Farming & Your Freedom

President Bush invoked the holy grail of Midwestern farmers during his State of the Union address to Congress: Ethanol. He didn't say much about it, but he included it in his litany of energy initiatives and that means a lot!
With former Nebraska Governor Mike Johanns at the helm of the USDA and plenty of strong Midwestern members of congress and senators to work in tandem, ethanol's future seems brighter than ever. Bill Clinton talked ethanol, but Washington now seems poised to walk ethanol, too.
With that in mind, it is instructive to see that the U.S. ethanol industry set a monthly production record last November, producing more than 290 million gallons, according to the Energy Information Administration. Well, hold on to my burnoose, that's a lot of mashed corn!
John Capert of the National Corn Growers Association said the production was 20% higher than the same period in 2003, and pronounced the industry as growing "at an amazing rate." By the end of November, the industry had managed to beat its 2003 production total for the entire year, 2.81 billion gallons, and the NCGA estimated that the 2004 total would be 3.6 billion gallons.
That all has to be sold somewhere, and judging from the number of new start-up ethanol plants in Iowa, there must be a plan, and it is called California. With the ban on petroleum-based MTBEs from the gasoline mix in the Golden State, ethanol is fast moving to take its place and all you have to do is hit any freeway in the L.A. area and you know that many, many millions of gallons of fuel will be expended. We grow it, we process it, we send out there to be pumped and it's all good!
With 81 ethanol plants across the nation working to provide a capacity 3.6 billion gallons per year, the future looks great. Hence, 16 new ethanol plants are under construction and more are planned. The NCGA said that when all these plants go on-line, the national ethanol capacity will be 4.35 billion gallons. Sure hope we can grow enough corn to keep them supplied and still meet the needs of feeders and the rest of the corn value-added industry!
How did all of this happen and happen so decisively? According to John M. Urbanchuk of LECG Corp., an economics and financial analysis firm, "The ethanol industry is one of the most significant success stories in American manufacturing over the past quarter-century." Ethanol has been around since about 1908, but evolved into a cottage industry by 1980, producing 175 million gallons -period.
The Renewable Fuels Association said in March of 2004 that an estimated 30% of all gasoline used in the U.S. will be blended with ethanol in 2004. It'll be significantly more in 2005.
Urbanchuk said ethanol represents the third largest component of corn demand after animal feeds and exports. It accounted for about 13% of total corn production during the 2004 marketing season. What that means is than ethanol now not only provides a "growing and reliable domestic market for American farmers, the ethanol industry also provides the opportunity for farmers to enjoy some of the value added to their commodity by further processing." He noted that farmer-owned ethanol plants account for 40% of total industry capacity. Wow!
There's good news in ethanol for the rest of the economy, too. Urbanchuk said new jobs are created as a consequence of the increased economic activity of ethanol production. The final demand resulting from "ongoing production and construction of new capacity supports the creation of more than 143,350 jobs in all sectors of the economy (in 2004)." Included are 12,000 jobs in the often shaky manufacturing sector. The folks there will make the ethanol from the corn grown by our farmers, helping create higher levels of income for Americans and the industry put an estimated $3.9 billion into the U.S. consumer's pocket in 2004.
That's not bad for a little yellow ear of corn. Messieurs Bush and Johanns and their cohorts should be able to make a lot of that in letting America and the world know that our farmers and their value-added industries contribute hugely to the world' s economy and don't simply expend subsidy checks.
I'll see ya!