This standardshavelargestconsumingadoptedofatheseCarbonscores,reducetoinfrastructuremulti-billion-dollarprojectisdesignedhelpthesepartnerfacilitiestheircarbonintensityaccordingtoSummitSolutions.Thatwillhelpfacilitiesselltheirproductatpremiuminthegrowingnumberstatesandcountriesthathavelow-carbonfuelstandards.California,thelargestethanolstate,andCanada,theU.S.ethanolexportpartner,bothadoptedlow-carbonfuelthatpaymoreforlower carbon fuels.“Summit Carbon Solutions will reduce carbon emissions from the atmosphere and drive job growth across the Midwest,” said Jim Pirolli, chief commercial officer with Summit Carbon Solutions. “Since lowcarbon fuel markets are expanding, this project will also provide a substantial boost to the ethanol and agricultural industries.”
Summit Carbon Solutions continues to proceed through the permitting process steps with the Iowa Utilities Board and with officials in other states.
will include nearly 2,000 miles of pipeline to carry carbon dioxide from Midwestern ethanol refineries to North Dakota, where the gas would be injected underground, rather than released into the “Carbonatmosphere.dioxide (CO2) is released
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Opponents say pipelines like the one Summit Carbon Solutions is developing primarily benefit pipeline companies, which are poised to earn billions of dollars, mainly due to federal tax incentives for sequestering carbon dioxide.
TOP PHOTO: Summit Carbon Solutions says its pipeline project will help slash the ethanol industry’s carbon intensity score.
Summit Carbon Solutions says it’s making significant progress on its carbon capture and storage project, now that more than 700 Iowa landowners have signed more than 1,200 voluntary easements in Iowa.The company has also partnered with 32 ethanol plants in five Midwestern states, including 12 plants in Iowa, to develop the largest carbon capture and storage project in the world.
Safety is key What about the safety of Summit Carbon Solutions’ pipeline?
SUMMIT CARBON SOLUTIONS says its pipeline project will help Midwestern ethanol plants sell their product at a premium in the growing number of that have adopted low-carbon fuel standards.
“There’s an estimated 250 billion tons of CO2 capacity here,” said Pirolli, who added that total annual carbon emissions in the United States are estimated around 5 billion tons.The Summit Carbon Solutions pipeline project will have the capacity to capture and permanently store up to 12 million tons of CO2 every year. That’s the equivalent of removing 2.6 million vehicles from the roads annually, according to the company.Thepipeline project will also help slash the ethanol industry’s carbon intensity score, Pirolli added.
The company says its pipeline project represents a nearly $1 billion investment in Iowa, which will flow to local businesses, restaurants, hotels and more to spur economic growth. The project will also generate an average of $1.2 million in new property taxes in Iowa every year for each of the counties where the system will operate, based on a recent economic impact analysis by Ernst & Young.The project has been controversial, though.Intown hall meetings and public hearings in recent months, a growing number of people have spoken out against the pipeline, citing concerns about safety hazards, dubious climate benefits and eminent domain issues.
A carbon intensity score (CI score) is a measurement of all total hydrocarbons, or greenhouse gas emitted, versus the amount of energy consumed. It is measured in grams per megajoule of energy. The U.S. electrical grid, for example, has a CI score of 72 grams per megajoule, Pirolli said.
Capturing carbon dioxide Summit Carbon Solutions’ pipeline project has been in the works for more than two years. The company’s management team came on board in June 2021, said Pirolli, who noted that the company has 81 full-time employees.
This is important as demand for lowcarbon fuel grows, and businesses focus more on low-carbon credits.
“Ethanol plants can make more money selling into a low-carbon fuel market,” Pirolli said. “Also, you can sell carbon removal credits to industries that are hard to de-carbonize, like the airlines and tech companies.”Allthisbenefits a state like Iowa that has worked hard to develop its ethanol industry, Pirolli said.
“There are 44,000 miles of pipelines operating in Iowa daily,” Pirolli said. “Pipelines are a reliable, proven, safe system.”Inaddition, Summit Carbon Solutions’ pipeline will be outfitted with the latest technology, including fiber-optic monitoring equipment, he added.
reservoirs with high-salinity water. These reservoirs, more than a mile deep, are surrounded by impermeable stone. Also, there’s little or no seismic activity in this region. Summit Carbon Solutions plans to inject CO2 from its pipeline into an area known as the Broom Creek formation in North Dakota.
“This area was the sea floor 480 million years ago, and the unique geology in this area today is conducive to the permanent storage of CO2,” Pirolli said. This region contains large, porous
“The ethanol industry started off with a CI score around 99, but it’s now in the mid-50s, which is about half of the CI score of gasoline,” Pirolli noted. “This pipeline project would cut ethanol’s CI score to 22 to 25 grams per megajoule.”
PIPELINE PROJECT MOVES AHEAD Summit Carbon Solutions aims to help partners reduce carbon intensity scores “Summit Carbon Solutions will reduce carbon emissions from the atmosphere and drive job growth across the Midwest.”
Summit Carbon Solutions reports that the ethanol industry contributes $4.5 billion to Iowa’s gross domestic product every year, supports 44,000 jobs, and purchases 57% of all the corn grown in Iowa.
-Farm News photos by Darcy Dougherty Maulsby
JIM
states and countries
PIROLLI Summit Carbon Solutions chief commercial officer
By DARCYMAULSBYDOUGHERTY yettergirl@yahoo.com
during the ethanol fermentation process,” PirolliWithexplained.Summit Carbon Solutions’ pipeline project, this CO2 is captured and “scrubbed” to remove unwanted components. “It’s about 98 percent pure CO2 that we capture,” said Pirolli, who noted this CO2 can be used to make dry ice.The CO2 will be transported through a pipeline to an area west of Bismarck, North Dakota, where it will be stored underground in sandstone, saline reservoirs.
The team is working with ethanol plants in five Midwestern states, including Iowa, Nebraska, Minnesota, South Dakota and NorthTheDakota.project
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Still, there’s room for improvement, he added. Only about 20 percent of the diesel for off-road use is blended with biodiesel. For the on-road diesel market, this blend level is closer to 70 percent. “We’re strong supporters of Iowa’s biodiesel industry, because we’ve seen the successes people have when they use this product.”
The U.S. economy and a large sector of the global economy run on petroleum products.
price of something gets so high that people stop buying it. That ultimately leads to less demand, more supply and lower prices.
Will there be enough diesel this fall?
has also boosted imports, in part to replace lost volumes from Europe.Diesel demand may rise even more in Europe and Asia in the coming months, some energy market analysts predict.
Running low on diesel supplies
It’s not just retail diesel prices that have skyrocketed. By the summer of 2022, there were reports of farmers booking offroad diesel for farm use as prices climbed above the $5 mark.
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“Biodiesel has been such a great product, both from an economic standpoint and an environmental standpoint,” Maynes said.
“The truck driver shortage is a big issue, and it won’t be resolved by the fall of 2022, unfortunately,” he said.
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These high diesel prices have come at a time when many companies say they’re already having trouble finding truck drivers. Skyrocketing diesel prices can deter owner-operators from driving as many loads, since it cuts into their earning potential. This could lead to
Official: Supply chain 'is pretty fragile right now'
“The key question about the future of diesel prices and supplies revolves around when peak demand will hit,” Maynes said. “In the Corn Belt, that all depends on when harvest starts, and how fast it progresses. There are a lot of wildcards at this point.”Until then, the cost of fuel remains high. USDA estimates show that the cost of fuel, lube and electricity is expected to increase 34 percent in 2022 compared to 2021, reports the American Farm Bureau Federation (AFBF). Now’s a good time to have conversations with local fuel retailers for the opportunity to price hedge and utilize on-farm fuel storage, said Shelby Myers, an AFBF economist.FUELIowa has worked hard to support legislation that gives people more flexibility to store larger quantities of fuel onsite. FUELIowa also supports homegrown fuels like biodiesel.
A WORLDWIDE DIESEL SUPPLY CRUNCH is making more of the world dependent on U.S. fuel exports, a situation that could worsen heading into the winter, say energy analysts.
By DARCYMAULSBYDOUGHERTY yettergirl@yahoo.com
While expensive diesel fuel is challenging enough, there’s one thing that’s even worse — diesel shortages. With the fall 2022 harvest fast approaching, is there reason to be concerned about diesel“Wesupplies?doneed to pay attention to diesel supplies, be aware of potential issues and plan ahead,” said John Maynes, director of government and regulatory affairs for FUELIowa, which represents Iowa’s fuel industry. “Any disruption to the fuel distribution system, from the war in Ukraine to a hurricane, can rock the supply chain, which is pretty fragile right now.”
A worldwide diesel supply crunch is making more of the world dependent on U.S. fuel exports, a situation that could worsen heading into the winter, say energy analysts. Diesel prices soared in the wake of Russia’s invasion of Ukraine, as efforts to retaliate against Russian President Vladimir Putin led to bans on Russian oil.
Diesel, in particular, powers the container ships that transport goods around the world. It fuels the trucks that collect these items from the ports, bring them to warehouses and distribute them to communities across the country.Farmers and construction companies also rely on diesel to keep rolling. As diesel prices
Pioneer.com Science
While gasoline tends to make headlines, diesel prices started generating even more sticker shock in the summer of 2022, as fears of a possible diesel shortage started emerging.
an even lower supply of truck drivers, Maynes said.
-Farm News photo by Darcy Dougherty Maulsby
By early August 2022, Reuters reported that U.S. distillate fuel oil inventories had depleted to critically low levels, as stocks of diesel, heating oil and other distillate fuel oils fell by more than 2 million barrels to 109 million barrels, according to data from the U.S. Energy Information Administration (EIA).The U.S. will need to balance rising export demand with domestic needs that are also expected to increase, especially as the 2022 harvest gets underway, Maynes said. “I’m not trying to sound an alarm, but all these factors are a cause for concern.”
America’s diesel exports have been soaring in recent months, Maynes said. U.S. diesel exports in July 2022 rose to 1.4 million barrels a day, a five-year high, according to data from oil analytics firm Vortexa compiled by Bloomberg. Europe is buying more U.S. diesel as the continent tries to wean itself from Russian energy supplies. Latin America
Friday, Aug. 26, 2022 www.farm-news.com Farm News / Fort Dodge, Iowa 3D
soar, this equates to higher prices for just about everything.
With all the demand for diesel, can’t oil refineries produce more diesel?Earlier this summer, energy analysts said there’s little likelihood that refineries in the U.S. will be able to make more diesel, especially if demand for jet fuel and gasoline rose during theForsummer.prices to go down, the economy will likely have to go through what economists call demand destruction. Demand destruction happens when the
Coping with rising prices
“Indonesiasaid. is a growing market for us and we should continue to see some growth down there,” Hart said. “I’ll be looking at Southeast Asia, Indonesia, Malaysia and Taiwan, which has always been a fairly strong market for us.”
In the Aug. 12 report, traders were expecting slightly higher
Official: Drought, demand issues impact soybean market
exports.”Globally, USDA put ending stocks for 2022-2023 at 101.4 MMT, above the range of trade expectations.“It'supnearly 2 MMT from last month and reflects higher beginning stocks (old-crop stocks) and production in the U.S. and China. USDA raised China's production by just shy of 1 MMT and said it's based on provincial reports. Ending stocks for 2021-2022 declined to 89.73, in line with trade expectations,” Kimberley said.
By KRISTIN DANLEY-GREINER Farm_News_Iowa_KSDG@msn.com
“Soybean planted area dropped 300,000 acres as some areas in the Northern Plains did not get planted,” Hart said. “However, the August farmer survey showed farmers are expecting slightly better yields, with the national soybean yield estimated at 51.9 bushels per acre, up 0.4 bushels from the July estimate. That adds 26 million bushels to production, now at 4.53 billion bushels.”
we see crop ratings over time, that the excellent ratings drop as we approach harvest,” Hart said. “The numbers didn’t move much nationally but in Iowa they moved three points in the Aug. 12
“What we’ve always found is the demand seems to always rise right up to production,” he said. “USDA increased its forecast for 2022-2023 ending stocks to 245 mb, a 15 mb increase.
Asreport.”faras demand, China has bought less soybeans in the past year, along with less pork and corn. Egypt has stepped up its purchase of soybeans while South Korea swings back and forth, Hart
“Some areas have been getting timely rains and are in great shape, so the big question is will the bad areas outweigh the good areas? The bad areas will continue to decline and growers need rain,” Kimberley said.
Chad Hart, Iowa State University Extension agriculture economy specialist, said the drought and demand issues will continue to impact the soybean market.“People are worried about shrinking supplies, but we have shrinking demand. The market has been prepared for some minor downgrading of the crop, maybe a cent or two down, which aligns with what we tend to see historically when
Crop acreage, yield and overall production for corn and soybeans both were lowered in the Aug. 12 U.S. Department of Agriculture World Agricultural Supply and Demand Estimates report and Crop Production report.
Grant Kimberley, senior director of market development for the Iowa Soybean Association and executive director of the Iowa Biodiesel Board, said growers have experienced “very
acreage and slightly lower yield but the USDA gave them the opposite, he noted.
“Soybean exports were lowered by 10 million bushels for the 2021 crop, but raised 20 million for the 2022 crop, so transferring a few sales from old crop to new crop,” he said. “For soybean season-average prices, USDA lowered both the old crop and new crop prices by 5 cents, so $13.30 for the 2021 crop and $14.35 for the 2022 crop.”
“On the demand side, USDA increased its export forecast by 20 mb to 2.155 bb. The national average farm gate price declined by a nickel to $14.35 per bushel.
On old-crop, 2021-2022 stocks, USDA increased ending stocks by 10 mb to 225 mb due to lower
Hart: 'People are worried about shrinking supplies, but we have shrinking demand'
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For the week of Aug. 8, the statewide drought monitor reported 64 percent of Iowa counties as abnormally dry and Plymouth, Woodbury, Sioux and Cherokee were listed as severe to “Iextreme.think that is something we will have to keep a close eye on over the next few weeks,” Kimberley said. “There isn’t a lot of time left to make up these rainfall deficits. If the weather doesn’t change soon, I would anticipate lower yields.”
challenging weather in parts of the state and country.”
“Many growers have a good pod set and good potential, but whether or not those pods fill out will be determined by rainfall leading up to harvest and time is runningDemandout.”looks to be “pretty solid” and next year’s demand seems to be stable.
Beth Doran, Iowa State Uni versity Extension field special ist, said many producers in her ar ea were able to squeeze in at least two“Forcuttings.some it was a late first cut ting and then a light second cut ting. In the most drought-strick en counties in my area, some had a first cutting but are planning to graze the hay ground versus make a second cutting. Some have been approved for haying and grazing of CRP. Some are making ditch hay,” Doran said. “The first cut ting was a little more mature, but a good yield. The second cutting was put up without moisture, but yield was less than average.”
Prices were higher than nor mal in Lundy-Woolfolk’s area for hay, but until recently there hasn’t been much hay trading happening.“Driving through the area, you’ll see lots of bale feeders filled in pastures as cattlemen are running out of grass. Now is a great time to inventory win ter feed needs and if short in sup ply, start looking for hay now in stead of waiting until the demand is high for hay and prices go up,” Lundy-Woolfolk said.
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Livestock producers are facing challenging times when it comes to securing affordable feed.
ISU Extension beef field spe cialist Erika Lundy-Woolfolk added that not everyone in her ar ea was able to squeeze in three cuttings. Those who did netted “pretty fair” yields for a third cut ting.“Moisture has been pretty spot ty across southwest Iowa, but the majority of hay fields haven’t seen a rain between second and third cuttings. I suspect many hay fields will not get cut a third time. When I’ve been visiting with pro ducers, we’ve discussed BMPs for grazing the hay instead of tak ing a subpar third cutting with high full prices and very poor pas ture conditions,” Lundy-Wool folkHaysaid.quality was dictated by the timing of cuttings with any rain that may have fallen.
Doran said hay prices were higher in her area this summer.
Patrick Wall, Iowa State Uni versity Extension beef special ist, said in southeast Iowa, spring growth was late so the first cutting ended up being several weeks de layed, pushing the second cutting back
tings will not happen this year unless the fall regrowth produc es enough forage to make a late third cutting a possibility,” Wall said. “The first cutting quality was fairly normal, though ton nage was down from average but with very few reports of any in sect damage in the region. The quality of the second cutting was good, but again, the tonnage was well below expected due to lack of Mostrainfall.”of northeast Iowa has had a “pretty good hay year” with three big cuttings of alfalfa hay and two good cuttings of grass hay, Schwab said.
“Duetoo.to incredibly dry weath er as of late, many third cut
“For the producers who were able to get the first cutting up in May, hay quality was pretty good.
“They’ll see higher feed costs whether it’s hay or corn. We have the same problems that we had last year and any rain we see soon won’t give our pasture ground a lot of time to improve,” Hart said.
For the past few years, Iowa’s hay ground has taken a hit from drought-like conditions across many parts of the state. Prompted by a lower demand, prices for hay have gone up, too.
through 2022, because we don’t have healthy pastures to put the animals on either, and herd siz es have gotten smaller as a reflec tion of Denisethat.”Schwab, Iowa State University Extension beef spe cialist, said rainfall has been “very inconsistent” across the state, which has led to pasture and forage growth of varying paces.
By KRISTIN DANLEY-GREINER Farm_News_Iowa_KSDG@msn.com
For many, the early rains in June delayed the first cutting, so the first cutting was very mature at harvest and therefore, below av erage quality. The majority of the area saw little to no rain between the first and second cuttings,” Lundy-Woolfolk said.
“Good quality large round bales of alfalfa and grass hay have both been higher priced than last year. I’d estimate about 6070 percent higher than in past years,” she said.
“There are places that are dry but still have had enough mois ture for pretty good hay growth,” she said. “We’ve also has some nice windows of warm temps and low humidity to get some really good quality hay put up. Pastures are a different story. Most contin uously grazed pastures across the area look poor to really poor. You can definitely see the advantage to rotational grazing systems this
“The prices are definitely high er than in the past couple of years, which I relate back to the drought, which is an extension of the drought from last year and that’s an extension of the drought from 2020. We’re seeing signif icant problems across the Corn Belt and Great Plains, especial ly in Kansas and Nebraska,” said Iowa State University Extension market specialist Chad Hart.
“So the drought is pulling down corn yields. That cut production by 146 million bushels to 14.38 billion bushels. Corn usage adjustments were mostly negative by 2021 crop ethanol use cut 25 million bushels, 2022 crop feed use and exports cut 25 million each. The only positive news on corn usage was in sweeteners, which was up 5 million bushels for both the 2021 and 2022 crops. Corn season-average price estimates remain the same: $5.95 for the 2021 crop and $6.65 for the 2022 crop,” HartHartsaid.explained that even if the drought monitor, which is updated weekly, shows
Corn market fluctuating based on demand, drought
like to say to leave the upside open.”
The U.S. Department of Agriculture released its World Agricultural Supply and Demand Estimates report along with its Crop Production report Aug. 12 that ultimately lowered crop acreage, yield and overall production for corn and soybeans.
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Iowa Corn Growers Association President Lance Lillibridge, who farms in Benton County, said the Aug. 12 USDA report brought the market up a bit and he remains optimistic that producers will see higher prices heading into the fall.
-Farm News file photo
Chad Hart, Iowa State University Extension agriculture economy specialist, noted that the USDA lowered the national corn yield to 175.4 bushels per acre, which falls 1.6 bushels below the July estimate and 0.5 bushels below the trade average.
Aside from the drought impacting the market are concerns about supply and demand.“People are worried about shrinking supplies, but we have shrinking demand. Domestically we know how demand will shake down in the U.S. but how much is China going to buy and how many additional sales will happen in the Middle East and North Africa. We have to figure out how much new crop is going to come out of there and offset any potential sales there. If you look at where the markets have been moving, the market is more concerned with demand than drought,” Hart said.
“Iowa is sort of split in two. The northwest corner is really bad and the southeast corner is really bad, but the center part of the state has received just enough rain to keep it away from significant problems. The Western Corn Belt in general is where we’re really worried,” Hart said. “We’re seeing some of those drier conditions working their way up the Mississippi Valley.”
International demand hasn’t been holding up as well as everyone had hoped,
Lillibridge said he believes stronger prices will emerge this fall as crop conditions around the world solidify.
“China has bought less corn and beans. They’ve cut across the board in areas where we've seen growth over the past year. Canada and Mexico are experiencing drought issues, too. Places like the Middle East source lots of grain from Ukraine and Russia, and there’s less coming out of that part of the world, too. If we could gain a little more market share, that would go a long ways toward helping the market move forward,” Hart said.
that drought conditions have lessened in a particular area, the damage may have already been done to the crop.
“If you look at the inverse between cash corn now and the fall, prices are starting to come up,” he said. “That tells us we need to get rid of our bushels and start selling corn. Every operation is different, but every farmer needs to look at cash flow needs and plans for next year’s crop, along with input prices, and start locking in things. I always
By KRISTIN DANLEY-GREINER Farm_News_Iowa_KSDG@msn.com
HartHesaid.said he’ll be watching Southeast Asia, Indonesia, Malaysia and Taiwan, as those areas hold promise.
“Once combines start rolling, we will know the truth,” he said.
Hart said ag prices came down significantly from mid-June throughout July, and he attributes that to overall crops looking good, considering the dry weather conditions.“Whenwe look at the National Crop Ratings for corn and soybeans, they are holding up like they did last year,” he said, adding that last year’s crop came in at 177 bu/acre for corn and 51 bu/acre for soybeans. “Those were pretty good crops.”
RENEWABLE ENERGY Hart said the future of the bio renewable energy industry is tied to the development of carbon markets.“That has been one of the major reasons why we’ve been investing in renewable energy, because we’re trying to reduce our carbon footprint or avoid concerns about carbon emissions and what it might mean for our planet,” said Hart.
“We’ve seen a lot of interest
brought U.S. prices down to where they were at the beginning of 2022.
“We’ve seen some wild swings, but looking forward — we’re a little worried that we could see some crop problems starting up, so that could bring some of that weather premium back,” he said, adding that early-August dry 100-degree temperatures in the Midwest could contribute.
— farmers are trying to figure out what options are right for them, a lot of companies offering them and a lot of potential contracts out there. But what’s missing is a formal market structure,” he said.
Hart said some of the troubles with the carbon market is that it’s a commodity that a person can’t seek, feel or pick up like they can with grain commodities. He said innovators are still trying to figure out a precise way to measure it.
Grain and livestock producers have been presented with wild swings in the grain markets during the summer of 2022, along with new opportunities in the areas of carbons and renewable energy as 2022Theprogressed.wordsofthe day are, “Do your homework,” and “Keep a calm head,” according to Chad Hart, extension economist and crop and marketing specialist for Iowa State University.
He said the government needs to be part of that gathering of information and set-up, because it means more stability for the commodity. But farmers need to get involved in it.
“There are a lot of ways to gain a carbon credit, but only one
way to grow corn,” said Hart, illustrating the work that needs to be done yet on the carbon market industry.Carbon credits can be created by using no-till, planting cover crops, planting trees, continuing to allow trees to grow on a tree area planted years ago — even driving less often than previously, for“Thoseexample.things make it harder to define that market,” he said. “There are only three words when it comes to this market, and they are 'do your homework.’”
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Hart said today’s producers are in the “Wild West of carbon.”
ChadHart
Hart said for those who do their homework, there are some true opportunities in the carbon market, but he thinks it will be some time before the carbon
By KAREN SCHWALLER kschwaller@evertek.net
of the Black Sea region (Ukraine), when predictions did not call for that after the war began last whichandtheconcernedhaveFebruary.Investorsalsobeenoverriskofinflationrecession,Hartsaidalso
Hart said even if prices climb upward, that they would probably not reach the high seen last May and into late June.
Hart said the carbon market is new enough that it’s difficult to compare it to other commodities that have been established — where producers understand what that commodity is, how it is grown and traded and what it represents. The carbon market is still being set up, so producers need to do their homework to make sure they understand what they are “getting into,” so to speak.
guidelines become established so producers can have a measuring stick, or at least know what those guidelines or prices for carbon credits mean to their operation.
Hart to producers: 'Do your homework'
Hart said international demand concerns have dropped prices somewhat because of news that there may be grain coming out
“Now is a great time to do your homework because you can help influence what those guiderails are (and define the industry), rather than wait for the market and then complain that it doesn’t fit into what they’re doing,” Hart said. “Rather than playing by somebody else’s rules, you would be helping set those rules to help drive that market to make sure agriculture is fairly represented within that market.”
“They need to understand if it would be best to sign up for a year, or two or 10 years; how long the contract is, what they’re being paid for, and what costs they will incur for chasing that carbon opportunity,” he said. “Those are questions that we as analysts can’t answer because every company and every situation is different.”
See MARKETS, Page 8D
He said there has been much
CARBON
LOOKING AHEAD
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much of May and June for putting up hay and we had some spotty ar eas that were dry but nothing ex treme yet through that early part of summer.”Therehave been some spotty rains but there is a band across southeast and south-central Iowa that is get ting very dry and that has been slow ly and gradually worsening since probably mid-July or so,” he said. “I haven’t worked with many produc ers directly this summer about hay production, but I imagine the second cutting was OK, probably pretty av erage in terms of yield and quality. But grass is pretty well burnt up now across a good portion of south-cen tral Iowa, and cool season grasses are pretty well dormant.”
He said producers planted more soybeans this year than last year in light of this renewable diesel industry and the role it could play in driving soybean prices up. Still, there were not as many soybeans planted as was predicted by the USDA, which also has affected the soybean market.
interest diesel, which he described as “bio steroids.” He said soybean oils can be processed in the same manner in which crude oil is processed, and the end product is diesel fuel that does not have to be blended with“Itpetroleum.willwork the same as petroleum,” said Hart. “That process makes it highly attractive, especially in northern areas because it doesn’t gel up like petroleum-based diesel. It also has a low carbon footprint, which makes it very attractive in places like California, where they have strong low-carbon fuel standards. Renewable diesel fits the bill.”
“Companiesrange.like Philips 66, Chevron and Marathon are all investing in these renewable diesel opportunities because they see that as a win-win to stay competitive within the energy
Hay Continued from Page 5D
Hart said producers should ride out the markets with cool heads, and said he hopes producers “made some moves” earlier in the summer with both old and new crops, but especially with the new crop of corn and “Seasonallysoybeans.this is usually a low spot in terms of price, so relax and don’t panic. As we look forward and we get some weather problems or we see demand continue to remain strong, we’ll likely get a rebound — especially as we get past harvest,” said Hart.
Schwab said a visual evaluation of fields without forage testing the 2022 hay would lead to a “good” quality rating from her.
He advised producers to plan for storage and length of storage, pricing opportunities for hedging; possibly using call options so if prices go up the producer gets rewarded for it; or a minimum price contract, which also gives upside potential if prices go up.
ISU Extension beef field special ist Christopher Clark said the wet and cold early spring meant produc ers in his area of south-central Io wa ended up starting planting later than“Oneusual.challenge associated with a slow start to spring field work is that first cutting of hay is sometimes delayed and a bit more mature than you’d like,” Clark said. “More ma ture means lesser quality in terms of protein and energy levels. I think weather was relatively good through
diesel on
markets and they’re able to fit in along with these big carbon opportunities,” Hart said. “It’s a strong pull now on the soybean market because we’re seeing a lot of soybeans being redirected now to create fuel.”
Markets
Hart said much investment has happened in the renewable diesel industry in the last two years across the country, with oil prices up and down from $100/barrel
The high cost of fertilizer this past spring, strong export demand for soybeans and the renewable diesel push combined to create those expanded soybean acres.
“Prices are still pretty good, so you want to put a floor underneath them,” Hart said, “but still give yourself upside potential if grain prices do go higher.”
Continued from Page 7D
year, since they are about the only green pastures you’ll see.”
“As we look at the ag market, we don’t necessarily need to be a step ahead, but we need to at least be anticipating what the next step will be,” Hart said in terms of where the focus needs to be as agriculture moves forward.
in renewable
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