Ohio Ethanol Outlook Ohio Corn Growers Association Tadd Nicholson

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Ohio Ethanol Outlook Ohio Corn Growers
AssociationTadd Nicholson
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Ohio Corn has Been Working on Ethanol for 20
years.
The 10 blend (E10) has been around since the
30s Now the 85 blend (E85) has gained momentum
April 1933 Lincoln Nebraska gas station of the
Earl Coryell Co. "Corn Alcohol Gasoline."
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Drag Race to Production
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U.S. Ethanol Industry Today

• Record Growth Continues
• 2008 continues the record growth trend that has
  defined the U.S. ethanol industry over the past
  several years. For the year, 162 ethanol plants
  located in 24 states produced a record 9.4
  billion gallons. (58 mil. gal ave.)
• Today - 48 plants are under construction or
  expansion, representing an additional 4.2 billion
  gallons of production capacity. (87 mil. gal ave.)

9.4 Bil. Gals. 4.2 Bil. Gals. ---------------
13.6 Bil. Gals
Total
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Blend Wall

• US E10 blending will max out at 10-12 bil. gals.
• Remember the numbers
• 9.4 bill current production
• 4.2 bill. Under construction
• 13.6 bill. gal. production
• Everyone is talking higher numbers than this
• Corn to Ethanol 15 Billion capacity
• Energy Bill 36 Billion AFS (by 2022)
• 31 of which is ethanol
• (15 billion corn ethanol and 16 billion
  cellulosic)

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How the puzzle is coming together
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U.S. Ethanol Plants
AS OF August 2007
In operation (123) 6.39 bgy
Construction (81) 6.48 bgy
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Ethanol Dry Milling Process
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Ohio Ethanol Plants (as of 7-28-08)
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
POET Fostoria Fostoria, Ohio Seneca Co. 65
Million Gal./yr. 130 million investment 20
Million bushels of corn/yr Expected Opening
September 2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
POET Marion Marion, Ohio Marion Co. 60 Million
Gal./yr. 130 million investment 20 Million
bushels of corn/yr Expected Opening October 2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
POET Leipsic Leipsic, Ohio Putnam Co. 60
Million Gal./yr. 130 million investment 20
Million bushels of corn/yr Opened January 10,
2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
Greater Ohio Ethanol Lima, Ohio Allen Co. 54
Million Gal./yr. 90 million investment 19
Million bushels of corn/yr Opened March 2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
Andersons/Marathon Ethanol Greenville, Ohio
Darke Co. 110 Million Gal./yr. 160 million
investment 40 Million bushels of corn/yr Opened
February 2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
VeraSun Energy Corp. Bloomingburg, Ohio
Fayette Co. 110 Million Gal./yr. 107 million
investment 40 Million bushels of corn/yr Opened
March 2008
Under Construction
Seeking Permits -not under construction
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Ohio Ethanol Plants (as of 6-8-07)
Coshocton Ethanol 60 Million Gal./yr. 80
million investment 21 Million bushels of
corn/yr Opened March 2008
Under Construction
Proposed
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Ohio Ethanol Plants (as of 6-8-07)
Harrison Ethanol Cadiz, Ohio Harrison Co. 15
Million Gal./yr. 63 million investment 5.5
Million bushels of corn/yr
Under Construction
Proposed
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The Goal
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• Questions?

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Can we grow enough corn? Yield Trend
BiotechnologyAre food prices going to
skyrocket because of ethanol? 1.00
Corn UsageDoesnt ethanol take too much
water?I heard ethanol takes more energy to
produce than it generates. Energy
balanceEthanol subsidies are unfair.
What questions have you heard?
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Is ethanol driving up the price of food?
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One Bushel of Corn
AND
OR
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1 WORTH OF FOOD LAST YEAR WILL COST 1.05 THIS
YEAR. WHAT CAUSED THAT NICKEL INCREASE?
2.2 cents for energy costs 44 of increase
.95 cent for labor costs 19 of increase
0.4 cent for other marketing costs 8 of increase
1.25 cents for farm commodities 25 of increase
0.2 cent for ethanol impact on grains 4 of
increase
SOURCES AMERICAN FARM BUREAU, INFORMA
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Ethanol and Water
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How Much Water?

• 3 gallons are required per gallon of corn
  ethanol 6 gallons are required per gallon of
  cellulosic ethanol
• Typical ethanol plant (60 MGY) uses about 180
  million gallons of water per year
• Equivalent to the annual water required for a
  standard-size golf course

Sources RFA/NREL/Media
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Water Use in Production

• 62,600 gallons to produce a ton of steel
• 39,090 gallons are needed to manufacture a new
  car, including tires
• 28,100 gallons to process a ton of beet sugar to
  make processed sugar
• 1,500 gallons to process a barrel of beer

Source USGS/USEPA
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More Perspective

• The average home uses 107,000 gallons of water
  per year
• 24 gallons of water needed to produce one pound
  of plastic
• 101 gallons of water needed to produce one pound
  of cotton
• 300 million gallons are needed to produce a
  single days supply of U.S. newsprint
• 150 gallons to produce the average size Sunday
  newspaper

Source USGS/USEPA
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Water and Oil Refining

• USGS estimates 1,851 gallons of water are
  required to extract, transport and refine a
  barrel of oil (lifecycle)
• Gasoline is 51.4 of the barrel so water for
  gasoline is 951 gallons.
• At 19.5 gals. of gasoline/barrel
• It takes 49 gals of water per gallon of gasoline.
• (3 for ethanol)

SourcesU.S. Geological Survey, Gibson
Consulting, California Energy Commission
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Much Water is Recycled

• In most cases, an ethanol plants process water
  is not discharged from the facility. Most of the
  water is recycled and reused by the boilers
• Any water discharged from a plant is treated and
  recycled for use elsewhere
• Water may also leave the plant as a component of
  the plants coproduct, distillers wet grains,
  which are fed to beef and dairy cows

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The increased price of Corn is something to be
celebrated.

• Then Cost of production 2.50/bushel
• Farmers received 2.00/bushel
• -0.50/bushel
• Now Cost of production 4.25/bushel
• Farmers receive 5.75/bushel
• 1.50/bushel

Its a profitable business!
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E20 Passes a big test

• The new research concludes that today's cars and
  trucks, with no modifications, could just as
  easily be using gas that contains a 20 percent
  blend of ethanol (E20). It would present no
  problems for current vehicles or fuel dispensing
  equipment while providing similar power and
  performance, according to the study.

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Ethanol Pipeline

• The most recent announcement came from Magellan
  Midstream Partners LP and Buckeye Partners LP.
  Their proposed pipeline project would span nearly
  1,700 miles and supply more than 10 million
  gallons of ethanol per day from the Midwest to
  distribution terminals in the northeast.

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The Fed Dont Blame Grain

• Non-farm costs have taken up more of the retail
  food dollar
• 59 in 1959 to 80 today, due primarily to rising
  labor and energy costs

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Energys Bigger Impact

• A 1 per gallon increase in the price of gas has
  twice the impact on food prices as does a 1 per
  bushel increase in the price of corn

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Texas AM Dont Blame Grain

• Higher corn prices have had very little effect on
  consumer food prices
• The underlying force driving economic change is
  higher energy prices

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Thanks to Biofuels

• A gallon of gasoline costs 15 less, reducing
  the per-gallon price by 50 cents.
• Americans use 390.2 million gallons a day, or
  142.4 billion gallons a year.
• Americans are therefore saving 71.1 billion each
  year at the gas pump.

Sources Merrill Lynch head of commodities
research Francisco Blanch, Wall Street Journal,
March 24, 2008 Assuming 3.36 average U.S.
pump price per U.S. Department of Energy (April
2008) and DOEs estimated 2007 U.S. gasoline
consumption.
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What Is Driving Food Prices?
US Dept of Labor data Unadjusted percent change
to March 2008 from March 2007 Food               
                             4.5 Food at home
(cereals, meats, fruits, etc.)    
4.7 Transportation                             
8.2 Fuel oil                                     
   40.2 Motor fuel                              
      26.4
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Ethanols Impact on Household Gasoline and Food
Spending in 2007
4 of Food Inflation Increase due to Higher
Grain Prices (Informa)
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Minor Impact on Retail Food Price


Source USDA,NCGA Based on corn value of
4/bushel. USDA choice boneless sirloin steak.
Feb. 08
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National Corn Growers Assn. web based interactive
learning modules
Insect Resistance Management
Compliance Assurance Program
Overview of Resistance
Integrated Pest Management
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Weed Resistance
WRM and the Environment
Agronomic Factors
WRM and the Grower
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How Much Effect Can Corn Have On The Price Of
Food?
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Mark Thomas Racing

• Marks video

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Corn Yield Trends Are Accelerating
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Transgenic Field Trials, by Crop Field Trials,
by crop (Average 2004 2005)

• PIPELINE TRAITS OCGA MEMBERS ARE EXCITED ABOUT
• Drought Tolerance
• Nitrogen Utilization
• Yield Enhancement
• Ethanol Specific Traits
• In-Seed Enzyme
• Ferm. Enhancement
• DDG Feed Enhancement

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Ethanol produces more energy than it takes to
make itperiod?
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Energy Bill Outlook
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