Corn and Ethanol: Green, Getting Greener. Rick Tolman National Corn Growers Association

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Corn and Ethanol: Green, Getting Greener Rick Tolman National Corn Growers Association

2007 a Very Good Year Production reaches 13.1 billion bushels Largest crop in U.S. history Average yield hits 151.1 bushels/acre The second-highest yield estimate in history

2007 Corn Supply and Demand Other Domestic Ethanol Surplus Export Feed Total Supply: 14.4 billion bushels Feed: 42% Ethanol: 22% Export: 17% Other Domestic: 9% Surplus:10% USDA 1/2008

Outline A. Meeting Demand B. Reducing Inputs C. Rational Approach to Sustainability

A. Three Steps to Meeting Demand 1. Increase corn production by boosting average corn yield significantly 2. Displace more corn in feed use with coproducts 3. Improve efficiency to squeeze more ethanol from each bushel of corn

1. Increasing Corn Production An example of making the unimaginable a reality U.S. Corn 1944 2007 % Change 1944-2007 Acres Harvested 85 mil 85 mil Price (Season Avg) $1.03 $3.04 +195% Production 2.8 bil bu 13.1 bil bu +371% Yield 33 bu/acre 151 bu/acre +364% Source: USDA

Corn Yield Trends Are Accelerating bu/acre 190 180 170 160 150 140 130 120 110 100 90 80 70 60 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 178 175 164 35 Year 15 year 10 year Source: USDA

Step-Changes in Corn Potential 300 Average Corn Yield (in bushels per acre) 250 200 150 100 50 0 1970 1990 2010 2030 Average U.S. Corn Yield in 2007 was 151.1 Bushels Per Acre Historical Yield Projection 30-Year Trend, Based on Historical Yield Projection Molecular Breeding Benefit Biotechnology Yield Benefit Source: Monsanto

2. More Corn to Ethanol We increase portion of feed corn going to ethanol by replacing feed corn with high-nutrient ethanol coproducts Corn displaced by DDGS (mmbu) 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16

3. Efficiency in Ethanol Production Potential Ethanol Conversion Rates Gallons/Bushel 3.4 3.3 3.2 3.1 3 2.9 2.8 2.7 2.6 2.5 2.8 Base Rate (2005) 2.94 With High Fermentable Hybrids 3.3 With Fiber Conversion

Corn Available for Feed, Food and Export 2002 2006 2007 2015 (Projected) Harvested corn acres & yield 69.3M (129.3 bu/a) 70.6M (149.1 bu/a) 86.5M (151.1 bu/a) 85.0M (180 bu/a) Total Corn Supply Available (prod = carry in) 10,573 Mbu 12,512 Mbu 14,393 Mbu 17,232 Mbu Ethanol per A 350 gal/a 404 gal/a 435 gal/a 575 gal/a Ethanol produced 2.96B gal 5.8B gal 8.3B gal 15.3B gal Corn used for ethanol 1,093 M bu (10%) 2129 M bu (17%) 3010 M bu (21%) 4,695 M bu (27%) Corn Supply (Less Used for Ethanol) DDG Disp (M bu eq) Total 9,480 189 9,669 M bu 10,383 515 10,898 M bu 11,383 792 12,175 M bu 12,537 1,452 13,989 M bu

Linking Biofuels to World Hunger is Irresponsible!

Food vs. Fuel: U.S. Corn Exports 3000 2500 All-Time Record (2.45 bbu.) 2000 1500 1000 500 Million bushels 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Crop Year *Projected Source; USDA, ERS; ProExporter Network * *

The Truth about Ethanol Our production and surplus numbers indicate we can easily meet demand Surplus corn for 2007 is projected at 1.3 billion bushels Total supply for 2008 high even with lower acreage planted World hunger has many causes. Lack of corn is not one of them.

Food vs. Fuel: Value of Corn in Retail Food Items Product Qty. Corn Req. Value of corn in unit @ $2.40/bu Value of corn in unit @ $4/bu Beef 1 lb. 2.8 lbs. $0.12 $0.19 Pork 1 lb. 3.6 lbs. $0.15 $0.26 Milk 1 gal. 1.8 lbs. $0.08 $0.13 Eggs 1 dz. 4.0 lbs. $0.17 $0.28 Broiler 1 lb. 2.0 lbs. $0.09 $0.14 Chicken Corn Flakes 12 oz. 10 oz. $0.03 $0.04 Sources: Beef Checkoff; National Pork Board; USDA-ERS

Food vs. Fuel: Farm Inputs Are = 19% of Food Dollar A $1 per gallon increase in the price of gasoline has three times the impact on retail food prices as a $1 per bushel increase in corn prices. Sources: USDA-ERS; Urbanchuk, The Relative Impact of Corn and Energy Prices in the Grocery Aisle. 2007

B. Reducing Inputs More Output Per Input

Sustainability: Pesticide Use in Corn Production INSECTICIDE USAGE IN CORN PRODUCTION 0.5 Increasing adoption of hybrids with insect-resistant and herbicide-tolerant traits have greatly reduced the need for synthetic applications of herbicides and insecticides. pounds of a. i. / acre pounds of a. i. / acre 0.4 0.3 0.2 0.1 0 1990 3 2.5 2 1.5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 HERBICIDE USAGE IN CORN PRODUCTION 2001 2002 2003 2004 2005 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Sources: Agricultural Chemical Usage 2006

Corn Nutrient Use Improving Bushels Produced Per Pound of Nutrient Applied 3 2.5 2 1.5 1 0.5 0 0.61 0.84 1.03 1980 2005 Change Bil Bushels % U.S. Corn Production 6.40 11.11 +74 Nutrient Use on Corn Mil. S. tons % Nitrogen 5.2 5.4 +3 Phospate 2.4 1.9-20 Potash 2.9 2.2-24 Total 10.6 9.6-10 1.33 2.1 2.89 1.09 1.65 Nitrogen Phosphate Potash 2.49 1980 1990 2005 1980 1990 2005 1980 1990 2005 Source: USDA/Fertilizer Institute

2006 CTIC Tillage Survey Reporting Percent Residue Cover Management Conventional 0-15% Reduced 15-30% Conservation +30% 37.8% 28.7% 31.7% 30.0% 28.0% 27.0% 27.9% 25.5% 23.5% Percent of Cropland 28.4% 33.8% 27.6% 43.7% 24.6% 43.7% 25.4% 44.7% 26.2% 45.8% 22.9% 50.2% 24.6% 47.5% 23.7% 50.8% 21.8% 54.7% 1990 1992 1994 1996 1998 2000 2002 2004 2006 Conventional-till Reduced-till Conservation-till

No-Till Trends NO-TILL ACRES AS % OF REPORTING ACRES 35% 31.5% % of Reported Acres 30% 25% 20% 15% 10% 5% 7.4% 21.2% 21.6% 25.3% 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 NOTE: DOES NOT INCLUDE OTHER CONSERVATION TILLAGE PRACTICES SUCH AS LOW-TILL, RIDGE-TILL, ETC.

Erosion on U.S. Cropland by Year 3200 Million Tons per Year 2800 2400 2000 1600 1200 800 400 0 1982 1987 1992 1997 2001 2003 Wind Erosion Sheet and Rill Erosion Source: NRCS, January 2007

Energy Balance: Most Studies Show Positive Return Energy Balance Ratio (Units Out/Units In) FUTURE (w/biomass burner, no-till corn, etc.) 4.67 60,000 2.10 Kim & Dale NR Canada Shapouri et al. Agri. Canada Wang et al. Lorenz & Morris Shapouri et al. Marland & Turhollow 40,000 Hill 1.36 Wang Delucchi Kim & Dale Graboski Pimentel Keeney & DeLuca 20,000 Farrell Wang et al. 0.00 Pimentel & Patzek 0-20,000 Pimentel Pimentel -40,000 Net Energy Value (BTU/gallon) Patzek -60,000-80,000 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 Source: Wang, Argonne Natl. Labs; and NCGA

Corn s Water Needs Approximately 20-25 inches of water are necessary to produce an acre of average-yielding corn This translates to about 597,388 gallons per acre per year, or nearly 4,000 gallons per bushel Based on 22 acre-inches (U of KY)

What They Don t Tell You Nearly nine out of ten acres of corn require no water other than natural 13% Irrigated 13% 87% Non-Irrigated rainfall Source: USDA 2006

What They Don t Tell You An acre of corn gives off 4,000 gallons of water a day in evapotranspiration About 1 to 1.5 million gallons of moisture per acre annually

Corn: Water Positive In aggregate, corn returns more moisture to the atmosphere than it withdraws from ground and surface water for irrigation 12.4 million acres require 9.22 billion gallons of surface and ground water irrigation per day But the entire corn crop (~83 million acres) is returning about 290 billion gallons of water per day to the atmosphere through transpiration* * 3,500 gallons per day per acre

Water Use in Production 62,600 gallons to produce a ton of steel 39,090 gallons are needed to manufacture a new car, including tires 28,100 gallons to process a ton of beet sugar to make processed sugar 1,500 gallons to process a barrel of beer Source: USGS/USEPA

More Perspective The average home uses 107,000 gallons of water per year 24 gallons of water needed to produce one pound of plastic 101 gallons of water needed to produce one pound of cotton 300 million gallons are needed to produce a single day s supply of U.S. newsprint 150 gallons to produce the average size Sunday newspaper Source: USGS/USEPA

Land Use Controversy Finally, these analyses published in Science may not be termed life cycle analyses. Life cycle analysis (LCA) follows a specific set of rules, one of which is that the most recent and most appropriate data be used. LCA is data driven, but these two analyses are not driven by actual data at all. There are no real, verifiable data in either of these papers on the land use changes that actually occur as more corn is processed to ethanol hence these are not LCA studies. They are in fact speculation. Even if there were such data, ethanol produced in the United States under a specific set of production criteria would not be responsible for anything but its own environmental profile. Dr. Bruce Dale, MSU

Land Use Controversy Brazil can produce twice as much grain and ethanol as it now produces today without clearing another hectare of land. Deforestation is driven by the hypocrisy of those that shout about saving the Amazon Forest, but are willing to pay a fortune for Amazon hardwood for their buildings, home and furniture. If trade in hardwood is prohibited, deforestation will stop. Alfredo Navarro

A Rational Approach to Sustainability.

Steering Committee Members and Participants American Soybean Association Bunge Limited Cargill, Incorporated The Coca-Cola Company Conservation International Cotton, Inc DuPont Farm Bureau Fleishman-Hillard General Mills Inc. Grocery Manufacturers Association/Food Products Association McDonald s Mars, Inc. Monsanto National Association of Conservation Districts National Association of Wheat Growers National Corn Growers Association National Cotton Council Syngenta The Nature Conservancy United Soybean Board World Wildlife Fund

Other expertise University of Wisconsin Michigan State University University of Arkansas NRCS USDA EPA

Accelerating better practice adoption Performance Curve Regulation Performance Shift Best Performance Source: World Wildlife Fund - US

Our working definition of sustainable agriculture Sustainable agriculture will meet the needs of the present while improving the ability of future generations to meet their own needs by: Increasing productivity to meet future nutritional and fiber needs while decreasing impacts on the environment Improving human health through access to safe, nutritious food Improving the social and economic well being of agricultural communities The initial work will focus on the first aspect of sustainable agriculture (first bullet above).

Proposed outcomes Better informed decision-making throughout the agricultural supply chain from grower to consumer A sustainability tool for growers to map and improve their own performance An index based on measurable outcomes that can assist in setting performance goals Documented improved performance over time A single platform that entities throughout the supply chain can use in their sustainability efforts

Maturation of the Industry Key to Sustainability Value Chain Integration Seed to Feed Green Ethanol IP Coproducts Value Optimization Reduce Costs/ GHG Increase Revenues Ethanol tailored hybrids Enterprise-wide process control High-quality branded coproducts Knowledge based smart plant Fractionation: High-value feeds/oils Corn fiber cellulosic ethanol Protein isolates Industrial chemicals Anaerobic digestion Biomass combustion/gasification Combined heat and power; pinch analysis Alternative starch/sugar feedstocks Process simulation Source: Martha Schlicher

Corn Available for Feed, Food and Export 2002 2006 2007 2015 (Projected) Harvested corn acres & yield 69.3M (129.3 bu/a) 70.6M (149.1 bu/a) 86.5M (151.1 bu/a) 85.0M (180 bu/a) Total Corn Supply Available (prod = carry in) 10,573 Mbu 12,512 Mbu 14,393 Mbu 17,232 Mbu Ethanol per A 350 gal/a 404 gal/a 435 gal/a 575 gal/a Ethanol produced 2.96B gal 5.8B gal 8.3B gal 15.3B gal Corn used for ethanol 1,093 M bu (10%) 2129 M bu (17%) 3010 M bu (21%) 4,695 M bu (27%) Corn Supply (Less Used for Ethanol) DDG Disp (M bu eq) Total 9,480 189 9,669 Mbu 10,383 515 10,898 Mbu 11,383 792 12,175 Mbu 12,537 1,452 13,989 Mbu

Summary Organized Campaign to smear corn and ethanol Facts misused and selectively used Corn and ethanol s contribution to the environment and economy strong and getting stronger

Thank you!