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Ukraine Hopes To Cash In On Massive Corn Harvest
http://www.ft.com/cms/s/0/54852a9a-1ba2-11e3-b678-00144feab7de.html#ixzz2f3Up7YOa By Roman Olearchyk and Emiko Terazono Fifty years ago, inspired by a visit to the US cornbelt, Nikita Khrushchev’s grand plan to grow corn across the Soviet Union resulted in devastating crop failures and food shortages. Today, however, in one ex-Soviet state, his vision may be realised. This year, Ukrainian farmers are harvesting their largest corn crop, and as Serhiy Didyk, who farms on the steppes of central Ukraine, said: “Khrushchev’s dream of producing vast quantities of corn on our land is finally becoming reality.” With its rich black soil, Ukraine has historically been known as the “breadbasket of Europe”. Already a large wheat supplier to the Middle East, now Ukraine’s corn acreage is expanding as well, as it offers higher profits and faces far less state regulation than wheat markets. And unlike past efforts for mass production of the grain, these days better quality seeds, fertiliser and pesticides, and favourable weather have boosted yields. Changes in the weather patterns in Ukraine in the past few years have “made corn growing more attractive and less risky compared to other agricultural crops traditionally grown in Ukraine,” says the US Department of Agriculture. This year’s expected corn harvest of 29m tonnes has set the stage for a 35 per cent jump in exports to 18m tonnes, catapulting the eastern European country to the world’s second-largest corn exporter alongside Argentina and Brazil, according to the USDA. Kiev is pinning high hopes on its corn exports. In a rallying call, Mykola Prysyazhnyuk, Ukraine’s agriculture minister, last week said: “There will be strong demand for corn on global markets, with Asia, the Middle East and Africa increasing imports. Let’s make this Ukrainian corn.” The country’s corn boom is a bright spot for Ukraine, which is grappling with its second recession in five years, a ballooning current account deficit and also hit by the recent emerging market currency turmoil that has depressed Kiev’s foreign currency reserves to dangerously low levels. Grain exports – expected to total a record $5.5bn this year, according to consultancy Ukragroconsult – have not been able to offset the sharp declines in revenue from heavy industry and other resource sectors. However, with investments in agriculture expected to rise, the sector’s growth is expected to provide diversity for an economy that is regarded as being too reliant on exports of steel and minerals. Vladimir Pantyushin, regional economist at Barclays, said: “Agriculture has partially offset the decline of metals exports and can extend these gains over the short-to-medium term.” Ukraine aims to meet growing global demand for corn as rising incomes in emerging markets lead to higher meat and dairy consumption. The country’s first ever shipment of corn to China is expected to leave ports in the coming weeks as part of a $1.5bn loan-for-corn deal brokered by both countries last year. Countries including Egypt, Israel, and Spain are among the largest buyers of Ukrainian corn, while producers are also making inroads into Asia, exporting to South Korea, Japan and Malaysia, thanks to competitive prices compared to US and South American counterparts. Asian importers, traditionally reliant on US and Latin America, are also keen to diversify their sources after the worst US drought in 50 years in 2012 devastated corn crops, leading to a price surge. Ukraine’s rising prominence in the world agriculture markets has attracted Monsanto, the US agritechnology group, which announced plans to pump $150m into building a seed production facility, and Dupont Pioneer this summer started production at a $40m seed plant. However, the corn shift is not without challenges. Bumper grain crops worldwide have depressed international prices to three-year lows. Meanwhile the country’s infrastructure is desperately in need of investment in equipment, grain storage and logistics such as ports, roads and railroads. Leading agribusiness groups – international traders such as Cargill, Archer Daniels Midland, Bunge – are already in Ukraine, but Kiev needs more, say analysts. “The government needs to improve the investment climate in the country overall, reduce its role in the sector further and instead focusing on improvements in infrastructure in order to be prepared for more grains exports,” said Aivaras Abromavicius, partner at East Capital, which manages $5bn in emerging markets But these are challenges one ex-Soviet leader could only have dreamt of. Mr Didyk, the corn farmer, said that if Khrushchev were alive today, “he would be happy to see our big corn crop,” although he probably would not be as pleased to see Ukraine becoming such a leading independent agriculture player. Continue reading
Cellulosic Leaders Talk Feedstock Procurement At Neb. Event
Taylor Scott International News Taylor Scott International Taylor Scott International, Taylor Scott Continue reading
USDA Announces Support For Producers Of Advanced Biofuel
Posted: Friday, September 13, 2013 2:33 pm | Updated: 2:33 pm, Fri Sep 13, 2013. OMAHA, Neb. — Agriculture Secretary Tom Vilsack announced Friday that the U.S. Department of Agriculture (USDA) is making payments to support the production of advanced biofuel. USDA is making nearly $15.5 million in payments to 188 producers through the Advanced Biofuel Payment Program. USDA Rural Development Acting Under Secretary Doug O’Brien made the announcement on Vilsack’s behalf in Omaha, Neb., at the National Advanced Biofuels Conference. USDA remains focused on carrying out its mission, despite a time of significant budget uncertainty. Today’s announcement is one part of the Department’s efforts to strengthen the rural economy. “Producing advanced biofuels is a major component of the drive to take control of America’s energy future by developing domestic, renewable energy sources,” O’Brien said. “These payments represent the Obama Administration’s commitment to support an ‘all-of-the-above’ energy strategy.” The funding is being provided through USDA’s Advanced Biofuel Payment Program, which was established in the 2008 Farm Bill. Under this program, payments are made to eligible producers based on the amount of advanced biofuels produced from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include but are not limited to: crop residue; animal, food and yard waste; vegetable oil; and animal fat. O’Brien noted that today’s announcement serves as another reminder of the importance of USDA programs for rural America and a reminder of the need for Congress to get a comprehensive Food, Farm and Jobs Bill done as soon as possible. “Job seekers in rural America need new and expanded investments in renewable energy, biofuel and bio-based product manufacturing, all of which can help create jobs in rural areas,” said O’Brien. Through the Advanced Biofuel Payment Program and other USDA programs, the department is working to support the research, investment and infrastructure necessary to build a strong biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel. More than 290 producers in 47 states and territories have received $211 million in payments since the program’s inception. It has supported the production of more than 3 billion gallons of advanced biofuel and the equivalent of more than 36 billion kilowatt hours of electric energy. For example, Riverview, LLP, a Minnesota-based company, will be receiving an $8,040 payment to help offset the cost of producing electricity from two anaerobic digesters. The two digesters use manure from two of the company’s dairy operations to produce electricity, which is sold to Great River Energy. During the last quarter of 2012, the anaerobic digesters produced almost 4.9 million kilowatt hours of electricity, enough to power more than 400 homes a year. American Biodiesel, Inc. (dba Community Fuels) in Encinitas, Calif., is receiving a $47,186 payment for its quarterly production of biodiesel from a variety of sources, including canola and soybean oil. The biodiesel reduces emissions and is primarily used as an alternative to diesel fuel. In the past, Community Fuels has used funds from the Advanced Biofuel Payment Program to install equipment and increase production at its bio-refinery at the Port of Stockton, Calif. View the complete list of producers receiving payments here. President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way, strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values. President Obama and Agriculture Secretary Vilsack are committed to a smarter use of federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities. USDA, through its Rural Development mission area, has a portfolio of programs designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. USDA has made a concerted effort to deliver results for the American people, even as the department implements sequestration, the across-the-board budget reductions mandated under terms of the Budget Control Act. USDA has already undertaken historic efforts since 2009 to save more than $828 million in taxpayer funds through targeted, common-sense budget reductions. These reductions have put USDA in a better position to carry out its mission, while implementing sequester budget reductions in a fair manner that causes as little disruption as possible. USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users). Continue reading
