What is the Ethanol Plan E Challenge? The Challenge is to video record yourself tanking up at a blender pump challenging five others to use as high an E-blended fuel as their vehicle can consume and forward the video to those challenged and us.
Please send your video to firstname.lastname@example.org.
A North Dakota subscriber said he saw a “$1” up there, while there was a “$2” here as the first number of the local cash price of corn this past week.
The corn market needs more demand in order to pay farmers what it costs to produce corn.
Every .2 percent increase in U.S. ethanol consumption creates demand for 100 million bushel of corn.
I happened to go through Albert City last weekend where Valero operates an ethanol plant. Valero owns and operates 11 ethanol plants and more than 6,800 branded retail fuel stations in the U.S.
Only 1 percent, which would be 68 Valero stations, offer ethanol blended fuel above E-10. I could not identify any retail fuel outlet with a blender pump in Albert City.
Valero also has an ethanol plant in Hartley, and the CENEX and Sinclair stations in Hartley both offer E-85. There is an inconsistency as to where you will find blender’s pumps.
Valero is on both sides of the ethanol blend wall with 15 petroleum refineries and 11 ethanol plants. It produces ethanol, but defends the blend wall by limiting its retail products to E-10.
Ag Partners and CENEX both have retail fuel outlets in Albert City and neither have blender’s pumps there. So while they make 110 million gallons of ethanol in Albert City annually you cannot buy E-85 there. That is a mixed up match of production and sales.
Ag Partners is not really in the retail fuel business so it gets off the hook. Albert City is its only card-trol fuel center. You would think that if they only have one, they would do it right with a blender pump.
AgPartners has a tank wagon service, but it only delivers E-10. It can deliver biodiesel, but its energy manager says that farmers rarely order it.
This is where I can get off on my farmer brethren.
We have told you the story about the Zenith TV plant worker who lost his job when Zenith closed. He was asked how many TVs that he owned and he said five. Asked how many were Zenith and he answered just one.
The moral of this story relative to farmers is that if you don’t use your product, have E-85 and biodiesel delivered to your farm – why in the world do you deserve a government subsidy?
That Zenith worker didn’t buy what he made and some farmers don’t either. He lost his job and corn farmers are getting $2 something for your cash corn (worse in N.D.).
By adding 1 percent to U.S. ethanol consumption, moving the needle from E-10 to E-11, creates demand for 500 million bushel more corn. If the carryover is 2.2 billion bushels that would lower the corn carryover 22 percent and materially impact the price of corn enough to potentially eliminate farm subsidies.
It takes the entire ag sector, Midwest state governments, and supporting public working together to make that happen. Choose ARC or PLC, but also choose E-85 or if you don’t have a flex fuel vehicle use E-30.
Some farmers have E-10 and E-85 delivered to the farm and blend E-30 for their non-flex fuel vehicles themselves.
Currently just 6 percent of the 1,400 retail fuel outlets in the CENEX system offer E-85 and blender pumps. Many of the CENEX retail stations are owned and operated by local cooperative systems.
While there is some top down direction there is bottom up decision making as well.
Every day I come down U.S. Highway 71 past four blender pumps; in Arnold’s Park, Milford, and two in Spencer on my way to Royal.
There are morethan 200 blender’s pumps in Iowa. I drive past Fostoria on my route. owned by the MaxYield Cooperative. It have a CENEX station there on a four-lane highway with no blender pump.
MaxYield reportedly has 17 CENEX retail stations and only one, in Emmetsburg, offers E-85.
According to MaxYield Energy Central, its tank wagon service doesn’t have E-85, but it can deliver biodiesel. The ratio of 17 MaxYield stations and only one with a blender pump lines up perfectly with the ratio of the total CENEX system.
You have to drive by 17 CENEX stations to find one with a blender pump.
The decisions being made by CENEX, MaxYield, or collectively by both are not up to the level of commitment to biofuel use that they should be. 6 percent of stations with blender pumps is not enough. Both CENEX and MaxYield are currently more a part of the blend wall than the solution to it.
There is an inconsistency about how much farmer-owned cooperatives back biofuel which starts at the grassroots.
The point of the Ethanol Plan E Challenge was to reveal the inconsistencies as well as highlight the importance of the entire ag sector to get on the same page, improve consumer access and consumption to biofuels to grow demand for corn.
This is a wake-up call to farmers that don’t use ethanol or biodiesel. You are no better than the Zenith TV worker who didn’t buy his own product and yet lamented the loss of his job.
The idea that farmers would not use ethanol, but complain about the price of corn while taking government subsidies is not consistent with rational common sense that they would not tolerate in others getting checks from the government.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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