Rural Ramblings

Winter 2009 Update from the SDSA

Posted with permission from the South Dakota Soybean Association (SDSA)

Column by SDSA president Kevin Scott, Valley Springs

Winter 2009

This past year has been a difficult one for the Bio-Fuels industry.  Extremely high soy-oil prices that followed the crude oil market, made producing soy-diesel a money losing venture for most companies.  Even $5 fuel prices could not overcome the high cost of inputs and the abundant capacity in the industry.  The current US. capacity for bio-diesel production is somewhere near 2 billion gallons. Those plants are now operating at less than 25% of capacity and much of that production is being exported to Europe to take advantage of their incentives.  The American Soybean Association, National Bio-Diesel Board, South Dakota Soybean Association and others were in Washington DC many times over the last couple years to promote soy based bio-fuels and were able to secure a 500 million gallon carve out for bio-diesel in the current RFS.(reformulated fuel standard)  That amount is to double by the year 2012.  We are watching with great interest, how the government goes about enforcing that standard and if the demand caused by that enforcement will bring the industry back to profitability.

Most of us, as producers, are involved in the ethanol industry and know that the volatility in our markets has also been hard on profits in this area. When the first plants were being built by farmers, the hope was that the result would be a slight improvement in the price received for corn in our local area. We know now that the actual outcome has been much better than we had first imagined. I believe we as farmers have invested wisely in our future success because of the price support that the bio-fuel industry provides to our crops. We continue to produce record amounts of grain year after year with the help of better seed, equipment, inputs and methods. I feel we are a long way from top of our production capabilities and that we will continue to feed and fuel the world for many years to come.

We can not change the normal cycles that occur in agriculture or the weather or the economy.  Nothing is going to work right all of the time.  Most farmers who have been around a while know that persistence pays off. Bio-fuels production is cycling through one of those tough times that we all knew would come.  There are people who do not understand the industry and the positive effects that it has for our State and Country.  They voice their opinions without knowing the facts.  SDSA, along with the South Dakota Soybean Research and Promotion Council, will use your membership and check off funds to promote our industry and educate the public to the merits of bio-fuels in SO. and the rest of the country. We will not be shy in defending our industry to the public or policy makers. Profits will return in time and the industry will continue to grow and producers will benefit.

Welcome to 2009 from the SDCGA!

Posted with permission from South Dakota Corn

Welcome to 2009! Before we begin planning for a new year, let’s pause to reflect on how SDCGA benefitted producers in 2008:

• One of corn’s largest customers in South Dakota, the livestock industry, continued to expand.  For example, the dairy industry has increased by 10,000 cows statewide since 1999.
• South Dakota gas stations are adding blender pumps at a rapid pace. Through the efforts of SDCUC and EPIC, there are now 34 operational blender pumps in the state, the second highest in the nation.
• We exceeded 1 billion gallons of ethanol production in South Dakota for the first time.
• SDCGA’s Kernels of Truth education program helped expose the misinformation and exaggerations distributed by the grocery manufacturers in the “food vs. fuel” debate.
• Many SD producers took advantage of educational and networking opportunities, including the annual meeting, Growing Forward Seminars, and Commodity Classic.
• NCGA and SDCGA advised our elected officials and USDA on many issues in the new Farm Bill and will continue this close working relationship during the implementation process.

Opportunities like those listed above would not happen without the hard work of the corn office staff, the SDCGA and SDCUC board of directors and members like you that made calls to your state and national congressional staff on issues important to agriculture.

Upcoming challenges that SDCGA is working on include legislative issues at both the state and national level such as taxation, Sodsaver and higher ethanol blends. 

I hope you took advantage of the educational opportunities sponsored by SDCGA/SDCUC the past few months. Information was provided on the new farm bill, crop insurance, weather, economic forecasts, biotechnology, marketing and estate planning. With the uncertain economic conditions, 2009 will offer many challenges. The volatility in input prices and grain markets will likely continue. We need to be ready to take advantage of the opportunities that will appear.

Here’s to a safe and productive growing season!