August 21, 2006
Plans Announced For New Biodiesel Refineries And State Support For Biofuel Plants
The Associated Press reports that an Iowa company plans to build a dozen biodiesel refineries in the United States by 2010, creating about 500 jobs. Renewable Energy Group Inc. says it has raised $100 million toward the plants, which will increase its biodiesel production to 640 million gallons annually. Five of the biodiesel plants will be in Iowa. The company will own some of the new plants as well as build and manage others for clients. Locations and a total cost for the plants have not been determined.
The refineries will use soybeans or animal fat to make the biodiesel. New plants will vary from 30 million gallons to 60 million gallons per year. A 30 million-gallon plant costs about $40 million, and a 60 million-gallon plant costs up to $65 million to build.
Meanwhile, Illinois is providing $25 million in grants and other aid to companies building five ethanol and biodiesel plants in the state, according to Gov. Rod Blagojevich (D). The plants will spur about $334 million in private investment, produce 225 million gallons of biofuels each year using corn and soybeans, and create almost 150 jobs, he said. Biodiesel blends of 11 percent or higher and 85 percent ethanol blends (E-85) are exempt from state sales tax.
The United States burned about 62 billion gallons of diesel fuel last year, but only about 75 million gallons of biodiesel was used. However, that is up significantly from 1999, when only 500,000 gallons of the soybean-based fuel was burned.
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Argentina Says EU Supports Its Legal Battle Over Use Of Monsanto Seeds
The Bureau of National Affairs reports that Argentina said the European Union sided with it on its legal dispute with Monsanto, which has been blocking Argentine shipments of GM soybeans and soy by-products to Europe in a bid to collect unpaid royalties. “In an official statement, the EU’s Directorate General for Internal Market and (Financial) Services confirmed the Argentine government’s interpretation that soymeal derived from genetically modified seed imported by the European Union does not infringe Monsanto’s patents,” Argentina’s Economy Ministry said in a statement.
Monsanto has managed to have courts seize Argentine soybeans and soy by-products in Spain, Britain, Denmark and the Netherlands as part of its legal battle. Monsanto’s Roundup Ready seed has patent protection in Europe but not in Argentina. While the company says it did try to obtain but was denied copyright protection, the government says the firm failed to comply with all legal requirements on deadline. And, a widespread black market in Argentina means that an estimated 80 percent of the GM soybean seed comes from replanted seed, and not from original seed purchased from Monsanto, according to the company.
Argentina Expects 40.5 Million Tonne Crop
Argentina produced a record 40.5 million tonnes of soybeans in 2005-06, up 5.7% from the 38.3 million tonnes produced a year earlier, the Agriculture Secretariat reported. Area planted increased to 15.3 million hectares, up 6.5% from the 14.4 million hectares planted in 2004-05, the Secretariat said. Area is seen up partly because dry weather prevented many farmers from sowing corn or wheat and those fields were planted with soybeans. Farmers also planted more soy because of its higher price compared with other crops. USDA has forecast Argentina’s 2005-06 soybean output at 41.3 million tonnes.
July NOPA Crush Exceeds Expectations
The National Oilseed Processors Association (NOPA) last week said its members crushed 3.88 million tonnes of soybeans during July. The figure was above the average trade estimate of 3.73 million tonnes and well above the 3.57 million tonnes NOPA reported for the month of June. The cumulative crush for the year is reported at 38.1 million tonnes compared to 37.6 million tonnes reported through July 2005. Soyoil stocks increased to 1.22 million tonnes, up from 1.15 million tonnes in June. The average of trade estimates projected stocks at 1.18 million tonnes.
Senate Ag Panel Hears Calls To Retain Current Government Supports
Many of the witnesses at a Senate Agriculture Committee field hearing last week emphasized that maintaining current government support programs at the same levels is one of their highest priorities when the 2002 farm bill is rewritten. Lower down the priority list were the energy, trade and conservation titles.
During the hearing in Grand Island, Neb., representatives of the state’s agricultural industry responded to a request by committee Chairman Saxby Chambliss (R-Ga.) to list their priorities for the next farm bill. After hearing from the witnesses, Chambliss told those in attendance that budget constraints, the U.S. budget deficit and the issue of future trade agreements mean there will not be a lot of new money for the next farm bill.
Committee member Ben Nelson (D-Neb.) said the current suspension of the Doha Round of WTO trade talks presents an opportunity to change farm policy. “Without the outside pressures of Doha and the WTO, we can better improve our farm policy, on our own terms, with a focus on securing American agriculture for the future,” said Nelson. He added that he would consider extending the current farm bill only as a “fail-safe option.”
Nelson said the next farm bill should focus on such topics as food security, alternative energy and rural development, and that it should offer a new direction because current farm policy is not effective. “We must also take into consideration the increasing federal budgetary concerns and the growing public discontent with our current farm support programs,” Nelson said. That view was reinforced by Chuck Hagel (R-Neb.) who warned farmers that the Senate would not look kindly on a farm bill with a high price tag because of the nation’s deficit.
Soy Complex Mixed As Soyoil Reflects Lower Energy Prices
The soy complex closed mixed on August 17 with soybean meal posting gains as soyoil was pushed lower by declining energy prices. While 2005-06 soybean usage continues to surpass expectations during the last half of the marketing year, favorable crop prospects are weighing on the market, mainly driven by recent moderate temperatures and adequate rain in the Corn Belt. September bean futures closed down $0.28 finishing at $202.64; November was $0.18 lower, closing at $207.42; and January lost $0.09 ending at $212.10. September meal was up $1.43, closing at $1176.92; October was $1.65 higher, finishing at $178.13; and December was up $1.10 to finish at $180.45. September oil closed $6.39 lower to finish at $548.06; October was down $5.95, closing at $553.13; and December decreased $6.39, ending at $560.85.
