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Ethanol Industry Thinking Strategically


Using ethanol personally, promoting the fuel to the public and supporting ethanol-friendly legislation have been bread-and-butter activities for corn farmers and their respective associations for more than two decades. Although this is not likely to change in the months and years ahead, challenges and pressures on the ethanol front make strategic thinking and demand-driving initiatives increasingly critical.

State and National Corn Grower staff just concluded two days of meetings to conduct an in-depth, state of the ethanol industry analysis in Bloomington, Illinois at the offices of Illinois Corn. The goal was to discuss and review the ethanol plan constructed by the group last November. As market conditions and the political environment change, the plan will continue to evolve.

During last week’s meeting, participants heard from various speakers and received updates on market conditions, legislative and regulatory issues and projects. Speakers included Marty Ruikka with ProExporter, who reviewed economic conditions and forecasts along with Scott Richman with Informa Economics who provided an update on ethanol-related analyses being conducted on behalf of NCGA and the U.S. Grains Council.

“We have to recognize that the current yield trend requires us (farmers and related industry) to always be engaged in capital maintenance and marketing mode. Organizations like NCGA, U.S. Grains Council and the U.S. Meat Export Federation have to be super aggressive to keep up with yield growth,” according to Ruikka of PRX. “Maintaining our markets and working constantly to assure incremental growth in corn use is therefore critical.”

The corn team reviewed ethanol production, demand and volume obligation scenarios under the Renewable Fuels Standard. Several key components of a successful strategy for corn were discussed, including:
• Growing ethanol consumption in the domestic market through expanded use of higher ethanol blends.
• Expanding relationships and communication with automakers as older vehicles in the nation’s auto fleet are replaced.
• Maintaining an up-to-date strategy that reflects the rapid change in the auto and fuel industry.
• Assuring a united approach with consistent messaging from corn farmers and other ethanol supporters.
• Growth of ethanol exports as nations work to meet their commitments to reducing Green House Gas emissions to address climate change.

Source: NCGA