USDA is good at its surveys—we all rely upon its weekly crop progress reports, its monthly supply and use reports and periodic producer surveys. All the traders work at anticipating what the reports will say, then comment on whether the USDA conclusions were anticipated or surprising.
It will be interesting for the renewable energy sector to see what the USDA learns from a new survey. Secretary of Agriculture Tom Vilsack said last week the USDA will survey the nation's 20,000 farms and ranches to learn what they're doing in renewable energy and biofuels.
The Argus-Leader, where I read about the survey, added an interesting comment: "The thought that ethanol had lost its can't-miss swagger in Washington isn't so," the article said. Now, were those the reporter's words or Vilsack's?
The reporter followed up with a comment from opponents of ethanol, specifically Craig Cox of the Environmental Working Group, who described the ethanol industry's "desperation" in looking to the government to maintain the tariff and tax credit and boost ethanol blends. Interestingly, the article said later Cox said biofuels can be an important component of future energy needs, but the promise of those fuels has yet to be met.
Promising to the ethanol industry, was the final Vilsack quote in the story, obviously talking about crop residue-based ethanol: "In addition to marketing crop residue, which is important to the bottom line of farmers and ranchers, it's a job creator, it's a job creator in rural America where there's a desperate need, and it avoids the risks we're currently seeing with drilling - as ethanol won't pollute the oceans," Vilsack said. "There's some societal benefits that accrue that justifies it as a fledgling industry that needs some help because of the national interest it serves."
Vilsack can see in his home-state just what the impact of ethanol has been on rural communities. Iowa is the nation's number one ethanol producing state with a capacity of 3.4 billion gallons annually, almost twice that of the state second in installed capacity— Nebraska at 1.8 billion gallons. It will be interesting to learn from USDA's survey, just how many farmers in those states benefit from that industry presence.