February 9, 2012

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Economist warns ag economy’s “bubble” may come down soon

January 14, 2012 By

A Midwestern economist says it’s likely the state’s ag economy soon will be hit by the recession in Europe and slower growth in farmland values. Creighton University economist Ernie Goss says the hit won’t be anything like the Farm Crisis of the 1980s, however.

“When I was a kid, we talked about dirt poor. Dirt’s not poor anymore. In fact farmland is the new gold,” Goss says. “These growth rates are unsustainable. There is air in the bubble, the question is when air comes out. I expect some of it to come out in 2012, but not much.”

According to Goss, the problem during the Farm Crisis was people had been buying farmland on credit — and interest rates were sky-high back then.

“Agland purchases now are a lot to do with cash. This is not over-leveraged farmers who are borrowing from the bank to buy the land which is based on a significant growth rate. That’s not what we’re seeing,” Goss says. “That said, I still expect some of the air to come out of the bubble because of potentially higher interest rates and lower agricultural commodity prices.”

Goss also expects overseas demand for ag commodities from European customers to decline due to the recession, causing a “slight” hit on prices for corn and soybeans. Goss made his comments on the “Iowa Press” program which will air Sunday at noon on Iowa Public Television.

Filed Under: Agriculture, News Tagged With: , ,

Renewable Fuels Association releases voter guide

December 30, 2011 By

With days to go before the Iowa Caucuses, the Iowa Renewable Fuels Association (IRFA) has released a voter guide on issues related to ethanol. Association executive director, Monte Shaw, says the most important question is where the candidates stand on the renewable fuels standard (RFS).

“Especially with the ethanol blender’s tax credit going away at the end of 2011, the Renewable Fuels Standard is really the only policy we are going to have in place to help fight the most favored treatment that petroleum gets. Most people forget that the petroleum industry will still be getting tax credits, even though we don’t,” Shaw says.

And Shaw says that’s why it’s important to have a President who supports the RFS. He says a president could veto bills if Congress tries to get rid of the RFS or hurt it. “But there’s also waiver requests, so if we have a person who doesn’t like renewable fuels in the White House, they could order their EPA to just waive the RFS, even though their might not be a truly legitimate reason to do so.”

Shaw says three of the six Republican candidates –Newt Gingrich, Mitt Romney and Rick Santorum– have expressed their support for the RFS. Michele Bachmann, Ron Paul and Rick Perry have not.

“To us that’s the clear dividing line between people who understand that we need to help renewable fuels compete against all of the benefits that the government is giving petroleum, otherwise you’re just going to have that oil monopoly continue,” Shaw says. An electronic version of the voter guide can be viewed at: iowansfueledwithpride.com.

Filed Under: Agriculture, News, Politics & Government Tagged With: ,

Grassley pushes for extension of renewable energy tax incentives

December 6, 2011 By

As some members of Congress work to find fixes for the federal budget deficit before December ends, Iowa Senator Chuck Grassley is calling for extending tax breaks on alternative or renewable energy. Grassley says tax incentives for industries like wind energy and cellulosic biofuels will expire at the end of 2012.

He says those industries bring good-paying jobs and are a big part of economic development in rural America. “In an economy where uncertainty reigns, we should be doing everything we can to give people certainty if we’re going to save jobs and grow jobs,” Grassley says.

“Extending the renewable tax incentives will do that.” Grassley, a Republican, says we saw first-hand in 2010 how the expiration of tax incentives practically destroyed a product line and created widespread turmoil and firings.

“When the biodiesel incentives expired, 10,000 jobs were lost as nearly the entire industry shut down,” Grassley says. “In addition, if a few critical incentives aren’t extended at the end of 2012, industries will see loss of jobs as the industry slows down.” If the wind energy tax incentives are allowed to expire, Grassley says he fears for the loss of 4,000 jobs in Iowa tied to manufacturing components for the wind industry.

Critics say the federal government should be trying to find places to cut spending right now, not offering tax breaks to industry.

“I accept people like that, it’s a legitimate argument,” Grassley says. “I can only ask in return, do you think we ought to have any alternative energy what-so-ever and do you think we ought to be relying upon just imported oil?”

He also asks, if the EPA won’t allow power plants to burn coal, what alternatives will be able to take its place? Grassley says if the ethanol industry hadn’t had government backing 30 years ago, it never would have developed.

Filed Under: Environment & Conservation, News, Politics & Government Tagged With: , ,

Company expands ethanol plant ownership outside Iowa

November 30, 2011 By

A Kansas-based company that owns four Iowa ethanol plants is buying a biodiesel plant in southeast Nebraska. Flint Hills Resources is purchasing the plant in Beatrice for $5-million. It cost $52-million to build the plant in 2007 but Beatrice Biodiesel filed for bankruptcy in 2008 and the plant never opened. Beatrice city attorney Tobias Tempelmeyer says he’s encouraged by the sale.

“The bankruptcy court will now have to approve the purchase by Flint Hills Resources,” Tempelmeyer says. “I think they have pre-approval from the bankruptcy trustee and bankruptcy judge already for the sale so I don’t expect it to take long for a final blessing from the court.”

The initial plan was to use soybean oil to create diesel fuel and a byproduct, glycerine. Reports say the new company will make use of another product to make biodiesel. Tempelmeyer says, “We’re happy to see the plant get sold and finally be put into some hands we hope will make it productive, open it up and begin operation.”

Flint Hills, based in Wichita, Kansas, also runs four Iowa ethanol plants in: Menlo, Shell Rock, Fairbank and Iowa Falls.

By Doug Kennedy, KWBE, Beatrice

Filed Under: Business, News Tagged With:

Branstad touts wind energy tax credit; Perry wants all energy subsidies to end

November 16, 2011 By

Governor Terry Branstad warns Iowa’s wind energy industry will be “severely damaged” if the federal tax credit for wind energy is allowed to expire at the end of 2012 — while a fellow Republican governor who’s seeking the presidency proposes an end to all tax breaks for energy-related companies.

GOP presidential hopeful Rick Perry has called for an end to all federal energy subsidies, including tax breaks for wind energy.

“For states to compete like that, I don’t have a problem in the world. I think that’s how our founding fathers saw the states, as laboratories of innovation. Let states, you know, compete however they think it’s best whether it’s with tax policy or regulatory structure or a legal system or whether it’s putting incentives in place for certain types of energy,” Perry said during an interview with Radio Iowa. “But the federal government should not be in the business of picking winners and losers, period.”

Texas is the number one state for wind energy production. Iowa is number two. Branstad said in a letter to leaders of the U.S. House and Senate that wind-related manufacturing is starting to slow in Iowa because there’s uncertainty about the federal tax break for the industry. Branstad’s calling on congress to act now to extend the wind energy tax break. Perry, meanwhile, said he has no “hard” deadline in mind for the repeal of energy subsidies. 

“I would remove all of those tax cuts and subsidies from the energy industry and let the marketplace choose those winners,” Perry said.

Tax breaks for ethanol and solar power are set to expire soon; ending many of the tax breaks for oil and gas would require congressional action. Oil and gas subsidies should be “phased out” according to Perry, but he’s not offering a timeline. Perry said he has no “hard date” in mind for the end of the ethanol subsidy either, but it should be “phased out over a reasonable period of time.”

“I feel very comfortable that Iowa farmers are going to be able to compete with anybody in the world,” Perry told Radio Iowa this week.

The Iowa Renewable Fuels Association has criticized Perry’s call for ending the federal requirement that a certain amount of ethanol be produced each year. The group charges that Perry’s energy plan is focused exclusively on oil and gas and would put “America’s domestic, renewable fuels at a severe disadvantage.”

Filed Under: News, Politics & Government Tagged With: , ,

Rail cars loaded with ethanol derail in Dubuque

September 7, 2011 By

Part of a Canadian National Railway train left the tracks in Dubuque this morning near the Mississippi River. Dubuque city spokesperson, Randy Gehl, says no one was injured in the accident.

He says there were nine cars involved and several of the cars that carried ethanol turned on their side. Gehl says they were lucky that the cars stayed intact after derailing. “There was no ethanol that leaked out, obviously that was a concern, it is a combustible liquid obviously,” Gehl says, “also with this location, these rail tracks are down near our riverfront very close to the ice harbor, so any time an accident like this occurs along the river, contamination is a concern as well.”

Gehl says work is already underway to clean up the derailment. He says crews arrived around 8:30 this morning to put the cars back on the track and he believes they will not have to be emptied before they can be put back up on the track. Gehl says the derailment did create some traffic backups this morning.

Gehl says highways 151, 61 and 52 are all in the area and the northbound lane has been closed and is expected to be closed most of the day in what he says is a very busy area of the downtown. Gehl is not sure what caused the derailment.

Filed Under: Fires/Accidents/Disasters Tagged With:

E-85 sales set record in second quarter

August 31, 2011 By

The Iowa Renewable Fuels Association says Iowans used more gas blended with 85% corn-based ethanol in the second quarter of this year than ever before. Association executive director, Monte Shaw, says the sales from April to June were encouraging.

Shaw says Iowans pumped nearly 3.7-million gallons of E-85 into their gas tanks, which was an all-time high for the state. Shaw says the price of the highest blend of ethanol available is the reason for the increase.

Shaw says there were large spreads between the price of E-85 and gas with less or no ethanol and people saw a way to save some money. He says the price spread between the fuels has narrowed, but he says it is still a good bargain, it helps Iowan farmers and cuts our dependence on foreign oil.

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Filed Under: Agriculture, Business Tagged With: ,
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