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May 14, 2007 - Ethanol keeps growing

The ethanol story just “keeps on keeping on”. Before writing this column I spent an hour looking at an Indy racing car and talking to Indianapolis 500 driver Jeff Simmons about the car. Two questions... Why?...because this year every car in the race will be powered by 100% ethanol. Where?...it wasn’t in Indianapolis; the car and the driver were standing outside the Board of Trade building in downtown Chicago where they trade corn and ethanol futures.

It is one more example of constant change in our lives and in the agribusiness industry. Many corn growers who have spent three decades fighting for ethanol remember the battles over the years with the petroleum industry and Congress to make the home-grown fuel part of our energy program. The suggestion that ethanol was a safer and more efficient race car fuel was laughed off the track.

All of that has changed and that must please Michigan farmer and race car driver, Gordon Johncock, who was promoting ethanol for race cars more than a decade ago. Mark Thomas, who grew up on a farm in Ohio and is now the five-time IHRA Alcohol Funny Car Champion powered by ethanol is also a strong supporter. And now there is Jeff Simmons, who qualified 13th for the big race and has been driving an ethanol car for a few years. He told me he and his fellow drivers like ethanol because their cars run faster and more efficiently, and hear this...get 30% better mileage than with racing gasoline. He said that has allowed them to reduce the size of their fuel cell from 30 to 22 gallons.

But perhaps, the even bigger story for ethanol is contained in the May Crop Report Supply/Demand numbers issued earlier this month. USDA raised the corn for ethanol use this year from 3.2-billion bushels in April to 3.4-billion bushels in its May report. Another interesting number is corn moving into export at 1.975-billion bushels. Exports are still important to U.S. corn growers, but ethanol consumption outstrips exports by more than 1-billion bushels.

There are still those ethanol skeptics, however, and I encountered one recently when I spoke about agriculture’s role in energy production at a meeting attended by 350 urban folks. He wanted to debate me on the cost of producing ethanol, the unfair tax breaks, using food while
hungry people starve and all the other arguments we’ve heard over the years. I simply responded by quoting House Agriculture Committee Chairman Collin Peterson’s words, “I would much rather buy my energy by the bushel from the Heartland of America than by the barrel from the Middle East”. So, if you’re a corn farmer, enjoy this year’s Indy 500 and know that you helped fuel the cars.

My thoughts on Samuelson Sez.