ANR Extension: Connecting with the BioEconomy
description
Transcript of ANR Extension: Connecting with the BioEconomy
ANR Extension:Connecting with the
BioEconomyCharles R. Hurburgh, Jr.Professor of Agricultural Engineering
March 27, 2007
The goals of the Bioeconomy are:
• Enhanced national security– Reducing dependence on imported
petroleum
• Improved environmental quality– Including mitigation of global climate
change
• Increased markets for agricultural crops– With the benefit of reducing need for
crop support programs
• Advances in rural development– Creating economic opportunities
where the resource is locatedCourtesy USDA NRCS
…and renewable fuels are just one of many possible biobased products
Biobased ProductsAdhesives Motor Fuels
Cleaning compounds
Packaging materials
Detergents Paints
Dielectric fluids Paper
Dyes, pigments & inks
Plastic fillers
Electric power Polymers
Hydraulic fluids Solvents
Lubricants Sorbents
The Midwest will be the leading provider of biomass feedstocks
Source: U.S. DOE
5
Corn Has Significant Potential for Biofuels
Ethanol Productivity Potential
435 Gal/Acre@ 150 bu/ac grain yield
100 Gal/Acre (2010)Stover
18 Gal/Acre (2010)Pericarp
0
200
400
600
800
1000
1200
2006 2010 2015 2020
Stover
Grain Fiber
EndospermG
all
on
s /
Ac
re
1,000 gallons / acre by 2020?
Grain Endosperm
Bu/AcGal/BuGal/Ac
1502.5390
1802.7486
2002.8560
2502.8700
Grain Pericarp
000
.454018
.5006030
.6259056
Stover
000
2.540
100
2.7560
165
390
270
Ton/AcGal/TonGal/Ac
Ton/AcGal/TonGal/Ac
0505 1010 1515 2020
Endosperm
Value Added Agriculture Program
www.iavaap.org
Value Added Agriculture Program
www.iavaap.org
Slide Title
Iowa corn processing & ethanol plants, current & planned, 10/26/06
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Sac
Linn
Lee
Ida
Tama
Clay Kosuth
Jasper
Lyon
Page
StoryrJones
Fayette
Adair
Bentonn
Wapello
Pocahontas
Osceola
Jefferson
Audubon
Washington
BuenaVista
BlackHawk
Appanoose
CerroGordo
VanBuren
Mucatine
Dickenson
DesMoines
Winnebago
Montgomery
Iowa Corn Processing & Ethanol Plant Locations, Actual & Planned. 9/26/06,
PoweshiekPolk
BooneGreeneCarrollCrawford
Plymouth
O’Brien
Woodbury
Monona
Harrison Shelby
Wright Franklin
Floyd Chickasaw
Webster Hardin
Louisa
Emmet
Palo Alto
Hancock
Worth Mitchell HowardWinneshiek Allamakee
BremerButler
HamiltonGrundy
Buchanan
Delaware
Dubuque
Jackson
Clintonn
Guthrie Dallas
Johnson
Marshall
Pottawattamie
Mills
Fremont
Madison
Warren Marion Mahaska
Keokuk
Adams Union Clarke Lucas Monroe
Taylor Ringgold
Cherokee
Calhoun
Decatur Wayne Davis
Henry
Scott
Humboldt
Clayton
Cedar
Sioux
Cass
Iowa*
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Sac
Linn
Lee
Ida
Tama
Clay Kosuth
Jasper
Lyon
Page
StoryrJones
Fayette
Adair
Bentonn
Wapello
Pocahontas
Osceola
Jefferson
Audubon
Washington
BuenaVista
BlackHawk
Appanoose
CerroGordo
VanBuren
Mucatine
Dickenson
DesMoines
Winnebago
Montgomery
,
PoweshiekPolk
BooneGreeneCarrollCrawford
Plymouth
O’Brien
Woodbury
Monona
Harrison Shelby
Wright Franklin
Floyd Chickasaw
Webster Hardin
Louisa
Emmet
Palo Alto
Hancock
Worth Mitchell HowardWinneshiek Allamakee
BremerButler
HamiltonGrundy
Buchanan
Delaware
Dubuque
Jackson
Clintonn
Guthrie Dallas
Johnson
Marshall
Pottawattamie
Mills
Fremont
Madison
Warren Marion Mahaska
Keokuk
Adams Union Clarke Lucas Monroe
Taylor Ringgold
Cherokee
Calhoun
Decatur Wayne Davis
Henry
Scott
Humboldt
Clayton
Cedar
Sioux
Cass
Iowa*
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Sac
Linn
Lee
Ida
Tama
Clay Kosuth
Jasper
Lyon
Page
StoryrJones
Fayette
Adair
Bentonn
Wapello
Pocahontas
Osceola
Jefferson
Audubon
Washington
BuenaVista
BlackHawk
Appanoose
CerroGordo
VanBuren
Mucatine
Dickenson
DesMoines
Winnebago
Montgomery
Iowa Corn Processing & Ethanol Plant Locations, Actual & Planned. 9/26/06,
PoweshiekPolk
BooneGreeneCarrollCrawford
Plymouth
O’Brien
Woodbury
Monona
Harrison Shelby
Wright Franklin
Floyd Chickasaw
Webster Hardin
Louisa
Emmet
Palo Alto
Hancock
Worth Mitchell HowardWinneshiek Allamakee
BremerButler
HamiltonGrundy
Buchanan
Delaware
Dubuque
Jackson
Clintonn
Guthrie Dallas
Johnson
Marshall
Pottawattamie
Mills
Fremont
Madison
Warren Marion Mahaska
Keokuk
Adams Union Clarke Lucas Monroe
Taylor Ringgold
Cherokee
Calhoun
Decatur Wayne Davis
Henry
Scott
Humboldt
Clayton
Cedar
Sioux
Cass
Iowa*
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Sac
Linn
Lee
Ida
Tama
Clay Kosuth
Jasper
Lyon
Page
StoryrJones
Fayette
Adair
Bentonn
Wapello
Pocahontas
Osceola
Jefferson
Audubon
Washington
BuenaVista
BlackHawk
Appanoose
CerroGordo
VanBuren
Mucatine
Dickenson
DesMoines
Winnebago
Montgomery
,
PoweshiekPolk
BooneGreeneCarrollCrawford
Plymouth
O’Brien
Woodbury
Monona
Harrison Shelby
Wright Franklin
Floyd Chickasaw
Webster Hardin
Louisa
Emmet
Palo Alto
Hancock
Worth Mitchell HowardWinneshiek Allamakee
BremerButler
HamiltonGrundy
Buchanan
Delaware
Dubuque
Jackson
Clintonn
Guthrie Dallas
Johnson
Marshall
Pottawattamie
Mills
Fremont
Madison
Warren Marion Mahaska
Keokuk
Adams Union Clarke Lucas Monroe
Taylor Ringgold
Cherokee
Calhoun
Decatur Wayne Davis
Henry
Scott
Humboldt
Clayton
Cedar
Sioux
Cass
Iowa*
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66 Planned + current in Iowa
11 Just across the borders
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Figure 1.
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Iowa corn processing & ethanol plants, current & planned, 11/20/06
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Capacity: 129% of 2006 crop
Value Added Agriculture Program
www.iavaap.org
Current Iowa Dry-Grind plants• Average production
– 60 million gal/yr• 20 mgy – 110 mgy
• Plants produce at 105-110% above rated capacity
• Plants store about 5% ofannual capacityDGS = 2.5%
• Most have outbound rail access• Few (none) have inbound rail access
Value Added Agriculture Program
www.iavaap.org
Iowa Ethanol PlantsSummary Statistics
nEthanol Producedmil gal/yr
Corn Usedmil bu/yr
DGS000 tons/yr
Current Dry-grind Plants
23 1448.0 514.3* 4386.6
Plants, expansions under construction
16 1509.5 524.3 4456.4
Wet Mills 7 1210.0 432.1 3673.2
Nearby, Iowa Draw**
6 402.0 143.6 1220.4
Subtotal Near-Term Use
4569.5 1614.3 13736.6
Announced 33 2975.0 1062.5 9031.3
Total 7544.5 2676.8 22752.7
*Operating at actual capacity, approximately 5-10% over rated capacity.**Plants in bordering counties of other states with 50% use assigned to Iowa corn.
Value Added Agriculture Program
www.iavaap.org
Ethanol plants buy 60% from farmers, want to buy more from farmers.
- Farmers must be prepared to supply over the year, in a managed way.- Will elevators be surge capacity for times when farmers are not delivering
Plants store about 5% of supply- Enough to cover temporary interruptions, no more.- Inbound grain goes right straight through to the process
Plants stored about 2.5% of DGS- Move it or else (<10% of Revenue)
Value Added Agriculture Program
www.iavaap.org
Plants did not care about specialty grains- 100 trucks/day or 200 trucks/day - Means raising the area average and consistency will be more important
Plants had absolute quality limits for US Grade factors – moisture, damage
- Large change in culture for farmers- Means no leeway for storage problems,
- Storing more grain longer.- Storage management will be important.
Value Added Agriculture Program
www.iavaap.org
Ethanol plants load rail but do not unload rail
- Grain from local area- How to manage risk – crop insurance does
an ethanol plant no good.- Increase in truck tonnages on local roads at
all time of the year.
ANR Extension Challenge
• Find and promote a balance among:
- crops and yield goals- crop production practices - processing methods, - plant operating strategies- etc.that still:
ANR Extension Challenge
• Provides efficient feed ingredient supply and competitive advantage for several livestock species.
• Does not add additional water or air pollution.
• Does not increase soil erosion or deteriorate soil quality
• Produces sufficient BioProducts
Economic Drivers
Crop Share Return to Farming (net $/acre)
$-
$100
$200
$300
$400
$500
1985 1990 1995 2000 2005 2010
Year
Crop Share Return to Farming (% return)
0.0
2.0
4.0
6.0
8.0
10.0
1985 1990 1995 2000 2005
Year
Economic DriversCalhoun County Land Values ($/acre)
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Year
Gross Adjusted 1983 = 100
So Many Things Change
• This is a real business that attracts outside capital. Wall Street knows us.
So Many Things Change
• Decisions change quickly – economics less predictable.
• Much higher risk exposure.• Real money on the table between
landlords and tenants; business practice.
• Logistical and employment issues
So Many Things Change
• Raw material storage – where and by whom?
• Supply chain discipline• No tolerance for poor quality
materials• Liability for product. Crop insurance
check does not help a processor.• $500/acre will make business more
intense.
Challenges for Extension
• Extension is a support group with only indirect connection to net income.
• Information now!• What’s my job today?• What will we not do any more?• Eliminate redundant activities• Linear management chains
Change = Opportunity
If someone came to GM and wantedTwice as many Silverado pickups
and would payTwice as much per pickup
What would happen?That’s where agriculture is now.
It’s a great time to be in agriculture!