Diluting the message

August 23, 2010

BY Susanne Retka Schill

I had a chance to drop in at the Canadian Renewable Fuels Association office in Ottawa this past week. I asked CRFA President Gordon Quaiattini the story behind the fantastic approval ratings biofuels have gotten from the Canadian public—numbers in the 70 percent bracket on several questions asking about support for the Canadian-wide ethanol and biodiesel mandates taking effect this fall and for biofuels in general.

"Politicians would die for numbers like these," he admitted. Canadians are closer to their agricultural roots, he speculated. With a relatively small population spread out across a huge country, Canadian urban areas are not as disconnected from the surrounding agricultural scene as are the densely populated urban sprawls to the south, on both sides of the continent. The CRFA has helped that along with a series of reports that show the economic development benefits to rural areas from ethanol and biodiesel production.

In the U.S., that sort of news has perhaps been diluted since many of those studies are done on a state level. It gets covered well in that state and in the industry, but nowhere else. Reports from Minnesota and Indiana on the economic impact of ethanol are two we reported on in recent weeks. The USDA and DOE do reports as well, but often those have so much detail that only the most interesting or significant findings are reported, and much gets buried. Then there's the tendency for the media to focus on the negative. No controversy and the report gets three paragraphs coverage, if anything at all. The urban media's tendency to ignore the agricultural heartland presents a huge challenge for the ethanol industry to project the positive impact that ethanol has had in rural America.

One of those we can see right now. The USDA crop estimates show another bumper corn crop with record yields is maturing. The soybean crop is projected to set records as well. A couple of decades ago, that sort of news would have driven the commodity markets into the basement, regardless of the status of wheat crop on the other side of the world. After all, the U.S. wheat carryover is huge. But the corn carryover is not, in spite of last year's big crop and the anticipated big crop out in the field. Thanks to ethanol introducing significant new demand in the corn market, we no longer have huge corn surpluses year after year. I shudder to think what the political machinations would be, given today's political climate, if farmers were suffering from low commodity prices as they did in the late 70s. I'm reading a book now recounting those days and the early days of the ethanol industry. More on that later.


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