U.S. farmers already feed the world. Now they're in an all-out race to fuel the world.
The amazing number of new biofuel plants is a prime example of how farmers are creating new markets for their own corn and soybeans.
Ethanol production already gobbles up 12% of U.S. corn. As more biodiesel plants go online, that industry will undoubtedly impact soybean markets, too.
Continued growth could be legislatively mandated, but other driving forces exist, such as a growing U.S. reluctance to continue foreign oil dependence and substituting ethanol for the fuel additive MTBE (methyl tertiary-butyl ether).
For example, as ethanol plants continue to boost demand, there's clear evidence that it affects basis in the plant's vicinity.
So if you're supplying grain for a biofuels plant, it's likely you should consider selecting seed that offers characteristics beneficial to those markets.
Several seed companies have identified corn hybrids with high-fermentable starch and soybean varieties with high oil and protein — just what biofuels production wants and needs.
However, the jury is still out about whether growers should select hybrids and varieties based solely on their characteristics for the biofuels market.
“There hasn't been much emphasis on selecting hybrids for ethanol production,” says Duane Adams, a grower from Cosmos, MN. “Anything we can do to make ethanol plants more efficient increases ethanol's competitiveness in the marketplace, and should help farmers' bottom line.”
Adams is chairman of the National Corn Growers Association ethanol committee and a shareholder in a Minnesota ethanol plant.
“Growers need more information about high-starch hybrids and whether or not those hybrids provide comparable yields to traditional hybrids,” Adams says. “We can't afford to produce a high-starch corn if it produces fewer bushels per acre.”
Randy Doyal, CEO of Al-Corn Clean Fuel, a 30-million gal./year ethanol plant in Claremont, MN, says the plant's delivery agreements are based on bushels. He'd prefer agreements based on characteristics, but he doesn't see that changing any time soon.
“As a consumer of corn, I want to buy corn based on characteristics I can use. I'm looking for a way to grade corn based on its fermentable starch,” he says. “The goal is to make the plant more efficient. It costs a certain amount of money to process corn through the facility. Corn that doesn't yield much alcohol still costs the same to process as corn that yields more.”
Both Monsanto and Pioneer have developed near infrared technology that measures fermentability of corn.
Doyal knows that high-fermentable corn hybrids do make a difference in processing efficiency. However, he says he hasn't seen any dramatic differences in production because many of the growers in his area are already growing hybrids with high-fermentable characteristics.
“I look forward to being able to measure corn's high-fermentable starch regardless of whose name is on the seed bag,” says Doyal. “I want to be able to determine if the corn has the characteristics we need. If we could do that, we could pay for hybrids that provide high performance in the plant. Until then, farmers can grow whatever hybrids they choose.”
From the seed side, many seed companies have identified existing corn hybrids and soybean varieties that have qualities that benefit biofuel production, but there hasn't been much work to initiate breeding programs.
“It's one thing to be able to characterize our hybrids, which we've done, but it's another to actively initiate a breeding program where you're selecting particular hybrids for the dry grind ethanol market,” says Gary Powell, director of new product and market development for Syngenta Seeds. “The challenge the seed industry faces is that if we develop hybrids designed for today's process, by the time that product gets to the market the ethanol industry could have moved to another process.”
Powell says Syngenta is developing an amylase corn that produces an important enzyme within the corn's kernel used in the ethanol process. “When this grain is brought into a dry grind ethanol plant, it will be mixed with conventional corn prior to milling,” he says. “We think this is a technology that could bring real value to the dry grind ethanol industry.”
This product is still in field and regulatory approval trials and the company hopes to introduce it to the market in two to three years. Currently, the company's Extra Edge program identifies seed characteristics that growers might be seeking when making their seed purchases.
“This is an opportunity for a win-win for growers and ethanol plants,” says Pat Hilliard, ethanol account manager for Pioneer Hi-Bred International. “Growers can select hybrids based on agronomics and yield, and at the same time choose a product that offers the best ethanol potential. Still, growers need to make their first decision based on yield.”
Hilliard adds that providing information about grain characteristics for growers' markets is something their customers requested. He says, “These are products growers know and trust based on yield and agronomics, so why not use those that deliver what's needed for their ethanol market as well?”
Monsanto's Processor Preferred program identifies hybrids with high-fermentable characteristics in more than 95 seed brands across the Corn Belt. According to Amy Rutherford, Processor Preferred business manager, the company is “constantly evaluating opportunities to bring ‘step change’ products to the ethanol market — like products that have significant increases in ethanol yield or DDG (dried distillers' grains) value.”
She adds that traits such as YieldGard Rootworm and Roundup Ready hybrids produce cleaner, healthier corn to the industry. The company also continues to screen for germplasm that will fit the high fermentable corn criteria.
In addition, Rutherford says Monsanto's near-infrared screening technology helps bring corn users and producers together. “As they begin to understand each other's needs, and we begin to deliver corn that offers benefits to both the grower and the ethanol plant, they understand how to work together to realize those benefits,” she says.
Many soybean varieties and corn hybrids offer characteristics that may benefit biofuels production. But ultimately, growers should still consult their local seed dealers to see what agronomically and economically makes the best sense in their specific situation.