Corn Outlook 2020

WEDNESDAY, JANUARY 22, 2020 The Grand Island Independent corn OUTLOOK 7C Truly caring about individual customers and helping their Ag Business succeed. O VER 115 Y EARS C OMBINED A G L ENDING E XPERIENCE ! Mike Rother Greg Ashby Colby Collins Mike Metzger Catherine Oakley - Assistant Vice President/Loan Officer, Mike Rother - Senior Vice President, Greg Ashby - Vice President Ag Lending, Colby Collins - Vice President and Branch Manager - West Branch, Mike Metzger - Vice President Ag Lending - Kearney Branch Catherine Oakley There is a reason so many ag customers do their banking with Five Points Bank. First, we are uniquely equipped to provide products and state of the art banking services to help their farm operation grow and prosper. Five Points Bank’s success with many local ag customers is due to each customer having an experienced local banker with a local banking team of customer service and technology people to make sure they get the very best in agricultural lending and great banking. We want to prove to you we are “The Better Bank!” especially when it comes to agricultural lending. You can count on Five Points Bank and Catherine, Mike, Greg, Colby and Mike. YOUR HEALTHY HYBRIDS ADVANTAGE ™ I WWW.JACOBSENSEED.COM JacobsenSeed Justin Palser District Sales Manager Nebraska Cell: 402-649-1067 308-440-7602 Email: PROUD TO BE FAMILY-OWNED WORKING FOR FAMILY FARMS OUR STRONG ROOTS TRANSLATE TO STRONG YIELDS We have always understood that plant health increases productivity. Our products are continually selected for their yields, but also their outstanding health scores when facing the threat of disease or extreme weather. Maximize your investment with our robust varieties featuring the finest genetics and best traits available. According to the U.S. Energy Information Administration, petroleum consumption in the United States increased to 20.5 million barrels per day in 2018, up nearly 500,000 barrels from 2017 and the highest level since 2007. Growth was driven primar- ily by increased use in the industrial sector, which grew by about 200,000 barrels in 2018. The transportation sector grew by about 140,000 barrels in 2018 as a result of increased demand for fuels such as petroleum diesel and jet fuel. Renewable energy consump- tion in the United States reached a record high in 2018, rising 3% from 2017, largely driven by the addition of new wind and solar power plants. Wind electricity consumption increased by 8% while solar consumption rose 22%. Bio- mass consumption, primarily in the form of transportation fuels such as fuel ethanol and biodiesel, accounted for 45% of all renewable consumption in 2018, up 1% from 2017 levels. Increases in wind, solar, and biomass consumption were partially offset by a 3% decrease in hydroelectricity consumption. The Nebraska Ethanol Board (NEB) recently said it was disappointed in the final rule setting the renewable volume obligations (RVOs) for ethanol for 2020, issued by the U.S. Environmental Protection Agency (EPA). The rule sets conventional ethanol demand for next year at 15.8 billion gallons and not at the 16.34 billion gallons necessary to immediately move the Renew- able Identification Number (RIN) market and incentivize industry growth. “The EPA missed a big opportunity to restore market faith that there will be 2020 ethanol demand at the levels laid out in the Renewable Fuel Standard (RFS) law,” said Roger Berry, NEB administrator. “We appreciate that the EPA increased the RVO by .8 billion gallons of conven- tional ethanol, but there is no evidence this addition will ultimately reflect the number of lost 2020 gallons, given the EPA’s historical practice of granting retroactive Small Refinery Exemptions (SREs) without reallocation. This ruling also does not set safe- guards into place that will ensure SREs are only granted to refineries who truly prove economic hardship.” Since 2017, the EPA has granted roughly 40%more waived gallons than the annual average of about .8 billion that were recommended to have been waived by the U.S. Depart- ment of Energy (DOE). “The EPA has now had its say on next year’s ethanol demand volumes,” Berry said. “We are going to work with our political champions and industry peers to ensure that the EPA does not grant more than .8 billion in SREs for 2020, so that there will be a solid 15 billion gallons of stable conven- tional ethanol demand next year. That outcome will help restore confidence and growth in the ethanol industry, and we look forward to seeing improve- ment as soon as possible.” “We are cautiously hopeful that the EPA will start strictly following DOE’s recom- mendations, as Secretary (Sonny) Perdue told me in person last week that 15 billion gallons of conventional corn ethanol truly means 15 billion gallons,” said Nebraska Ethanol Board Chairman Jan tenBensel. Nebraska is the nation’s second-largest producer of fuel ethanol, second only to Iowa in the production of corn-based fuel ethanol. There are 25 active ethanol production facilities in the state. Nebraska ethanol producers use more than 700 million bushels of grain to manufacture more than 2 billion gallons of ethanol each year. The state’s ethanol plants produce almost 24 times as much ethanol as is consumed in Nebras ka, and most of the ethanol produced in Nebraska is shipped to other states. In a recent effort to boost ethanol consumption in Nebraska, a new partnership between the Nebraska Corn Board (NCB) and Casey’s General Stores has been formed. Because of the partner- ship, motorists in the state will have increased access to higher blends of ethanol. Through its blender pump incentive infrastructure program, NCB provided grant assistance to help Casey’s upgrade existing fuel pumps to offer Unleaded88, a 15% ethanol blend. Twelve Casey’s locations in Nebraska have been upgraded — nine in Omaha, one in La Vista, one in Papillion and one in Norfolk. “In an environmental- ly-conscious world, filling up with ethanol is an easy way for us all to do our part for the planet and our overall health,” said John Greer, District 2 director of NCB and a farmer from Edgar. “Ethanol is a clean-burning, renewable fuel that is less toxic than tradi- tional gasoline, which is good for our air. By investing in our ethanol infrastructure, we’re not only working toward a greener world, but we’re also saving consumers money while boosting Nebraska’s economy. Ethanol is a win for everyone.” Last summer, Casey’s added Unleaded88 infrastructure to more than 60 of its locations. In Nebraska, the retailer also began offering E85 at its stores in Ogallala and Cozad. “We’re offering Unleaded88 at more stores because our guests want it. The benefits of a lower price and higher octane are hard to argue with,” said Jake Comer, fuel pricing manager at Casey’s. “Unleaded88, or E15, is the most widely tested fuel ever,” said David Bruntz, chair- man of the NCB and a farmer from Friend. “We know these fuels work well in vehicles and provide countless benefits. The Nebraska Corn Board has worked hard and will continue to work hard to ensure consum- ers have easy access to these options. We also applaud Casey’s for being an outstand- ing partner in this process.” To find all local fuel retailers offering higher ethanol blends, visit In addition to its support of Casey’s, the NCB invested in eight other fuel retail locations across the state during this current fiscal year. Each year, fuel retailers wanting to upgrade to blender pumps can fill out a grant application to be considered for the program. For more information, contact the NCB by emailing Renewable fuel growth sluggish; petroleum consumption increases David Bruntz Roger Berry Jan tenBensel John Greer Nebraska Corn Board Nebraska is better situated in terms of corn, livestock and ethanol than any other state in the nation. Together, these three com- ponents form “Nebraska’s Golden Triangle,” which serves as a powerful economic engine for our state. Corn Nebraska corn farmers are very efficient. They produce more corn than our state can use, which means some can be exported to ensure a healthy trade economy. Ethanol There are more than two dozen ethanol plants across Nebraska, producing renewable fuel and a feed ingredient that is important to the livestock industry. Livestock The cattle sector provides high-quality, corn-fed beef to consumers locally, through- out the country and around the world. ‘Golden Triangle’ serves as economic engine for Nebraska Did you know? ■ More than 99% of corn grown in Nebraska is not being grown for direct human consumption. ■ Nebraska ranks third in U.S. corn production – and corn sales account for more than $7 billion on average each year. ■ It is estimated that around 80% of corn produced in Nebraska is used within the state. ■ About 20% of Nebraska’s corn crop is fed to livestock within Nebraska (70% to cattle). ■ Nebraska ethanol plants only use the starch portion of the corn kernel. One third of every bushel used for ethanol production is returned to the livestock industry in the form of a feed ingredient called distillers grains. Nebraska Corn Board At present, ethanol productionand livestock feed are two of themainuses forNebraska corn. This arrangement, known as “Nebraska’s Golden Trian- gle” has proved to be a powerful eco- nomic engine for the state – but what are the other ways we could be using the same corn kernels to grow our economy and improve our world? Dr. Mark Wilkins askshimself thisques- tion every day. As the very first NebraskaCornCheck- off Presidential Chair, a faculty position at the University of Ne- braska-Lincoln, Dr. Wilkins focuses ondis- covering and develop- ing newways to bring value to corn. TheNebraskaCornBoardendowed Dr. Wilkins’ position under the Indus- trial Agricultural Products Center – which is comprised of UNL faculty and staff. The mission of the IAPC is to improve the agricultural economy by developing newuses for biological materials. The organization devotes resources to help companies develop and commercialize agricultural ma- terials such as corn, sorghum, and soybeans – often for products that are not food-related. A new future for corn fiber Right nowDr. Wilkins and his col- leagues at the IAPC are focusing on corn fiber. Most ethanol and bioplas- tic production processes target the starch of the corn kernel, while the fiber is typically used in feed for cat- tle and other livestock. Dr.Wilkinsbelievesbyfindingways to use corn fiber in the production of more valuable commodities such as chemicals or other products, the IAPC could raise the value of thewhole corn kernel – in turn, raising markets for Nebraska’s corn farmers. The renewable plastics revolution According to Dr. Wilkins, many parts of the world are already expe- riencing a high demand for renew- able plastics that are sourced frombi- ological materials instead of nonbiodegradable polymersmade us- ing petroleum. “And corn,” he said, “as a fairly readily available feedstock to feed those biological processes, will have a major role to play in produc- ing those types of renewable plastics.” In the past decade, Brazil hasmade strides to grow the bioplastics indus- try inSouthAmerica. Companies pro- ducing bioplastics inBrazil use sugar cane, but cornstarch is the least ex- pensive sugar source in the U.S. – which means the U.S. bioplastics in- dustry centers around corn. Instead of viewing international developments as an obstacle, Dr. Wilkins views them as opportunities for Nebraska. “I think if the demand keeps in- creasing, we can convince [compa- nies] to come to Nebraska and use cornstarch instead. It’s actually a very simple change on the front end.” UNL research develops new ways to bring value to Nebraska corn Mark Wilkins YOUR GUIDE TO ARTS & ENTERTAINMENT THURSDAYS in The Independent on your time. your TICKET