By MICHELE F. MIHALJEVICH
Indiana Correspondent

BLUFFTON, Ind. — Growth in the agriculture industry because of ethanol is sustainable, a Purdue University ag economist said last week.

“The story is really quite positive,” said Mike Boehlje. “Once plants are built, we don’t see them going offline.”

Boehlje spoke July 24 during a demonstration day at the Syn-genta Learning Center near Bluffton. The learning center is one of 12 Syngenta has nationwide. Organizers expected more than 500 people to attend the July 24 and July 26 sessions.

“One of the big questions producers have is the question of sustainability,” Boehlje said. “They want to know if there is a potential for decline in demand, if the increased demand for corn is tied to increased ethanol production.”

Farmers are also concerned about how land values, cash rents and other costs are affected by ethanol production, he said. In Indiana in 2007, land values are up more than 16 percent, and cash rent prices are up more than nine percent, Boehlje reported.

Construction of new ethanol plants has slowed a little from last year, when construction skyrocketed, he said.

“There was a concern in the past, that if all the plants that were planned were built, we’d use 130 percent of our available corn crop,” Boehlje said. “But we aren’t going to build all those plants.”
One challenge to the ethanol industry is what to do with dried distillers grains (DDGs), a byproduct of the ethanol production process, he said. DDGs may be used in feed for dairy, beef, pork and poultry.

“You have to ship by rail, but many companies don’t want to ship it,” he said. “It needs to get where it can best be used. We know how to ship corn, but we don’t know how to ship DDGs well.”
The ethanol industry is vulnerable to lower energy prices and higher corn prices, Boehlje said.

Higher food prices, and the perception those increases are due to ethanol, is also a concern.

“The food-fuel debate has not been a big problem here,” he said. “But some will question if the increased cost of beef and pork is due to more corn going to ethanol, therefore increasing the cost of food.

“Starbucks recently raised its prices, but they blamed energy and transportation costs,” he said. “They aren’t putting the blame on ethanol.”

The learning centers and their demonstration days provide hands-on experience and information from trials that test for various soil types, pests and weather conditions, organizers said. Visitors were introduced to a process which puts an alpha amylase enzyme into high-yielding corn hybrids. The enzyme – necessary in the production of ethanol – turns the corn’s starch into sugar.

“There is a bacteria that produces the enzyme, and we’ve taken the gene out of that and put it in the corn plant,” said Jim Graeber, enhanced grains market development manager for Syngenta. “This takes a step out of the production process because the enzyme is already in the corn. It saves money and is more efficient. The advantages of amylase is the simplicity of delivery and the processing flexibility. This would lead to a faster, more efficient and more profitable ethanol plant.”

The corn amylase enzyme was developed by Diversa. It is awaiting FDA approval, and that is expected this year or next, Graeber said. Applicants are seeking approval for food and feed uses, as well as for ethanol, he said.

This farm news was published in the Aug. 1, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.