July 28, 2017

U.S. Circuit Court Rules in Favor of Biofuels

The U.S. Circuit Court of Appeals for the District of Columbia ruled against the United States Environmental Protection Agency Friday. Todd Gleason interviews University of Illinois Agricultural Economist Scott Irwin on how the ruling could impact biofuels production in the United States.

The U.S. Circuit Court of Appeals for Washington, D.C. under took a case to define the meaning of three words in the Renewable Fuel Standard written by the United States Congress. The three words, a phrase, are “inadequate domestic supply”. Congress through them says University of Illinois Agricultural Economist Scott Irwin granted the Environmental Protection Agency, the EPA, the right to grant a waiver allowing energy producers not to follow the law, “Which common sense would say, yes, you need that kind of escape clause in the statute that would say if a biofuel is not being produced you cannot require someone to consume it.”

The Obama Administration’s EPA interpreted the clause to also mean inadequate domestic demand, and consequently limited the mandated use of biofuels in the United States. The court ruled on how the EPA limited biofuels in 2016, however, it may be, thinks Irwin, that EPA will need to make good actions it took in 2014, 2015 and 2016. This may mean the gallons of biofuels not mandated for use in those three years will have to be produced and used says Irwin, “That’s right, and they even conveniently provided a table in the ruling with their calculations of how much mandate was waived that should not have been. In the three years this added up to 2.24 billion gallons of ethanol equivalents was at play in the cuts that have now been basically declared illegal.”

In the three years this added up to 2.24 billion gallons of ethanol equivalents at play in the cuts that have now been basically declared illegal.

It would take about 800 million bushels of corn to make that much ethanol. However, because there are two parts to the RFS relating to ethanol, it’s not likely corn based ethanol will be the big winner when it comes to making up the lost gallons thinks Scott Irwin, “Because of the E–10 blend wall I think, ultimately, the beneficiary of this will be biodiesel or more broadly speaking biomass based diesel. It has been filling the gaps in the E–10 blend wall in the ethanol mandate for a number of years and I don’t see why that would change dramatically with this rule making.”

Because of the E–10 blend wall I think, ultimately, the beneficiary of this will be biodiesel…

The back fill will require about one-point-five billion gallons of biodiesel. It would use about 11 billion pounds of feed stock. The number one feed stock is soybean oil.


July 26, 2017

Soybeans More Profitable than Corn

read blog post

Soybeans have been more profitable than corn over the last three years, and an ILLINOIS agricultural economist expects that to continue to be the case this year and next.



Gary Schnitkey has updated crop budgets for highly productive central Illinois farmland. It shows, as was the case in 2013, 2014, 2015, & 2016, that planting soybeans will make farmers more money than planting corn this year and in 2018. The cash price of corn will need to exceed $4.00 a bushel if that is to change, at least with soybeans in the high $9.00 a bushel range. Schnitkey in his farmdocDaily article, you can find that online, says there are four points to be aware of as it relates to the 2017 and 18 crop budgets.

 

  1. first, these can change as expected yields and price evolve
  2. second, repeating this, corn needs to be above four bucks if it is to really compete
  3. third, total returns from highly productive central Illinois soils won’t be as much this year as in 2014, 15, or 16.
  4. fourth and finally - cash flows are likely to be very tight this year and next.

 


Page 8 of 50 pages ‹ First  < 6 7 8 9 10 >  Last ›