High fuel costs and low commodity prices have all of us in agriculture thinking. Our bottom line, whether as a producer, supplier, or service provider is impacted by these very issues.
On Wednesday, November 16, the Cornbelt NAMA chapter hosted a panel discussion on the benefits, drawbacks and potential of ethanol and biodiesel fuels. The event took place at Linn Co-op Oil in Marion, Iowa. The audience ranged from those producing the commodities to those supplying the producer with services and products to those utilizing the end product.
The interactive panel discussion was moderated by Rich Balvanz with Ag Management Services. John Airy and John Heisdorffer provided not only a local producers perspective but a state and national perspective based on their involvement with the Corn and Soybean Associations. Hawkeye Renewables was represented by Bruce Rastetter, CEO, who has an operating ethanol plant in Iowa Falls and will soon have a new plant in Fairbanks, IA. The Petroleum Manager for the Linn Co-op, John Airy, shared the perspective of the supplier of the end product.
The co-op, celebrating its 75th year has recently installed an E85 fuel pump. E85 is a blend of 85% ethanol and 15% gasoline. The price is under that of the traditional gallon of gas or gas blend and can be burned by vehicles that are equipped to run on any ethanol blend up to 85%. These vehicles are referred to as Flexible Fuel Vehicles and are offered by all the major car manufacturers. The limit to this fuel is its availability. Very few stations supply this product making it difficult for the average consumer to take advantage of its benefits.
How does the relationship between renewable fuel plants and producers work? Ethanol/biodiesel plants located in Iowa have a sure supply of inputs to make their product from. Producers, many of whom have invested in ethanol plants, have a source to sell their commodity to. Having an additional avenue to sell product impacts commodity prices favorably for all producers as the technology is accepted and expected by consumers as a fuel. The feed by-product remaining after the ethanol has been processed is sold to livestock producers located near the plant.
Technology and the resources available in Iowa provide the perfect marriage for production of renewable fuels and commodity supply. Is the marriage made in heaven? Who knows? But as consumers demand cheaper fuel alternatives and producers lobby to make fuel blends like E85 more available it could be another feather in sustainable agriculture’s cap.