View From the Hill

February 9, 2007

BY Bob Dinneen

With the rapid growth and expansion of the U.S. ethanol industry, each day brings new opportunities and new horizons. Friends, I am here to tell you those horizons are bright and much closer than many of us would have guessed even two years ago.

The unprecedented growth of our domestic ethanol industry today is ushering in the kind of economic, environmental and energy security benefits that ethanol's early pioneers envisioned. These bright new horizons are also affecting change for American agriculture that is exciting and ultimately beneficial to our nation. However, there are those, particularly in the livestock and poultry industries, who are apprehensive of this change. While their concerns are not to be dismissed, they are often overstated.

Markets work, and the market has sent a strong signal to American farmers to produce more corn. This will come from increased corn acreage, as well as increased yields through improvements in seed hybrid technology and farming efficiency. USDA Chief Economist Keith Collins noted during Senate Ag Committee testimony that the USDA anticipates a significant increase in corn acres this year.

At the same time, yields are increasing. Each five-bushel increase in corn yield is the equivalent of another 2.5 million acres of corn. With the advancements being made in hybrid seed-corn technology, farmers will consistently achieve those gains.

Ensuring the availability and consistency of high-quality distillers grains is also a priority of our industry. Distillers grains provides the livestock and poultry markets with an important source of protein and other nutrients. Within the Renewable Fuels Association, many of our members are actively addressing quality and nutrition issues concerning distillers grains through our Coproducts Committee.

New horizons aren't the domain of the ethanol industry alone. The growth of the industry is providing the livestock and poultry industries opportunities, as well. Cattle manure is becoming a hot commodity for some western ethanol facilities as a source of power for the biorefinery. Both E3 BioFuels in Mead, Neb., and Panda Ethanol in Hereford, Texas, will be using hundreds of millions of pounds of cattle manure in methane digesters to power their facilities. Similar opportunities are being explored using chicken and turkey waste. The potential for these kinds of synergistic relationships between industries is just another exciting development stemming from the expansion of ethanol production across the country.

Our industry is proud of the economic opportunities it has provided to rural America, not least of which is strengthening grain markets for American farmers. Without question, the rise of the ethanol industry will require adjustments in all sectors of American agriculture. I firmly believe by working constructively together and keeping the heated rhetoric to a minimum, all aspects of American agriculture, including the livestock and poultry industries, can realize similar new horizons.

Bob Dinneen
President and CEO
Renewable Fuels Association

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