COMMENTARY
Put a soybean in your tank
It may not have quite the ring of the
Put a Tiger in Your Tank advertising
campaign from the 1960s, but for those
of us paying well above $2 a gallon for
gasoline this summer, the idea of
putting corn kernels or soybeans in our
fuel tanks may have some new-found
appeal. As of this writing in early July,
gas prices have subsided a bit, but with
domestic and worldwide petroleum
reserves ever dwindling, it seems we are
climbing an increasingly steep petrolprice
stairway-- one with no end.
While farmers are hit even harder
than most Americans by higher fuel
bills, at least some of them are smiling:
those corn/soybean farmers who have
built ethanol and soydiesel processing
plants. They are currently earning
good returns by transforming their
crops into a value-added product that is
simultaneously beginning to help ease
our nation’s dependence on foreign oil.
We’ve devoted a large portion of
this issue to relating the experiences of
several of these new processing co-ops.
Articles have also been contributed by
some farm supply co-ops which are
promoting the sale of ethanol or soydiesel.
Farmer and utility cooperatives
are also delving into production and
use of other renewable fuels and energy
sources, such as methane recovery,
thermal depolymerization, wind and
solar power and other technologies.
In addition to farmers earning
money from biofuels, the increased
demand they create for corn and soybeans
has helped to raise grain prices
for all farmers in their operating
regions. Better still, some towns, such
as Benson, Minn., credit an overall
revival in their economies to the opening
of ethanol processing plants in their
vicinity. The co-op
there, Chippewa
Valley Ethanol,
has also been a
leader in promoting
a
marketing
venture that is
selling ethanol
for a number of
co-ops. Some
observers say such
marketing ventures
are needed for producers
to truly reap the benefits
of a biofuel economy.
Just because things are
going well now doesn’t mean
they will continue to. For a
cautionary tale, read the
account in this issue of what
happened to ethanol pioneer
Minnesota Corn Processors.
It’s a story others won’t want to
repeat. MCP was once the
nation’s leading producer of
ethanol. Many factors contributed
to its demise and the
eventual decision to sell its
operations. Author Anthony
Crooks says a major reason
was a desire/need by older
members to sell out to ADM
because they couldn’t find
other producers to buy their
co-op/LLC stock. That’s a
problem many co-ops are
wrestling with in one way or
another.
Some Minnesota legislators--
who were strongly
supportive of the coop
and the $33 million
in state subsidies it
had received while
farmer owned--
feel the taxpayers
were cheated
when the operation
was sold.
One legislator
has even
demanded that
ADM return those
taxpayer dollars.
As well as the
industry is doing at present,
it obviously is still
heavily dependent on such
incentives, both to help build
plants and to boost prices for
ethanol and biodiesel. If producerowned
co-ops and LLCs wind up
being absorbed by industry giants,
it could spell real trouble for the
continuation of such incentives.
A board member of one ethanol
co-op told us that farmers are very
cognizant what happened to MCP
and they don’t believe they will get
caught in the same trap. If so, and
if the technology and economics of
biofuel production continue on
anything like their current trajectory,
the Corn Belt may someday
also become the nation’s Fuel Belt
--or at least its reserve tank.
Keeping the industry largely
farmer owned, with the majority
of the benefits distributed in
rural areas that produce and
process the grain, may be the
best self-help rural development
program to come down the pike
in many years.
Dan Campbell, Editor
