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Farmland Values and Credit Conditions
AUGUST 21, 2013 By: News Release CHICAGO–Acording to the latest AgLetter published by the Federal Reserve Bank of Chicago, for the second quarter of 2013, “good” farmland values were up 17 percent from a year ago in the Seventh Federal Reserve District, which consists of Illinois, Indiana, Iowa, Michigan and Wisconsin. However, agricultural land values registered no gain in the second quarter relative to the first quarter of 2013, according to a survey of 211 agricultural bankers. The last time there was no quarterly increase in agricultural land values was in 2009. Generally, the stellar year-over-year gains in farmland values across the five District states masked the comparative weakness of the quarterly results. Moreover, the percentage of survey respondents anticipating farmland values to fall during the third quarter of 2013 was the same as the percentage predicting them to rise (7 percent); 86 percent of responding bankers expected farmland values to be stable. The District’s agricultural credit conditions were generally better in the second quarter of 2013 than a year earlier. The availability of funds for lending by agricultural banks was up relative to a year ago; the banks’ deposits were enhanced not only by high crop prices but also by payments for insured losses due to last year’s drought. Repayment rates for non-real-estate farm loans were higher than a year ago, with 94 percent of the respondents’ agricultural loan portfolio having no significant repayment problems. Renewals and extensions of non-real-estate farm loans declined from the level of a year earlier. The responding bankers perceived that non-real-estate loan demand for the April through June period of 2013 was below that for the same period last year. For the second quarter of 2013, the District’s average loan-to-deposit ratio edged up to 64.6 percent—12.6 percentage points below the average level desired by survey respondents. Finally, interest rates on farm loans rose for the first time since early 2011. Looking forward Crop producers will face tighter cash flows as their revenues decline (especially if crop prices slide further). Yet, the responding bankers did not expect agricultural loan volumes to rise for the July through September period of 2013 relative to the same period last year. In fact, some categories, including operating loans and livestock loans, were anticipated to shrink in the third quarter of 2013 relative to their levels in the same quarter of 2012, according to the survey respondents. Falling crop prices should bring relief to livestock producers, whose profits have suffered on account of the high feed costs in recent years. Continue reading
US Biodiesel Imports Surge In June
By Ron Kotrba | September 04, 2013 Here’s a breakdown of where the imports came from, and where the exports went. The U.S. also imported nearly 22 million gallons of “other renewable diesel” in June, up from only 5.7 million gallons in May. In June, 17.2 million gallons of “other renewable diesel” came from Singapore while 4.7 million gallons originated in Finland—two Neste Oil strongholds. Roughly half of the 24.6 million gallons U.S. exports in June went north of the border to Canada (12.8 million gallons), while 6 million gallons was shipped to Spain, and nearly 5.7 million gallons went to Malaysia. Australia received 126,000 gallons of U.S. biomass-based diesel while 42,000 gallons was sent to Taiwan. Continue reading
The Latest Clean Energy Cocktail: Bacteria And Fungus
BY JEFF SPROSS ON AUGUST 23, 2013 By throwing together a common fungus and a common bacterium, researchers are producing isobutanol — a biofuel that gallon-for-gallon delivers 82 percent of gasoline’s heat energy. The more common ethanol, by contrast, only gets 67 percent of gasoline’s energy, and does more damage to pipelines and engines. And the University of Michigan research team did it using stalks and leaves from corn plants as the raw material. The fungus in question was Trichoderma reesei , which breaks down the plant materials into sugars. The team used corn plant leftovers in this case, but many other forms of biomass like switchgrass or forestry waste could also serve. The bacterium was Escherichia coli — good old-fashioned E. coli — which then converted those sugars into isobutanol. Another team of researchers at the University of Wisconsin-Madison recently came up with a similar process by studying leaf cutter ants, but their work produced ethanol instead. The University of Michigan team also got the fungi and bacteria to co-exist peacefully in the same culture and bioreactor. That means fewer cost barriers to commercializing the process: “The capital investment will be much lower, and also the operating cost will be much lower,” Xiaoxia “Nina” Lin, the team’s leader, explained. “So hopefully this will make the whole process much more likely to become economically viable.” The big advantage of a cellulosic biofuel like this is twofold. One, because it can be produced from crops that don’t double as a food source, demand for it won’t drive up food prices or contribute to global food insecurity. Traditional corn-based ethanol obviously competes with one of the world’s most basic and widely-used foods, and American and European demand for it has contributed to spiraling food costs and crises in Guatemala and across the developing world. Studies looking into the 2008 food crisis determined that biofuel policies contributed to the problem, compounding the threat of global food insecurity, which in turn helps drive geopolitical upheaval and destabilization. Two, by driving up demand for food crops, traditional biofuels encourage individuals and countries to clear ever more natural land for agriculture. Grasslands and natural forest store more carbon from the atmosphere than cropland. So the growth in biofuel production, means less natural ecology to absorb carbon, leaving more greenhouse gas in the atmosphere. On top of that, agriculture involves its own carbon emissions from driving tractors and such. So put it all together and traditional biofuel production is largely self-defeating in terms of the final amount of carbon dioxide left in the atmosphere. But if a process like this one produces biofuel purely from waste materials — stuff left over from crops we would’ve grown regardless, on land we would’ve cleared regardless — those biofuels will deliver a much bigger net positive when it comes to fighting climate change. “We’re really excited about this technology,” said Jeremy Minty, another member of the team. “The U.S. has the potential to sustainably produce 1 billion tons or more of biomass annually, enough to produce biofuels that could displace 30 percent or more of our current petroleum production.” And it’s not just fossil fuels that could be replaced, either. Petrochemicals are also used in making a host of other products, especially plastics. The research team hopes their work could be adapted to replace the petrochemicals used in those processes as well. HT: CleanTechnica Continue reading
