Ethanol

Prelude to a spin-off? by Jim Lane The Archer Daniels Midland Company (ADM) is breaking news of breaking off their ethanol unit…and a tumbling 40% decline in profit. In Chicago, Archer Daniels Midland Company reported their financial results for the quarter ended March 31, 2019, but most interesting to us, they are looking at separating their ethanol business with the option of spinning it off completely. They are also taking other actions to restructure and deal with challenges they say include weather issues and trade pressures. ADM announced a “series of measures to continue to underpin long-term-value creation” which included: “First, to meet growing customer...

Trump in a pickle: support his beleaguered EPA Administrator over oil refinery bailouts, or rally his Midwestern farm-state base? In Washington, Senator Chuck Grassley of Iowa tweeted: “I’ve supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & he should step down & let someone else do the job of implementing Trump agenda if he refuses.” Grassley explicitly called on Pruitt to back a key campaign pledge from 2016 that helped unlock farm state support and propel Trump into the White House. 1/19/16 Trump at IA Renewable fuels summit: EPA...

by Jim LaneGood news arrives from Minnesota that Syngenta has partnered with Green Plains (GPRE) to expand its use of Enogen corn enzyme technology across GPRE’s 1.5 billion gallon production platform. The Enogen backstory Enogen corn enzyme technology is an in-seed innovation available exclusively from Syngenta and features the first biotech corn output trait designed specifically to enhance ethanol production. Using modern biotechnology to deliver best-in-class alpha amylase enzyme directly in the grain, Enogen corn eliminates the need to add liquid alpha amylase and creates a win-win-win scenario by adding value for ethanol plants, corn growers and rural communities. We reported in January that Syngenta had reached...

Ethanol and isobutanol producer Gevo, Inc. (GEVO:  Nasdaq) is installing equipment in its Luverne, Minnesota plant to improve efficiency in corn processing.  The company is leasing a proprietary corn fractionation or slicing process developed Shockwave, LLC based in DesMoines, Iowa.  The new equipment is intended to increase by-product output, including feed protein products and food-grade corn oil.  With sales of more valuable by-products Gevo expects to improve overall profit margins.  Shareholders can expect to see results after the first quarter 2019, when the equipment installation is expected to be complete. Shockwave keeps a low profile with no corporate website and no one to answer phone calls.  However,...

Yay or Nay for EPA? RFS Volumes out for 2020, Biodiesel for 2021 – What’s the reaction from industry? by Jim Lane What’s the reaction from industry? Coal for Christmas? Should Santa bring coal for EPA’s stocking this year? Do the biofuels and agriculture industries think the EPA just put coal in their stocking? Is it thumbs up or thumbs down from biofuel industry advocates on last week’s U.S. Environmental Protection Agency renewable fuel volumes? What about the exempted volumes? The Ruling – Rotten or Respectable? First, a bit on the EPA ruling that establishes the required renewable volumes under the Renewable Fuel Standard (RFS) program for...

By Tom Konrad, Ph.D., CFA Because of rising fertilizer prices, farmers are planting more soybeans than corn.  Soybeans are a legume, meaning that they can fix their own nitrogen in the soil, meaning that they need less nitrogen fertilizer, the price of which is spiking due to rising natural gas prices.  Corn, in contrast, needs more nitrogen than most other crops.   High gas prices are rising because of Putin’s war on Ukraine, which is also preventing Ukrainian farmers from planting this year’s wheat crop, while sanctions are likely to disrupt wheat supplies from Russia as well. Corn and (to a lesser extent,...