Biodiesel's Demand for Soybean Oil Worth Billions to Farmers

A new study funded by the United Soybean Board (USB), St. Louis, and soybean checkoff proves the value of the biodiesel industry to soybean farmers. According to the study, U.S. soybean farmers received an additional $2.5 billion in net returns over the last four years due to the biodiesel industry's demand for soybean oil. This demand added up to 25 cents in support for the per-bushel price of soybeans.

Soybean oil remains the dominant feedstock for biodiesel production, and the soybean checkoff has funded a large portion of the research and promotion of biodiesel through the National Biodiesel Board (NBB). USB Domestic Marketing Chair Lewis Bainbridge says this study proves the value of those efforts.

"We commissioned this study because we wanted to find out how much soybean farmers were benefiting from the checkoff's investment in biodiesel," said Bainbridge, who grows soybeans in Ethan, S.D. "And the results of the study exceeded our expectations. This is a significant return on investment for soybean farmers."

Centrec Consulting Group, LLC, conducted the study with funding from USB's Domestic Marketing program.

Besides looking at the biodiesel industry's past effects on the soybean industry, the study also aimed to predict this relationship going forward. Because the price of petroleum diesel has such a large influence on the price of biodiesel and soybean oil, the study asserts that the biodiesel industry has essentially created a new floor for soybean oil prices.

The Food and Agricultural Policy Research Institute at the University of Missouri says soybean oil will be used as the feedstock for approximately 54 percent of the biodiesel produced in marketing years 2009-2013. But, regardless of how much soybean oil is used for biodiesel production, a healthy biodiesel industry will, in turn, add value to soybean oil. Even as other feedstocks gain market share for biodiesel production, prices for soybean oil and whole soybeans could continue to receive support from biodiesel production.

Additionally, the study found that higher demand for soybean oil led to an increased supply of soybean meal, resulting in meal prices dropping by $19 to $45 per ton.

"Any lowering of the price of inputs for the animal agriculture industry is a plus," Bainbridge said. "The swine and dairy industries have had a tough time lately. This is a benefit for them. Every little bit helps in the poultry and livestock industries as far as decreasing their costs. And this demonstrates how biodiesel demand can have a positive impact on this important aspect of our food supply."

The study also accounted for the possibility that biodiesel demand for soybean oil will decrease due to a proposed regulation by the Environmental Protection Agency that limits the use of vegetable oils for meeting the draft federal Renewable Fuel Standard. Use of soybean oil in biodiesel manufacturing could fall by approximately 1.5 billion pounds by 2013 if this regulation is not revised. Soybean farmers could see net returns decrease by about $2 billion from projections over that time period.

Two summaries of the checkoff-funded study, "Soybeans & Biodiesel: Key Price Relationships," and "Economic Impacts of Biodiesel Production on the Soybean Sector," can be viewed on the soybean checkoff Web site at www.unitedsoybean.org.



Nebraska Soybean Association taking comments to EPA at Husker Harvest Days
Soybean farmers, biodiesel supporters urged to stop at Ag Commodities building on Main Street to submit comments asking EPA to correct flaws in proposed Renewable Fuels Standard regulations.

The Nebraska Soybean Association is urging soybean farmers and others who support the development and use of soy biodiesel to submit comments to the Environmental Protection Agency in response to flawed components in the agency’s proposed Renewable Fuels Standard (RFS) regulations.  Those attending Husker Harvest Days Sept. 15-17 can stop by the Nebraska Soybean Association (NSA) booth in the Commodities Building on Main Street and submit comments electronically on site – or sign a post card that the association will forward to EPA in Washington, D.C.

For those not at the show, comments can be submitted by going to the American Soybean Association’s website – www.soygrowers.com.  “Thousands of soy biodiesel backers across the country have submitted comments, but we need to double that before the comment period ends September 25. This is a critical issue for the future of biodiesel and we need to let EPA know we’re paying attention and demanding improvements to the current proposal,” said Debbie Borg, president of the Nebraska Soybean Association and a farmer from Allen.

Soy biodiesel and renewable fuels supporters argue that flaws in EPA’s proposal for the expanded RFS, known as RFS-2, would do long-term damage to the industry and slow the United States’ move to renewable fuels.  “One of the big issues surrounds indirect land use change,” Borg said. “EPA is using dated data in their soy biodiesel models, does not properly account for increasing crop yields and ignores other factors that drive global markets. You cannot develop good, sound policy based on poor assumptions and best guesses. EPA needs to step back and rethink its RFS-2 proposal.”

Borg also noted that the proposal contains a major error pertaining to the direct emission calculations for nitrogen in soybean production, does not take into consideration uses for the soy biodiesel co-product glycerin and creates unnecessary feedstock certification requirements.  "Farmers and everyone who believes in the future of renewable fuels and soy biodiesel needs to add their voice to this campaign, and do so quickly. EPA needs understand that we need good science and good numbers, not a guesstimate,” Borg said. “So if you are at Husker Harvest Days, please stop buy and submit comments or sign a postcard, or go to www.soygrowers.com right now. We can’t afford to let our future be determined because we sat on the sidelines.”



Fall is Good Time to Control Weeds
Steve Tonn, University of Nebraska-Lincoln Extension in Washington County


Fall is the safest time to control weeds with herbicides.  In addition to obtaining excellent weed control, the potential for herbicide drift damage to non-target plants is lessened.  Most field crops and gardens are finished by the end of September and the current year’s growth on perennial shrubs and trees is hardened off for the winter making them less susceptible to damage.  Many weeds in the home landscape, lawn and pasture are best treated in the fall.  Weeds such as dandelions, clover, ground ivy, Canada thistle, Platte thistle, wavyleaf thistle, musk thistle, plumeless thistle, tall thistle, yellowspine thistle, henbit, shepherd’s purse, pennycress and bindweed are best controlled by fall herbicide applications.  In the fall, the plants begin moving carbohydrates produced by photosynthesis to the roots for storage instead of to the upper plant parts.  Herbicides applied in the fall are transported to the roots along with the carbohydrates, killing the entire plant instead of the just the parts above the soil surface.   

When only a few weeds are present, they often can be controlled by pulling or digging.  Spot treatment (spraying individual weeds) can save money and be more environmentally friendly when only a few weeds are scattered throughout a landscape, lawn or pasture.  For more severe weed problems, applying herbicides to larger areas is more efficient and practical.  Just be careful when spraying large areas that the herbicide does not drift or is accidentally sprayed on shrubs, flowers, or ornamental plants in the home landscape.  When using herbicides, follow all label instructions for use, application and disposal.  For information on specific herbicides to use for controlling these undesirable plants, contact your county UNL Extension Office.



NMPF Urges Senate to Spend $350 Million Buying, Donating Cheese
Analysis Indicates USDA Purchases, Donations Would Be Most Effective Use of Money

In an effort to help both dairy farmers and needy Americans, the National Milk Producers Federation is urging congressional leaders to direct $350 million dollars toward the purchase of cheese, which would then be donated through food banks and other charities to help feed the hungry.

In a letter sent Wednesday to Senate and House appropriators, NMPF said that a $350 million amendment offered last month by Sen. Bernie Sanders (I-VT) to an agricultural spending bill would be most effective if used to purchase consumer cheese products, such as American cheese and mozzarella. According to an analysis done by NMPF, appropriating that money to USDA for purchasing products commercially would enhance dairy farmer income by $1.3 billion over a period of several months.

“It is dramatically clear from our results that the purchase of cheese for use in domestic feeding programs would provide the biggest benefit to the producer milk price at this time,” said Jerry Kozak, President and CEO of NMPF, in reference to NMPF’s analysis of how to maximize the value of any additional appropriations directed toward the dairy producer sector. NMPF estimates that the typical dairy producer would see an increase of $0.65/cwt. as a result of such an approach.

In contrast, using the $350 million to increase direct payments to farmers, or to supplement the Dairy Product Price Support Program, would only increase farmer income by $335 million and $185 million, respectively. The wording of the Sanders amendment does not specify how USDA must use the one-time appropriation, so NMPF sent the letter to members of the Senate-House conference committee that will finalize the Fiscal Year 2010 spending bill.

In addition to boosting dairy farmers’ income in a year when they are faced with a $12 billion loss in sales, the proposed cheese purchases “would provide a huge and targeted nutritional benefit to millions of food-insecure American families during this time of national economic hardship,” NMPF wrote.

Because government food stamps often run out prior to the end of each month, “food banks are another means for feeding these individuals. Unfortunately, commodities available for food bank distribution are limited by funds and availability. USDA purchasing of surplus cheese is an excellent opportunity to provide another source of a nutrient rich protein to the food banks,” NMPF wrote.



NMPF Calls On USDA to Finally Implement Promotion Assessment on Dairy Imports

NMPF has renewed its call for the U.S. Department of Agriculture (USDA) to finally implement the long-delayed promotion checkoff on dairy imports, seven years after the measure was first passed into law.

The USDA issued a Proposed Rule in May, and invited public comment on the measure, which was first written into law in the 2002 Farm Bill, and was later affirmed in the 2008 Farm Bill. But a year after the most recent Farm Bill was approved, the import assessment is still languishing. Now, some have called for a farmer referendum on the entire promotion checkoff in order to justify the assessment on imports.

"The history of efforts to implement the assessment is filled with denial, disinformation, and delay," said Jerry Kozak, President and CEO of NMPF. "All we have ever wanted is to have importers of foreign products pay to help promote the U.S. dairy market from which they benefit, the same as our farmers do. But importers continue to grasp at every straw they can to further impede the process."

Kozak said that some comments submitted to USDA as part of its rulemaking process suggest that the department should hold a national farmer referendum before implementing the import assessment. These comments argue that the promotion program approved in previous referenda is not the same program as will exist once USDA implements the import assessment. Other comments also have expressed concern that state- and regionally-specific promotions, such as those administered by the Wisconsin Milk Marketing Board and the California Milk Advisory Board, may no longer be allowed if imports are assessed.

NMPF said such comments "are part of the continuing misinformation being spread to scuttle this initiative, and have no merit. There is no valid reason to conduct a lengthy and expensive referendum process that ultimately is paid for by our farmers," Kozak said. "Given the extensive history behind implementing this import assessment, any referendum would only serve to further delay implementation since any referendum will most certainly pass."

 

NMPF Backs New Senate Legislation to Impose Tariffs on Milk Protein Imports

At the beginning of August, NMPF endorsed new Senate legislation, S. 1542, to impose tariffs on imports of Milk Protein Concentrate (MPC), casein, and caseinates.

Sen. Chuck Schumer (D-NY) introduced legislation called the Milk Import Tariff Equity Act, which would create tariff-rate quotas on foreign dairy proteins that currently come into the U.S. in unlimited quantities. Since 2001, NMPF has supported the passage of the MITEA in order to close a loophole in the U.S. dairy sector allowing certain dairy proteins, such as MPC and caseins, to enter the U.S. and disrupt farm-level prices.

The legislation contains language directing the U.S. government to ensure that the new TRQs are consistent with the U.S.'s World Trade Organization commitments. The tariff rates would be consistent with existing U.S. tariffs on similar products, such as nonfat dry milk.



Call Flu ‘H1N1’ Not ‘Swine’ Flu, USDA Demands

U.S. Agriculture Secretary Tom Vilsack today in a media briefing on the novel H1N1 flu urged reporters to refer to the virus by that name and not “swine” flu.

“The job of the media is to get it right and not necessarily to get it convenient,” said Vilsack. “To get it [the virus name] right, it’s H1N1. It is fundamentally different [from swine flu], it’s unique, we’ve never seen it before.”

The secretary told reporters that calling the virus “swine” flu “upsets the markets, it upsets these producers, and it didn’t have to be. It’s just as easy to say ‘H1N1’ as it is to say ‘swine.’

“Some media outlets have been responsive and sensitive to this, but there’s really not been a concerted effort by the media to do a good job, a correct job of making sure this is characterized properly.”

Days after the H1N1 outbreak was first widely reported April 24, the World Health Organization named the virus “Influenza A,” and the World Organization for Animal Health said it never should have been named “swine” flu.

“I want folks who are in this business of conveying messages,” said Vilsack, “to understand that behind that message there is a family today … wondering how they’re going to be able to pay the bills when they continually sell pork for less than what it costs to produce, and they continue to get hammered for something that they have absolutely nothing to do with.”

Cash hog prices fell sharply in the three weeks following initial media reports of the H1N1 flu outbreak, as consumer demand for pork dropped and some U.S. trading partners closed their markets to U.S. pork over fears of the media misnamed “swine” flu. The total of actual and projected pork industry revenue reductions from April 24 to the end of 2009 is nearly $2.2 billion.

According to the Centers for Disease Control and Prevention, H1N1 flu is not transmitted by food, and people cannot get H1N1 from eating or handling pork or pork products.

“The U.S. pork industry is grateful to Secretary Vilsack for his strong words to the media about using the term H1N1,” said National Pork Producers Council President Don Butler. “With the fall flu season weeks away, it is imperative to the livelihoods of America’s 67,000 pork producers that the novel H1N1 influenza be referred by its proper name.”



Iowans Called to Testify Before Senate on Carbon Credits, Global Warming

David Miller, Iowa farmer and Iowa Farm Bureau Federation (IFBF) director of research and commodity services, testified before the Senate Committee on Agriculture, Nutrition and Forestry in Washington, D.C. Wednesday, concerning proposed Global Warming legislation and a Cap and Trade System. As chief science officer for AgraGate Climate Credits Corporation, an affiliated company of IFBF, Miller gave his input on ways to structure and streamline the carbon credit program so that it would be an incentive to farmers and benefit the soil.

Farm Bureau supports a practical, voluntary, market-based carbon credit trading system rather than a cap and trade system. Currently 4,000 Iowa farmers are participating in the AgraGate carbon program which trades carbon credits on the Chicago Climate Exchange (CCX).

Miller indicated that nationally more than 16 million acres have been compensated for providing environmental services through the CCX enrollment, verification and carbon credit sales process. "Market transparency is critical to the smooth operation of a carbon market, so that prices are publicly reported and readily available. The only offset market that currently offers that transparency is the Chicago Climate Exchange. Additional efforts to streamline the process would no doubt make it easier to expand the program," said Miller.

He also indicated that right now offsets are valued differently for soil, forestry, or methane and value can even vary according to geographic location. "All these variances increase the transaction of costs associated with marketing carbon offsets. The end brings fewer returns to the farmer or rancher hoping to enroll. That's no incentive," said Miller.

"Term credits are another hurdle for those who hope to enroll working farmlands in carbon offset markets. Our analysis shows term credits will be highly discounted by the marketplace, especially if the expectation is that credit prices in the future will be higher."

Miller called for clear, simple protocols or rules which assist in the record keeping of all offset sources. Since it is the active growing of crops, grass and trees which take carbon from the atmosphere in the first place, it is essential to protect income from these production activities to sustain any carbon-sequestering activity while ensuring the continuation of affordable food, fiber and fuel for a growing world population.

Lengthy contracts for carbon enrollment are another factor in hampering enrollment, said Miller. "In Iowa, more than 60 percent of the farmland is rented by the operator with the vast majority on one-year renewable leases. Requiring contracts to be longer than the typical five-year carbon contract is too long and will significantly reduce participation.

And finally, Miller called for USDA-developed offset standards and protocols for biological sequestration regarding methane. The agency already oversees standards for grains, livestock and other agricultural markets and should remain the agency in charge of setting standards for carbon market offsets."



House Passes Wind Energy Bill, Legislation includes Smith amendment for transmission of renewable energy

Congressman Adrian Smith (R-NE) today announced the House of Representatives has passed H.R. 3165, the Wind Energy Research and Development Act, legislation designed to help our nation’s infrastructure make more efficient use of wind energy.

The legislation includes provisions authored by Smith which encourage research and development to efficiently create high-voltage transmission of wind energy generated in Nebraska to other parts of the country.

Nebraska ranks sixth in wind energy potential, behind North Dakota, Texas, Kansas, South Dakota and Montana, but lacks transmission capacity.  Smith’s language helps foster new technologies allowing Nebraska to fully realize its energy potential.

“Nebraska has tremendous wind energy potential, but our energy infrastructure needs to have the ability to transport this energy throughout the country.  Otherwise, it is the equivalent of building a restaurant in the middle of a pasture.

“Wind energy should be part of our nation’s diverse energy portfolio, which is why I want to encourage research and development into new technologies allowing us to make the most of our natural energy resources,” Smith said.



Parents: Teach Food Safety in the Kitchen
 
With school starting, parents can benefit from some continuing education about cooking safe, delicious hamburgers – and passing along food preparation skills to their children.  A national survey released today indicates most consumers were “home-schooled” on hamburger preparation, with 57 percent of consumers saying a parent taught them how to cook burgers. Another 29 percent said their hamburger-making skills were self-taught.  Hamburgers and other ground beef products should be cooked to an internal temperature of at least 160 F, as measured by an instant-read meat thermometer. However, only 13 percent of consumers in this latest survey correctly identified 160 F as the proper cooking temperature for ground beef to ensure safety, and only 9 percent said they learned to use a meat thermometer to determine when a hamburger is done.
 
“In the beef industry, we know that ‘the way it has always been done’ is not good enough when it comes to food safety. That’s why we invest in a wide range of initiatives to ensure we continue to produce the safest food possible,” said Mandy Carr, Ph.D., executive director of beef safety research for the National Cattlemen’s Beef Association. “Consumers can be part of the food safety innovation process by following proper in-home food safety practices, including cooking ground beef to 160 F.”
 
The survey also showed retail establishments are getting the word out about the best in-home food safety practices. Half of survey respondents mentioned seeing information in a supermarket about proper handling and cooking of fresh meat. The top two tips or techniques consumers said they saw in supermarkets were related to hand washing and cooking meats to recommended temperatures using a meat thermometer.  The survey was conducted from July 30-Aug. 4, 2009. The national survey of 1,007 American adults including 971 beef eaters had a margin of error of +/-3.2 percent and was funded by The Beef Checkoff Program.