WBIA BLOG

The numbers don’t add up

The Renewable Fuels Association recently compiled a report that examined the nonexistent relationship between corn prices and retail food prices for dairy, poultry and eggs, pork and beef and found that “fluctuations in corn prices do not significantly affect consumer food prices.” We also concluded that there is “no relationship between corn demand for ethanol and retail food prices.”

The report revealed:
Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.
Retail prices for other items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from porcine epidemic diarrhea virus. These retail price increases have occurred at a time when corn prices have been plunging.
Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.

So, if there is no apparent link between corn prices and retail food prices what causes changes in food costs for American consumers?

Transportation costs.

Which, thanks to the ridiculous monopoly held by Big Oil, means that fuel prices and energy costs have a much bigger impact on the price of our food than any other single factor. Just how closely linked are petroleum prices and food costs?

Since 2000, the U.N. food index and world crude oil prices have had a near-perfect correlation (0.97 coefficient).

foodvfuel2014rfa

Thanks to our friends at the Renewable Fuels Association for their research.

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Big Oil’s misinformation

The long stated myth that ethanol is to blame for higher food prices has been most recently debunked by new data from the Food and Agriculture Organization of the United Nations’ international food price index.

According to the FAO, in the past year, domestic grain prices have gone down about 9 percent, but meat prices are over 20 percent higher – all of this in a time when national ethanol production has risen slightly in the US.

Big Oil is spending millions of dollars trying to con American consumers into believing that ethanol production raises the price of their food. They are basing their campaigns on lies and misinformation in an effort to limit consumer choices at the pump.

Domestic prices for corn and other grains are dropping quickly while meat prices for consumers are up 11.6 percent in the same time period. Clearly, grain pricing has little to do with what consumers end up paying as food prices in most of the US are up 2.5 percent compared to last year while farmers are struggling to make a profit.

“Corn prices are below the cost of production for most farmers, and ethanol is selling approximately $1 per gallon less than the gasoline on the wholesale marketplace,” said Tom Buis, CEO of Growth Energy. “The unrelenting deception coming from these trade associations to continue to perpetuate this lie to mask their growing profits at the expense of the American consumer is deplorable. Their greed and deception knows no boundaries. It’s time for Big Oil and its Big Food allies to begin telling the truth.”

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Gasoline gives better return on investment than ethanol – Our Response

In a recent letter to the editor that appeared in the Green Bay Press Gazette a few statements were made that we at the Wisconsin Bio Industry Alliance would like to address.

The letter brought up ethanol’s energy return on investment based on a ratio comparison to gasoline. But, if ethanol provides lower power than gasoline, why do both IndyCar and NASCAR use it to boost horsepower?

Without losing any horsepower or speed on the track, IndyCar Series cars burned 20,000 fewer gallons of fuel using ethanol than previous seasons using methanol.”IndyCar

The transition to the biofuel reduced on-track carbon emissions and teams report an increase in horsepower.”NASCAR.com

American-Ethanol-flag-922x520.jpg.main

 

The letter also mentions ‘subsidies:’

“If ethanol is such a good idea, then get rid of the government subsidies and mandates and let the marketplace determine whether this is a viable product.”

The truth is:

the $0.45 per gallon VEETC (known as the Blender’s Tax Credit since it was paid to oil companies and not to farmers or ethanol plants) was terminated by Congress in December 2011, along with the $0.54 per gallon tariff that protected US ethanol producers from heavily subsidized Brazilian sugarcane ethanol. You are probably aware that commencing January 1, 2012 the ethanol industry received no subsidies at all from the federal government on a per-gallon basis.” – Eric McAfee

On top of that,

“Compare the biofuels industry to the oil and gas industry, which receives more than $100 billion per year of direct cash subsidy from the US taxpayer: 1) 100% tax-free earnings using Master Limited Partnerships to own facilities and pipelines (MLP’s are illegal to use for biofuels facilities); 2) accelerated tax write-offs for well drilling (illegal for corn farmers and ethanol plants); and 3) more than $100 billion per year of military protection for shipping lanes and foreign oil fields.” - Eric McAfee

The letter mentioned the “food vs fuel” myth, too:

we are converting our food supply into gasoline when corn prices have caused food produced from corn to increase in price by 10-25 percent leading to food riots in Mexico because of the increase in the cost of corn tortillas.

Well…

USDA found that biofuels like ethanol were only responsible for .2 percent of the 4.8 percent increase in grocery bills during the first four months of 2008.” – Growth Energy

dollar

 

The reason behind the majority of the increase in corn prices was due to speculation and rising fuel costs.

The World Bank — who published a research paper several years ago claiming biofuels were to blame for rising food prices — reversed its position recently with a new study entitled Placing the 2006/08 Commodity Price Boom into Perspective. The study’s authors found that “the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called ‘financialization of commodities’) may have been partly responsible for the 2007/08 spike.” – World Bank (Page 2 of PDF)

ethanol use of corn

 

Ethanol is a crucial part of a sensible approach to fulfill America’s energy needs. At the very least consumers should have access to new biofuels like E15. People want choices at the pump. They want cheaper gas that’s safe for their cars and won’t pollute the air.

Simply expanding the number of locations in Wisconsin that offer E15 as a choice for consumers will create hundreds of millions of dollars in rural economic growth and in just five years could take 15 million barrels of foreign oil off our roads by displacing 300 million gallons of gasoline in our state alone.

Tell your local retailer to put in an E15 pump and share this information with your friends!

Connect with the WBIA: FacebookTwitterLinkedIn

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Wisconsin Ethanol Poll – Hosted by the WBIA

Recently, the WCGA released a poll showing Wisconsin citizens favor the use of ethanol in fuel by a 2 to 1 margin. 60% of individuals support blending ethanol into gasoline versus only 32% who oppose.

“Less than one third (32%) of participants were unsupportive of ethanol blends in their fuel,” said Joshua Morby Executive Director of the Wisconsin Bio Industry Alliance.

“Clearly the public understands what Big Oil is doing their best to cover up and ignore: Ethanol is cleaner-burning, efficient, and homegrown right here in Wisconsin.”

The Wisconsin Bio Industry Alliance will offer a detailed analysis of the responses from WBIA and WCGA representatives. The webinar will be available as a live YouTube stream through Google Hangouts on Tuesday, August 12th at 2:00pm CST. Viewers can post comments and ask questions before, during, and after the webinar.

The event details can be found on WBIA’s Google+ page. To view the live webinar on August 12th, interested parties can find the live stream below.

 

The poll surveyed 500 likely voters in Wisconsin and was conducted by Public Opinion Strategies for the Wisconsin Corn Growers Association.

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General Wesley Clark: Ethanol is the right choice

Wesley Clark

“This is about a cheaper fuel, it’s about a fuel that’s cleaner in the environment and it’s about reducing the $300 billion dollars a year the US sends abroad to purchase oil from foreign countries.” – General Wesley Clark, US Army, Retired

Via Chicago Tonight

 

View the full video below:

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Auto Industry Relying on Incomplete Research in Fight Against E15

In the debate over raising the ethanol blend wall, the auto industry has come out against E15 (a blend of 15 percent ethanol and 85 percent gasoline), citing research that claims higher blends will damage car engines.  This study, however, is incomplete and cannot be regarded as fact.

The report, published by the Coordinating Research Council (CRC), was due to test 16 engines manufactured between 2001 and 2009, but has only conducted testing on half thus far.  In fact, testing has only been completed for four engines.

It is troublesome that the auto industry is drawing conclusions from a study that is nowhere near finished when other third party research, and even the EPA, has suggested that E15 is safe for recent engine models.

CEO of Growth Energy, Tom Buis, said, “The EPA has told us in writing that they intend to complete their testing on E15 before making a decision, and we are confident they will.”

Why hasn’t the auto industry done the same?

Buis added, “We are also confident that the testing will show what we already know: that E15 can run just fine in today’s modern engines, all while creating good paying jobs here in America.”

For more details about the situation, check out this story at BrighterEnergy.org.

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No Wars Have Ever Been Fought Over Ethanol

Growth Energy launched their $2.5 million television ad campaign today, promoting ethanol’s many benefits as an alternative to fossil fuels.  The spots will air on four cable networks over the next six months: Fox, MSNBC, CNN and HLN. They began airing today at 6 a.m on all four networks.  Each spot focuses on a different benefit of ethanol and promotes it as independent, clean, renewable, peaceful, sensible and economic.

Here is one example, called “America’s Peace Fuel”

To see all of the ads on Growth Energy’s Web site, click here.

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Didion Works to Increase Energy Efficiency

WBIA Member Didion Ethanol has begun work to increase the plant’s energy efficiency using $5.5 million from a recent DOE grant.  The project, which will cost a total of $11 million, will decrease energy use while allowing the plant to produce more ethanol.  We are proud to see one of our members taking such a big step towards energy efficiency and the improvement of the ethanol industry.  The project will also created an estimated 10 permanent positions, plus 75 temporary construction jobs.

Read more about the project in this article in Ethanol Producer Magazine.

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Report Shows Feasibility of Cellulosic Ethanol Operation

New North, Inc. today released Phase Two of a study on the feasibility of a cellulosic ethanol plant in Niagara.

On July 29, officials released Phase One of the study conducted by Resource Analytics, which found that sufficient biomass resources exist in the surrounding area to support a cellulosic ethanol plant.

Phase Two demonstrates substantial interest among individuals and companies to provide biomass resources – particularly wood resources – to such a facility, provided the plant could support diverse types of feedstocks.

“As second generation biofuels emerge as a fuel source, the New North is well positioned to take advantage with the resources and infrastructure necessary to create them,” said Jerry Murphy, Executive Director of the New North, Inc. “This study has demonstrated that a cellulosic ethanol facility at the former Niagara paper mill site has a great deal of promise for potential investors.”

In addition to wood resources – which provide the best option in the short-term – the study also notes the possibility of creating switchgrass supplier cooperatives in conjunction with the establishment of an ethanol plant over the coming years.

Phase II of the study is available for download at www.tinyurl.com/biomassstudy2. Phase one is also available at www.tinyurl.com/biomassstudy.

New North, Inc. is a regional collaboration effort focused on promoting regional cooperation and economic development in an 18-county region in Northeast Wisconsin. The 18 counties included in the New North are Outagamie, Winnebago, Calumet, Waupaca, Brown, Shawano, Oconto, Marinette, Door, Kewaunee, Sheboygan, Manitowoc, Fond du Lac, Green Lake, Marquette, Florence, Menominee, and Waushara. To find out more information about New North, Inc., please visit www.thenewnorth.com.

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Bio Industry Basics #8: Midwest States Support Ethanol and Biodiesel

The Midwest Legislative Conference of The Council of State Governments, a bipartisan association of state legislators from 11 Midwest states including Wisconsin, recently released a series of policy resolutions supporting ethanol and biodiesel. The resolutions called for:

  • Increased use of ethanol and biodiesel
  • Increased use of ethanol blender pumps
  • Sound scientific methods for calculating carbon emissions
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