By Nate Birt
Dollar Trends Could Help U.S. to Sell More Beans
Amid low commodity prices and struggles in South America, President Jerry Gulke of The Gulke Group says he thinks China’s demand for soybeans should remain good and allow the U.S. to not lose as much market share to competition in the Southern Hemisphere.
“Will buyers really trust Argentina and Brazil, third-world countries that are falling apart at the seams, to honor their contracts and be able to deliver like they should?” Gulke tells “Top Producer Podcast” host Pam Fretwell. “Because we need to eat soybeans every month around the world, and certainly in China. Demand for protein globally will continue strong. It was one thing at $14 soybeans and $7 corn to focus totally on price competitiveness and go look for a 10% reduction because of currency differences. It is entirely another at $8.50 soybeans and $3.80 corn.”
By Alison Rice
Federal Reserve Won’t Touch Interest Rates
Contrary to expectations of higher rates, the Federal Reserve on Sept. 17 announced it will keep the federal funds target rate at 0% to 0.25%.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near-term,” the Fed explained in its statement.
The news might bring a sigh of relief to farmers worried about higher borrowing costs, but analysts expect it to only be a temporary move ahead of an inevitable rate increase.
By Mike Adams
Ethanol Industry Awaits Updates About Renewable Fuels Standard Changes
The Renewable Fuels Standard is celebrating its 10th anniversary. Yet the Environmental Protection Agency (EPA) will soon issue a ruling that could spoil the party: The agency’s final rule for the 2014-16 requirements is expected no later than Nov. 30 of this year.
Although EPA has often missed deadlines, this one is expected to be met thanks to a recent court order. The focus is on required 2016 volumes of ethanol. EPA has made some changes to its proposal to reduce required levels of ethanol, and more are expected, but the ethanol industry sees any reductions by EPA as a misuse of the agency’s waiver authority. That’s because the industry is producing fuel at a rate of about 14.8 billion gallons with the capacity to produce at least 15.5 billion, exceeding the 2015 and 2016 requirement of 15 billion gallons.
The industry has come up short on meeting required cellulosic levels, yet cellulosic ethanol production is picking up. Through July, 1.3 million gallons of cellulosic ethanol had been produced. Added with biogas, total production stands at 62.4 million gallons, up from 33 million in 2014.
On a positive note, USDA recently announced 21 states will receive grants supporting nearly 5,000 pumps at more than 1,400 fueling stations to offer higher ethanol blends. The industry can only hope the news will be as positive from EPA; otherwise, litigation remains a possibility.
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