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DAVID KRUSE

By Staff | Oct 10, 2014

My Ethanol Plan E Challenge has generated interest. I challenged everyone to tank up at a blenders pump, take a video of themselves filling their vehicle with E-15-E-30-E-85 and send it to five others challenging them to do the same – and then send the video to Jessica@commstock.com for posting.

I challenged Iowa U.S. Senate candidates Bruce Braley and Joni Ernst to take the Ethanol Plan E challenge. Videos that have been posted can be accessed through our website at Commstock.com on the home page where you find the link to our Plan E Channel.

Braley accepted the challenge. His video has been posted challenging the rest of the Iowa delegation – Reps. Tom Latham, David Loebsack and Steve King, and Senators Chuck Grassley and Tom Harkin to take the challenge and pass it on.

While the Ethanol Plan E Challenge is an economic rather than a political issue, we need all of our elected officials in both political parties to understand the financial pressures that are building against the farm economy, while searching for efforts and solutions that can be taken to keep the Midwest economy healthy and less dependent on government.

Braley is a strong ethanol supporter and understands the need to break through the E-10 blend wall. Just a 2 percent increase in U.S. ethanol consumption increases corn consumption 100 million bushels.

We have record crops, burdensome carryover and below-cost of production corn prices. In order for the ethanol industry to respond to the market we have to get through Big Oil’s E-10 blend wall.

Before farmers can choose either the Agriculture Risk Coverage or Price Loss Coverage subsidy payments in the new farm bill they should be required to choose E-15-E-30 or E-85.

We could consume enough ethanol in this country to increase demand for corn enough to eliminate farm subsidies.

A 1 percent increase in U.S. ethanol consumption above the current E-10 blend wall to E-11 would create demand for 500 million bushels of corn.

The ag sector, state governments, fuel consumers, farm cooperatives, farmers and even ideologues who oppose farm subsidies need to step up their ethanol consumption beyond the E-10 blend wall to collectively move the needle of ethanol consumption higher in the U.S.

A farmer who doesn’t use ethanol, but accepts a government subsidy check is not doing all he can to help himself before accepting government aid. Farmers typically say they are opposed to such things … but do they act that way in practice? That too is a challenge.

It is a matter of will, both in expanding the infrastructure increasing consumer access to higher ethanol blended fuel and consumer education to use it.

Brazil’s ethanol standard fuel is E-27.5, not because either oil or ethanol industries said so, but because the mid-range ethanol blended fuel is the right fuel for optimum performance.

E-30 would be enough blending in this country to fulfill the entire 36 billion gallon by 2022 Renewable Fuels Standard as written into law.

Iowa Governor Terry Branstad said the Environmental Protection Agency administrator, Gina McCarthy, misled him when promising support for renewable fuels and instead will cost the Midwest economy billions of dollars.

He is right. McCarthy and the EPA are completely tone deaf over rural America and Braley inherits some of that deficit with rural voters partly because of this baggage regardless of his stand personally.”

Braley took the challenge. I challenged Joni Ernst, too. Where is she? She claims to support ethanol and oppose subsidies so the challenge should be ideologically perfect for her.

After all, as a Lieutenant Colonel in the Iowa Army National Guard, she should promote higher ethanol blends as half the guard’s non-tactical vehicles have been modified to use E-85.

Camp Dodge shop foreman Jim Russell said, “Initially, some drivers were hesitant about the switch to E-85, so Russell took time to give tours under the hood and show side-by-side fuel samples of E-85 and gasoline. The drivers were quickly won over once they understood E-85 and experienced its performance. The performance of the patrol cars is awesome.

“We took our military police off E85 during the coldest winter weather, and they were beating down our door to get back to it,” Russell said. “The flexible fuel vehicles are saving $200,000 annually in fuel costs.”

A video of Joni Ernst in uniform filling up the Humvee challenging five others to do the same would be phenomenal.

At the moment that I wrote this our local cash corn and soybean prices for October were $2.80 and $8.55 per bushel, respectively. That is going to be a problem.

We need corn prices above the cost of production, we need to eliminate farm subsidies by improving corn prices above subsidy trigger levels.

We need to use domestic biofuel instead of foreign oil. We need clean air and we need a strong Midwest economy.

All of that is baked into the Ethanol Plan E Challenge.

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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