Leaving a Rough Road Behind

By Mike Bryan | January 03, 2009
Whew! 2008 is finally behind us. It was a tough year for the ethanol industry. The squeeze of falling oil and ethanol prices, combined with commodity hedging, spelled trouble for many and disaster for some.

There is hardly a segment of the industry that hasn't been affected. The build-out of corn-to-ethanol plants, high grain prices, project financing virtually impossible to obtain and the collapse of major banks all came together to create what some have described as "the perfect storm."

Looking forward, we can only speculate that intervention by the government to bail out banks and automakers will help strengthen the economy. This, combined with a new administration that seems to have a strong bent toward renewable energy, could help turn the ethanol industry around in 2009.

Some of the issues that plagued us during 2008, such as the food-versus-fuel debate and unnaturally high grain prices, may be behind us. This isn't to say that 2009 will be a cakewalk. In fact, it may take much of the first half of the year just to recover from 2008, but recover we will, and the industry will be stronger as a result.

Once again, the partnership with American agriculture has proven its worth during this difficult time. As we have seen in the past, the plants that have a strong connection with farmers seem to be better able to withstand unpredictable market fluctuations. The fact is, agriculture remains the backbone of the ethanol industry. It's puzzling that many believe second-generation ethanol will be largely built by big businesses, not farmers. If history is any predictor of the future, not having the direct involvement of agriculture may be a fatally flawed path forward.

Farmers need to be involved in building the next generation of ethanol plants. We should still be forming farmer-owned cooperatives. Time and time again, we have seen that these boards can provide the kind of intelligent and careful guidance that is needed to make plants successful during a wide variety of market conditions.

Somehow, we have gotten the idea that farmers are done building ethanol plants because many of the future plants may not be corn-based. In my opinion, that's a pretty lame notion. Not only should farmers be involved in next-generation ethanol production, but I believe in order for the industry to really prosper, it's imperative that they're involved.

This doesn't mean every cellulosic ethanol plant has to be farmer-owned, but there ought to be a whole lot of them that are. My message to American agriculture is simple: "You built this industry. Don't stop now. Take it to the next generation."

That's the way I see it!

Mike Bryan
Publisher & CEO
mbryan@bbibiofuels.com