development and Reform Commission (NDRC)
have agreed on Tuesday to strengthen and expand cooperation on biofuels
production and use, ahead of the third U.S.-China Strategic Economic
Dialogue set to open in Grand Epoch City yesterday. This agreement
promotes energy security interests between the two countries with the
ultimate goal of significantly reducing fossil fuel consumption by
increasing the use of clean, renewable fuels, such as those derived from
biomass.
Representing the U.S. at a signing ceremony in Beijing on Tuesday, U.S.
Deputy Secretary of Energy Clay Sell signed the agreement with NDRC Vice
Chairman Zhang Xiaoqiang.
"As the two largest energy consumers and automobile markets in the
world, we are eager to strengthen cooperation with China to increase the
use of renewable and alternative fuels to power our nation's vehicles,"
Sell said after the signing ceremony. "The United States and China face
similar challenges to meet rapidly increasing energy demand and through
our joint efforts, we are partnering to maximize our nation's resources
and expertise as well as increase energy security, confront climate
change and promote economic growth."
To help achieve the president's goals and to harness each nation's
expertise, this agreement specifically encourages cooperation in biomass
and feedstock production and sustainability; conversion technology and
engineering; bio-based product development and utilization standards;
and rural and agricultural development strategies. China, the world's
third largest ethanol producer behind the U.S. and Brazil, is the first
Asian country to sign a biofuels agreement with the U.S. to accelerate
the development of second generation biofuels.
To read more about the agreement, click here: www.usda.gov/wps.
Source: USDA
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Brazil Agriculture Ministry Lowers Soy
Forecast
Brazil's agriculture ministry now projects that
country's soybean production to fall below last year's level based on
the potential for the La Niòa weather phenomenon to cause adverse
growing conditions in early 2008.
The National Commodities Supply Corp. (CONAB), the supply arm of the
agriculture ministry, on Monday pegged Brazil's 2007-2008 soybean crop
at 58.1 million metric tons, down from a previous estimate of 59.4
million tons and its 2006-2007 crop estimate of 58.4 million tons.
To read the entire article about the forecast for Brazil's 2007-2008
soybean crop, click here: cornandsoybeandigest.com/soybeans.
By Richard Brock
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2008 ASR Threat To Midwest Depends On Winds,
Weather
Soybean crops in the Midwest have yet to suffer any
economic damage from Asian soybean rust (ASR). Still, the disease was
present in commercial soybean fields late last fall as far north as
northern Iowa, northern Illinois and even Ontario, Canada, in 2007, says
Carl Bradley, University of Illinois Extension plant pathologist. Had
the disease traveled to those areas earlier in the year, it would
probably have caused some economic damage -- and could do so next year,
he adds.
"Soybean rust took a different route north this year," says Bradley. "It
went straight north from Texas, up through Oklahoma, Kansas and Nebraska
and then spread east into Iowa and Illinois."
Whether ASR will follow that same route again next year is anyone's
guess, says Bradley. He says ASR was first found in U.S. soybeans in
Louisiana late in 2004. It stayed mostly around the Southeast in 2005,
but in 2006 it followed the Mississippi River Valley and went as far
north as central Indiana. Last year brought ASR into the heart of U.S.
soybean production areas, although too late in the year to reduce
yields.
"ASR has not yet caused any economic losses in states like Iowa,
Indiana, Illinois or Missouri," says Bradley. "However, that could
certainly happen in the future if the weather south of us is conducive
to producing the disease spores, and the right weather system moves them
north when Midwestern soybeans are in a susceptible growth stage.
However, weather conditions would need to stay wet long enough for the
disease to take off here."
Growers in some southeastern states had to spray soybeans for ASR in
2005, but in 2006 conditions were too dry for ASR to cause problems.
This year, "some applications were warranted for ASR control in parts of
Oklahoma, but in other areas there was some panic spraying that didn't
need to be done," says Bradley.
Farmers who want to avoid unnecessary spray applications next year
should stay in touch with ASR sentinel plot scouting reports, "which
give an advanced warning if rust is in the area or heading our way,"
advises Bradley. For more information on ASR sentinel plot reports,
visit: www.sbrusa.net/ or www.plantmanagementnetwork.org/.
By John Pocock
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Ohio Soybean
Performance Trial Results Available Online
The Results from the 2007 Ohio State University (OSU)
Soybean Performance Trials provide good news for farmers seeking
varieties with effective resistance against Phytophthora root and stem
rot, says Anne Dorrance, an OSU Extension plant pathologist.
Nearly 30% of the entries evaluated have the ideal
Phytophthora-resistant package, and less than 15% show low levels of
partial resistance, says Dorrance, who also holds an Ohio Agricultural
Research and Development Center appointment. "This is the highest
proportion of entries in Ohio's performance trials with effective levels
of partial resistance since 1997," she says. "Partial resistance will
provide protection in all fields, in that it is effective against all
races. It works by reducing the amount of root tissue that
Phytophthora sojae can infect and never causes the stem rot
phase."
Results of the soybean performance trails can be found by logging onto
www.oardc.ohio-state.edu/soy2007/.
Results from OSU's 2007 Corn Performance Trials are also available
online. A detailed breakdown of hybrids by characteristic and region can
be found by logging onto: www.oardc.ohio-state.edu/corntrials/.
Souce: Ohio State University Extension
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Iowa Seed
Directory Offers Quality Seed Options
Farmers and gardeners looking for quality-assured seed
to plant can order a free 2007 Iowa Seed Directory from the Iowa Crop
Improvement Association (ICIA).
Seed production information from more than 100 producers is included in
this year's directory. Iowa Seed Directory listings include ICIA members
who range from farmer-owned enterprises to multinational seed companies.
The directory lists fields that were inspected for genetic identity and
purity during the 2007 season. The Iowa Seed Directory is published
annually as a resource for quality soybean, oat, wheat and native
prairie species seeds.
To order a free copy, contact the ICIA at 515-294-6921 or iowacrop@iastate.edu. The
directory also can be viewed at www.agron.iastate.edu/icia/.
The ICIA encourages consumers to request analysis information when
making seed purchases. Documentation of seed germination, purity and
presence of weed species assures the buyer that they are purchasing
quality seed.
Source: Iowa State University
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Louisiana Grower To Lead United Soybean
Board
Farmer-leaders of the United Soybean Board (USB)
recently convened their annual meeting and elected a new chairman, Ike
Boudreaux, a soybean farmer from Lebeau, LA, to lead the board in
2008.
Helping Boudreaux are: Vice Chairman Chuck Myers, a soybean farmer from
Lyons, NE; Secretary Chuck Friedrich, Aurora, S.D; and Treasurer Marc
Curtis, Leland, MS. The remaining members of the Executive Committee
include Todd Allen, West Memphis, AR; Phil Bradshaw, Griggsville, IL;
Benny Cooper, Kevil, KY; Terry Ecker, Elmo, MO; Mike Gerhart, Ephrata,
PA; and Rick Stern, Cream Ridge, NJ.
For more information about USB efforts to build a strong future for U.S.
soybean farmers, click here: www.unitedsoybean.org/Farmers/Default.aspx.
Source: United Soybean Board
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Ethanol Use Grows To 13.5 Billion Gallons by
2012
The Energy Information Administration (EIA) released
its Annual Energy Outlook 2008 (AEO2008) report yesterday, which
projects significant growth in U.S. ethanol use during the next five
years.
"Ethanol consumption grows from 5.6 billion gallons in 2006 to 13.5
billion gallons in 2012, far exceeding the required 7.5 billion gallons
in 2012 in the Renewable Fuel Standard enacted as part of the Energy
Policy Act of 2005," according to an EIA press release. "It grows to 17
billion gallons in 2030. Almost all of the ethanol is used in gasoline
blending."
To read the entire AEO2008 report, click here: www.eia.doe.gov/oiaf/aeo/index.html.
To read "This Week In Petroleum," which includes information about
heating oil, gasoline and propane prices, click here: tonto.eia.doe.gov/oog/info/twip/twip.asp.
By John Pocock
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2008 UNL Extension Crop Protection Clinics
Offered in January
University of Nebraska-Lincoln (UNL) Extension 2008
Crop Protection Clinics scheduled at 12 locations across the state will
offer timely information on insect, plant disease and weed science
topics.
The clinics are geared toward custom applicators, crop consultants,
dealers and farmers. Registration is at the door and begins at 8:15 a.m.
local time. There is no preregistration. Programs begin at 8:45 a.m. and
conclude at 3:30 p.m.
"We will deliver practical information that will help participants
improve the profitability of their operations," says Mark Bernards, UNL
irrigated weeds specialist.
Cost is $40, cash or check only, payable to the University of
Nebraska-Lincoln. Registration fee includes the 2008 Crop Protection
Clinics Proceedings, 2008 Guide for Weed Management in Nebraska, morning
break refreshments and lunch.
For more information, including specific programs at each location,
contact a local UNL Extension Office, visit the Web at cpc.unl.edu or call 402-472-1547.
Dates and locations are:
- Jan. 3, Arbor Manor, 1617 Central Ave., Auburn
- Jan. 4, Holiday Inn Express, 4005 N. Sixth St., Beatrice
- Jan. 8, Chances "R", 124 W. Fifth St., York
- Jan. 9, Quality Hotel Convention Center, 2201 Osborne Dr. E.,
Hastings
- Jan. 10, Knights of Columbus Hall, 410 W. Douglas St., O'Neill
- Jan. 11, Lifelong Learning Center, 601 E. Benjamin, Norfolk
- Jan. 15, Panhandle Research and Extension Center, 4502 Avenue I,
Scottsbluff
- Jan. 16, Keith County Fairgrounds, 1100 W. Fifth St. Ogallala
- Jan. 17, Huckleberry's Hideout, 625 S. 10th Ave., Broken Bow
- Jan. 18, Ag Center (Fairgrounds), 1308 Second St., Holdrege
- Jan. 22, Lancaster Extension Education Center, 444 Cherrycreek Rd.,
Lincoln
- Jan. 23, Christensen Field (Main Arena), West Linden and Ridge Road,
Fremont
Source: University of Nebraska-Lincoln
Extension
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OSU Extension Program Focuses On Farm
Management
The ins and outs of farm management, finances and
markets will be covered during an Ohio State University (OSU) Extension
program being held in January and February 2008.
The Professional Marketer Program consists of three two-day sessions
held on Jan. 31-Feb. 1, Feb. 11 and 13, and Feb. 28-29. Each day will
run from 8 a.m. to 4:30 p.m. at the Clinton County Agriculture Service
Center in Wilmington, OH. Registration is $150 and includes all program
materials, lunch and refreshments.
The program features intensive market training from OSU Extension
specialists, as well as the top marketing consultants throughout the
nation. Topics that will be covered during Session I include developing
a marketing plant, hedging forms and working with a broker, determining
your financial situation, selecting a broker, breakevens and enterprise,
intergenerational transfer, introduction to futures and options/basis
and fundamentals of livestock marketing. Topics covered during Session
II include pricing strategies, crop insurance and technical analysis.
Topics covered during Session III include ethanol, contract
negotiations, weather and markets and marketing clubs.
OSU Extension specialists participating in the program include John
Yost, Fayette County Extension educator; Tony Nye, Clinton County
Extension educator; Don Breece, farm management specialist; economist
Barry Ward; Chris Zoller, Tuscawaras County Extension educator; and
economist Matt Roberts.
In addition to the lectures there will be several hands-on activities
that will guide participants through the process of developing a
personal marketing plan. For more information about the program or to
register, contact the OSU Extension Clinton County office at
937-382-0901 or the OSU Extension Fayette County office at 740-335-1150,
or log on to clinton.osu.edu/ag/ag.htm.
Source: Ohio State University
Extension
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Soybean Exports Come In Small
Packages
Soybean exports are a big contributor to the U.S.
soybean farmer's profitability. The 2007 marketing year brought record
soybean export levels topping out at over 1.4 billion bushels.
U.S. soybean farmers are working to continue to increase their
profitability by making the export process even more efficient.
Containerized shipping is the process of shipping soybeans in small
containers for specific requests. This may not seem like a big deal, but
this innovation is only available through the U.S., and it offers
importers several attractive advantages, such as the ability to order
customizable amounts of soybeans and quicker turnaround times for their
orders.
Source: United Soybean Board
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Kansas Ag
Profitability Conferences Convene
A series of Ag Profitability Conferences, organized by
Kansas State University Research and Extension, have been slated for
various locations around the state.
The one-day conferences are designed to provide the most recent
research-based economic information to agricultural producers,
agribusiness owners, lenders, and others in agriculture who are
interested in maximizing profits. The conference dates, locations and
contact telephone numbers are:
- Jan. 15 -- McPherson; 4-H Building at Woodside & Hickory;
620-241-1523
- Jan. 29 -- Beloit; Municipal Building at 119 N. Hershey;
785-738-3597
- Feb. 7 -- Colby; Colby Community Building at 285 E. 5th St.;
785-460-4582
- Feb. 11 -- Onaga; Onaga Senior Center at 200 Bypass Rd.;
785-457-3319
- Feb. 12 - Scott City; Wm. Carpenter 4-H Building; 620-872-2930
- Feb. 13 -- Pratt; Pratt Co. 4-H Center/Fairground at 81 Lake Rd.;
620-672-6121
Information about speakers and pre-registration at each location is
available on K-State's Agricultural Economics' AgManager Web site at: www.agmanager.info/events
(or, by clicking the graphic at the bottom on the front page of www.agmanager.info).
Source: Kansas State Research &
Extension
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7-ft. Soybeans Make Good
Lumber?
Having successfully turned pieces of giant soybean
stalks into charcoal briquettes, Agricultural Research Service chemical
engineer Justin Barone now believes they would make good fiberboard and
other wood-substitute products, as well.
ARS geneticist Thomas E. Devine took the plants to Barone after noticing
they had a rare ability to stand up straight all season, despite their
unusual height of up to 7 ft. Soybean plants often lodge -- fall down --
as they grow taller.
To continue reading this article about the potential for using soybeans
as a lumber product, click here: www.ars.usda.gov/is/pr/2006/061122.htm.
By Don Comis
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Soybean-Based Gift Products: A Note From The Soybean
E-Digest Editor
I've been looking for soybean-based products to give
as potential gifts to family members for Christmas, but so far I've only
come across the Tofu bear suggested by the Illinois Soybean Association.
If you're familiar with any other soybean-based gift ideas and where I
or others can buy them, preferably online, then please drop me a note
with the product and the Web link. Better let me know soon though,
Christmas is only 12 days away!
As always, if you have any other ideas on what you'd like to see covered
in a future issue of the Soybean E-Digest, or if you have
concerns or questions about this issue, please write me (John Pocock)
at: jpocock@csdigest.com.
Thanks for your readership.
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