CAMBRIDGE, Neb. (RFD News) — Biofuel groups and corn farmers continue urging the Senate to pass legislation allowing year-round E-15 fuel sales.
Jan tenBensel with the Nebraska Ethanol Board says one of the most common criticisms surrounding ethanol is the long-running food-versus-fuel debate.
“When you go out and try to educate people and talk to people, there are a lot of good questions. Food versus fuel always comes up as one. We’re driving the price of groceries up, that’s what the detractor would say. But if you go to Walmart today, and you buy an 18-ounce box of, say, Corn Flakes, that’s about five bucks, $4.98, so let’s round up. That’s only got six cents worth of corn in it. You could double the price of corn right now and have 12 cents worth of corn in the Corn Flakes, so the six cents the farmer’s receiving for the price of corn is not the food inflation issue that we take the blame for. There are many other factors, from transportation to general labor and manufacturing of food items, but I love my corn flakes analogy, because it’s easy to post to. I’m like, well, if you don’t believe me, Google it. Get your Walmart app, and look at what Corn Flakes cost, and realize that the farmer is literally pulling in about one percent of that product cost.”
In addition to arguing ethanol is not driving grocery inflation, tenBensel says E-15 could also help lower fuel prices for consumers.
“E15, as you’ve heard me say many times before, replaces the most expensive, the most cancerous, and the most toxic parts of gasoline, technically ethanol, does not the E15, but by having a 15 percent blend, we have the potential to offset more of those products. A couple of weeks ago, ethanol was $2, and aromatics, which are the octane boosters in gasoline that are petroleum-based, were $4.26. So, it’s double the price for that first 15 percent of the fuel.”
The standalone bill allowing year-round E-15 sales remains in a holding pattern and would require 60 votes in the Senate to advance to President Trump’s desk.
Meanwhile, corn and soybean basis values strengthened over the past month across much of the Eastern Corn Belt.
Josh Strine with Purdue University says corn basis to July futures strengthened in nearly every crop reporting district tracked by Purdue’s Crop Basis Tool, with some of the largest gains occurring in Ohio.
“Corn basis to July futures strengthened in all but three crop reporting districts tracked by the crop basis tool over the past month. The basis weakened in southwest Illinois, southwest Michigan, and east central Ohio. The largest decrease occurred in east-central Ohio, where basis fell by 9 cents per bushel. The greatest strengthening occurred in south-central Ohio, where the basis increased by 23 cents per bushel, pushing the local basis even with July futures. The most defining feature of the current corn basis map is the continued shift in basis strength from the west to the east. In Ohio and Michigan, corn basis is above the three-year historical average in all but one crop reporting district. South Central Ohio stands out with the current basis at 25 cents per bushel above its historical average. In Indiana, most districts are near or slightly below historical norms, and several districts along the Ohio River are carrying positive basis.”
Strine says soybean basis values also posted broad gains, particularly along the Ohio River.
“Soybean basis to July futures increased in all but one crop reporting district tracked by the crop basis tool. The exception was southwest Michigan, where basis fell by six cents per bushel, well below the historical trend of a 14-cent per bushel increase. Gains elsewhere range from eight cents per bushel in west central Ohio to 26 cents per bushel in central Michigan. Basis along the Ohio River was the standout this month. Looking at the average of river terminals in Ohio and Indiana, soybean basis increased by 19 cents per bushel, more than double the historical trend of eight cents per bushel. River basis now stands at a positive 14 cents per bushel, 13 cents above the two-year historical average. In southeast Indiana, basis strengthened by 23 cents per bushel to positive two cents per bushel, nine cents above the historical norms. Southwest Indiana is even with July futures, ten cents above its historical average.”
According to Strine, historical trends indicate a more mixed pattern for corn and soybean basis levels going forward.
