Corn growers have been excited about ethanol for 20 years. Soybean growers have been excited about biodiesel for the past 10 years. Now that the excitement has become contagious and spread to Congress, automakers, environmental advocates, and the motoring public, agriculture is now faced with producing biofuels (along with food and all of those other things made from corn and beans.) Is it time to say Hooray! Or is it time to say Oooops!

Let’s think about this challenge for a bit says Kenneth G. Cassman, Director of the
Nebraska Center for Energy Sciences Research at the University of Nebraska-Lincoln. His presentation at the University of Illinois conference which addressed the renewable fuels and livestock feed challenge, was one of several which raised numerous issues that will impact every Cornbelt farmer. Cassman characterized the challenge as having “To meet energy and food needs of a rapidly growing and wealthier human population while avoiding global climate change caused by reliance on fossil fuels and irreparable destruction of natural resources.” Obviously this is a challenge that will not be resolved tomorrow or with some executive order. It will have impact on everyone’s livelihood, culture, economy, and way of life.

Cassman says the whole issue has come to a head quite suddenly. Among the reasons were increased demand for petroleum from India and China, the Congressional mandate for ethanol use and President Bush’s proposal for cellulosic ethanol research, as well as the tremendous amount of investment in ethanol and biodiesel production plants. He says current goals for ethanol production are 12 billion gallons by 2010 and 15 billion gallons by 2015. To meet that goal ethanol will require 34% of the US corn crop in 2010 and 46% of the corn crop in 2015, even with a 10% increase in acreage and trendline yield increases.

But, Cassman rhetorically asks, “If you lived in New York City, why would you pay taxes to support expansion of biofuel production capacity?” New Yorkers would not do that to increase profitability for agriculture or raise farmland prices, but they might do that “To reduce dependence on imported oil and decrease greenhouse gas emissions while protecting soil and water quality.” Again he rhetorically asks, “If you are a livestock producer, why would you pay taxes to support expansion of biofuel production capacity?” Livestock producers would not voluntarily do that to increase profitability for grain producers or to increase their own feed costs and reduce their profits. But he suggests livestock producers might go along with the concept if:
1) If adequate food, feed, and biofuel feedstock supply could be ensured at reasonable cost for consumers, livestock and biofuel producers.
2) If environmental benefits of biofuels are achieved and greenhouse gas emissions can be reduced, and soil and water quality could be protected.
3) If WTO negotiations for free trade could be facilitated by reducing certain program crop payments.

Cassman says that farmers around the world will have a share in energy production from crops, and many will be more efficient at that than US farmers. Based on volume of production, palm oil from Malaysia is 8-9 times more productive in biodiesel production than are US or Brazilian soybeans, and 60% more productive than corn for producing ethanol. To feed the demand for biofuels an insufficient volume of grain and oilseeds has been channeled into the food system causing food prices to rise. As a further result an increased amount of fertilizer has been applied to increase yields, water quality has been reduced, greenhouse gases have increased rather than decreased, marginal land has been put back into cultivation, and cropland has spread into fragile areas in other parts of the world. Cassman contends corn and bean yields have to be accelerated without the need for large acreage expansion; yields have to be achieved without a negative environmental impact, and potential yields have to be raised while stress tolerance is improved.

If those goals are to be achieved, Cassman says there are many things needed?
1) Development of high yield crop production systems that reach 85-90% of genetic yield potential, which absorb N with 70% efficiency, which have a positive energy balance and are 90+% efficient water use in irrigated systems.
2) Customized controlled release fertilizers.
3) Site-specific crop and soil management systems both in large farming operations and small fields in developing countries
4) Improved crop management dynamics for better using climate information and weather forecasting for better using fertilizers and controlling insects and disease.
5) Better use of improved hybrids and cultivars without dependence on biotechnology.
6) Inflation has to be avoided in food prices
7) Environmental expectations have to be met
8) There has to be an expanded use of distillers’ grains for cattle, swine, and poultry; with additional value-added uses for DDGS.
9) There has to be an adequate research investment focused on raising yields and increasing environmental quality.
10) More research on using co-products from biofuel production.
11) If there is a measurable increase in environmental degradation, public support and favorable tax incentives for biofuels will disappear!

Summary:
Agriculture has been criticized for causing food prices to increase while it also tries to satisfy the needs of the biofuels industry. The “overnight” rise in the demand for biofuels has created numerous policy and research challenges that need to be addressed. While the general consumer and the livestock producer will not voluntarily endorse increased profitability for corn and soybean producers, there may be support if resolution can be found for environmental and trade issues, along with reasonably-priced livestock feed. To reach agreement, corn and soybean yields will have to increase substantially without increased acreage and without increased environmental degradation.