Ingredion Nixes Ethanol at Oldest US Biofuel Plant
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A rising tide may raise all ships, but rising corn prices are forcing some ethanol producers to consider abandoning ship. Just ask Ingredion.
The ingredient giant announced this week it will end ethanol production at its Cedar Rapids, IA facility. A letter sent to suppliers made the reasoning plain as day: Gas demand is too low and corn prices are too high.
By the numbers:
→ US Energy Information Administration (EIA) reports 2020 ethanol production averaged 900,000 barrels/day, a 13%drop from 2019.
→ Even as production returned to 87% of the 3-year average after the initial COVID-19 shock, EIA data reveals demand is not recovering to pre-pandemic levels.
→ US corn prices continue to hover around $5, a welcome sign for farmers but another hole in the ship for ethanol.
Where this goes: Gasoline demand is unlikely to increase anytime soon as winter sets in. And turmoil in the Argentina corn export market plus dry South American weather will keep corn prices high. Unless next week’s WASDE report slows market momentum, don’t expect ethanol execs to put away the life vests for now.
+ On the bright side: Not all is lost. The 126-year-old facility in Cedar Rapids has survived fires, floods, and recessions. Ingredion plans to continue producing corn-based industrial goods on the premises.
COMMODITY CORNER
*as of market close 1/7/21
QUICK HITS
→ Argentina is a hoarder. Farmers of the South American country are planning a 72-hour strike to oppose the government’s halting of corn exports until March 1.
→ Flexiv flexes with Series B funding. The general-purpose robotics startup raised over $100 million with funding from agribusiness investors who see potential for broader use cases in farm automation and animal protein production.
→ Syngenta lends a hand. The global agribiz donated freezers to hospitals in Iowa and North Carolina to maintain the frigid storage temperatures for the COVID-19 vaccine.
→ Beef boosts biosecurity toolbox. The Beef Quality Assurance program launched a daily plan template for disease prevention to aid in goals for
animal welfare and reducing production losses.
→ The 5th Round of the Farmers to Families Food Box program will send $1.5 billion worth of food across the country to help families who need access to nutritious meals as they recover from pandemic-related
job loss.
AG POLICY
USDA's Cross-Country Move Conundrum
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It was controversial then. It is controversial now.
In 2019, you likely remember when two arms of the USDA, the Economic Research Service (ERS) and the National Institute of Food and Agriculture (NIFA), were moved out of Washington, D.C. to Kansas City. The move was largely due to
the Trump administration’s policy focuses. How’d it go?Not great.
The move caused mass resignations, resulting in a loss of staff expertise plus lots of unfinished research projects.
And morale? Well, it’s like playing limbo – it keeps getting lower.
In mid-August a spokesperson reported 172 staffers, only 52% of a complete department.
Those who remain at the agency say the move “affects their research every day.”
What’s ahead: Biden’s ag agenda has one hot topic - climate change - that ERS & NIFA are intimately familiar with. So he and his Ag Secretary nominee, Tom Vilsack, have some deciding to do. Do they move the teams back to D.C.? Does Kansas City remain home? Will a hybrid approach be the way? Time will tell.
FRIDAY'S FEATURED GIGS
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JUST FOR FUN
Regenerative agriculture gets tossed around a lot these days. But we gotta believe this post-holiday recycling method is a picture perfect example.
Goats are making the most of 2021 by gobbling up 'Vitamin C-packed' evergreens across the country. The fir-feasting really takes holiday leftovers to a whole new level.
"You throw it in there and they’re like piranhas. It’s like a feeding frenzy,"noted one owner.
CREDIT: FOX 17 WXMI
MAGNETIC'S MUST-SEE STUFF
Free registration is the silver lining of a virtual American Farm Bureau Convention next week. Sign up for #AFBF21 to hear Sara Evans & Phil Vassar perform or listen to keynotes from Dirty Job’s Mike Rowe or Land O’Lakes’ Beth Ford.
Do you speak sows, boars, and piglets? SowBridge might be for you. The year-long swine education series is for swine production gurus hoping to up their game. Registration ends Jan 20.
CropFlix: Coming To A Laptop Near You. Illinois Extension’s annual crop conference is chock a-block full of management best practices and market outlooks. Programs are virtual and on-demand.
