Iowa Rules: New ASA and NCGA leaders sound off on the future.
Sep 1, 2007 12:00 PM, By Greg Lamp
We Must Reclaim Lost Acres
“The livestock industry and export buyers who have traditionally bought our products are worried about their supply, but I'm convinced we can supply energy needs and all of our end users. We all know it's not going to be $2 corn, but we really think corn growers deserve a higher price in the market,” says Litterer.
“The marketplace is going to function and drive the changes, just like it did this year when farmers planted more corn acres,” he says. “The market will work and I believe we can supply enough corn for exports, feed and fuel.”
That's not to say, however, that the focus on energy and its effect on the corn industry are only occurring in the U.S. “This is a worldwide transition,” he says. “We're going to see more corn acres in Argentina, Eastern Europe and South Africa. We're going to see a shift of acres around the world on all crops.”
On the ethanol front, Litterer doesn't see the price of crude oil dropping and that will continue driving ethanol expansion. But one of the issues ethanol will be facing, and soon, is the blenders' wall. Ethanol is currently only blended at a 10% rate, unless it's E85 (85% ethanol).
“Even in Iowa we don't use 100% of the 10% blend. We blend about 80%, and Iowa is a high ethanol user,” he says. “We need to change the gasoline reformulation to go beyond that wall and also increase the availability of E85 and the number of vehicles that can use it. We need to do that to accommodate the number of plants coming online in the next year or two. That's going to have to be resolved or the ethanol industry can't continue to grow.
“If we could go to E15 or E20, it would change the whole market dynamic in how much ethanol we could use domestically,” he says.
Although corn is easier to haul to the local ethanol plant, Litterer doesn't at all object to a cellulosic future, admittedly 5-10 years away. In fact, he sees it as an evolution of the ethanol industry.
“We think we can be part of that,” he says. “For example, utilizing corn cobs for cellulosic ethanol won't reduce the organic matter in the soil so we can continue to maintain our soil quality and reduce erosion. It looks like a good fit.”
Litterer believes one of his strengths as a leader is in implementing farm policy issues. “Face it, a lot of what happens in any industry is policy driven and there's no question that's where you can affect real change,” he says.
Current NCGA president Ken McCauley couldn't agree more. “He (Litterer) has lots of experience in public policy and his work on the farm bill has helped all of us in the past year.”
This year NCGA has language in the House farm bill that includes a revenue-based option. It sees an increased risk going forward with spiraling production costs, plus higher rents and land prices. “We'd like to see improved risk management replacing price-based subsidies,” Litterer explains. “What we're talking is improving risk management and integrating it with Federal Crop Insurance.”
He points to the Farm Safety Net Improvement Act introduced in late July by Sens. Dick Durbin and Sherrod Brown as a step in helping take farm policy to a new level. “The Senate is recognizing the potential of what we are trying to achieve,” he says. “The Durbin-Brown legislation emphasizes a market-based approach.”
Litterer believes that what he brings to the table is “a common-sense approach to issues. I also think I can move things forward and get buy-in from others. Still, it takes a lot of folks working together, not just one guy.”
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