September 20, 2000

The National Corn Growers Association (NCGA) and Archer Daniels Midland (ADM) have begun a two-year research project partnership that is expected to expand corn markets. The goal of the research is to create a commercial manufacturing process that converts corn fiber or bran into higher valued products. These would include chemical feed stocks, such as ethylene glycol and propylene glycol for antifreeze, and fuels such as ethanol. Corn fiber or bran is an abundant by-product of the wet milling industry and is used as low-priced feed.

The project won't provide a quick-fix to the current low prices corn growers are facing because of the nation's 10 billion-bushel corn crop. "But it is another example of how NCGA has been using grower checkoff dollars to fund research that creates higher valued products from corn," said Floyd Schultz, Plainfield, IL, farmer and chairman of the NCGA Customer and Business Development Action Team. "Producing the higher valued products will grind more corn, and reducing the supply of corn ultimately improves prices," he said.

Martin Andreas, ADM senior vice president and assistant to the chief executive, said, "Making higher value products from corn has been the driver for the development of the corn processing industry. Cooperation among the federal government, NCGA and industry has made this project possible. This cooperation is needed if we are to change our country's reliance on non-renewable resources to a reliance on renewable feed stocks."

Schultz added, "Growers will benefit from the entire project and leverage their investment of checkoff dollars 10-to-1." In the $2.5 million project, NCGA, as the project manager, will contribute $250,000 in staff management and ADM will provide about $600,000 in researcher time and other resources. The U.S. Department of Energy has awarded a $1.7 million grant for the research, while Battelle Pacific Northwest National Laboratory of Richland, WA, is a subcontractor for the project.

DOE's Vision for the Agricultural Industry of the Future program has a goal of having renewable resources provide 10% of the consumer chemical feedstock market by 2020. The $1.7 million DOE grant is part of DOE's Bioproducts and Bioenergy Technology Program, a new effort that develops opportunities in bioproducts, biopower and biofuels.

"If plants were the feedstock for 10 percent of the chemical market today, farm income would be more than $5 billion higher," said Schultz. Furthermore, he noted that the increased use of renewable resources in chemical feedstocks would decrease oil imports, reduce greenhouse gas emissions and create new industries in the U.S.

In a related development, Eric Vaughn, president of the Renewable Fuels Association (RFA) and former White House policy advisor for national energy security, said if the United States did not "take quick, bold action to boost the use of domestic energy sources, we are in jeopardy of seeing history repeat itself. Reading today's headlines is like stepping back in time. Saddam Hussein is again accusing Kuwait of stealing oil. In 1990, this accusation led to war. Like then, the U.S. today is threatening a military response if Iraq acts."

To complicate matters, he added, Iraq, "our archenemy only 10 years ago, is America's fastest growing source of imported oil. Our voracious appetite for energy forces us to import Iraqi oil on one hand, while enforcing the decade- old no-fly zone on the other. This is sheer lunacy, both in terms of national security and energy policy."

The United States could "squander the longest economic expansion in our history" unless "bold action is taken soon to pursue a realistic, long-term energy policy focusing on domestic energy alternatives."

There are efforts underway to increase the use of domestic ethanol, but "we should push further and faster. Just a portion of the $50 billion we spend annually defending Persian Gulf oil could triple or quadruple ethanol production in the U.S.," Vaughn said. "Increasing the use of ethanol will help farmers. It will improve air quality. It will improve our balance of trade. It will keep the economy strong and create thousands of jobs."