Biofuels a growing part of Ohio agriculture

Source: By Patrick A. Cooley, Columbus Post Dispatch • Posted: Sunday, December 18, 2022

The POET Ethanol Plant in Fostoria converts corn into ethanol.

Paul Herringshaw watched the price of corn improve dramatically when the POET Bioprocessing facility opened in 2008 in Fostoria, a short drive from his Wood County farm.

The ethanol plant, one of three in Ohio operated by the South Dakota firm called POET, buys corn from local farmers to convert into biofuel, giving Herringshaw and other farmers in the region a price boost and a guaranteed market for their corn.

“The price of corn at one time was a dollar over the Chicago Board of Trade,” Herringshaw said. “Traditionally we’ve been under them.”

Since the late 2000s, the money he’s made selling corn to POET let him invest in his 2,300-acre farm near Bowling Green and convinced his son, who worked a corporate job for John Deere, to consider coming home to take over the farm when Herringshaw retires.

The ethanol plant “made it profitable enough that made my son wanted to look at coming back,” he said.

Ohio farmers such as Herringshaw are more reliant than ever on biofuels for income to help offset the spiking cost of everything from fertilizer to farmland.

A growing share of the state’s soybeans and corn is turned into biodiesel or ethanol, boosting the prices of those commodities and helping keep farmers solvent through the inflation surge of the past 20 months, say experts.

“Farmers as a whole have appreciated the increase,” said Cindy Layman, who grows corn and soybeans on 5,500 acres in Hardin County and sits on the Ohio Soybean Council. “We are still holding at a profitable level” even as prices rise.

But trouble may be on the horizon for farmers as electric vehicles reduce the demand for fuel, experts note.

“If something were to happen to ethanol, it would be a very bad day for corn farmers,” said Tadd Nicholson, executive director of the Ohio Corn and Wheat Growers Association.

Biodiesel ‘beginning to pick up steam’

Around 40% of Ohio’s corn eventually becomes ethanol, according to the Corn and Wheat Growers Association. That share has gradually increased since 2005, when a renewable fuel standard was signed into law encouraging the use of biofuels like ethanol.

“The demand is pretty sensitive to volume obligations set by the government, which changes year by year,” said Seungki Lee, an agricultural economist at Ohio State University’s Department of Agricultural, Environmental, and Development Economics.

Today, virtually all gasoline sold in the United States is at least 10% ethanol, thanks to the renewable fuel standard, and 15% ethanol blend unleaded 88 first appeared at Ohio gas stations in 2021, largely driven by the Sheetz chain.

“The renewable fuel standard was built in a way that would gradually increase the amount of ethanol required to be used in the fuel mix,” Nicholson explained.

Roughly 30% of the nation’s soybean oil is turned into biodiesel, about double the amount from a decade ago, according to the U.S. Energy Information Administration. Agriculture officials expect more soybeans will be used for biodiesel in the coming years as trucking companies and airlines look to decarbonize.

“The movement to biodiesel is beginning to pick up steam,” said Brent Sohngen, a professor in environmental and natural resource economics at Ohio State University.

Biofuels expand outlets for farmers

Much of the state’s crops are not used for human consumption. Most corn, for example, goes to ethanol plants or becomes livestock feed. Sweet corn, the kind you eat from the cob, makes up less than a fifth of the state’s crop.

Soybeans, likewise, are processed into oil and meal, Layman said. “Meal is primarily used for livestock feed, whether it be hogs cattle, chickens, or chickens.”

The oil can be used for cooking or can be refined into biodiesel, she said.

Farmers are quick to play up the perks of biofuels, such as lower carbon emissions.

But ethanol has other benefits for Ohioans, as many of the crops grown for biofuels in Ohio are processed and converted in the Buckeye State.

Ohio has seven ethanol plants (in Leipsic, Marion, Fostoria, Greenville, Bloomingburg, Coshocton, and Lima) which largely use corn from Ohio growers, said Nicholson.

POET’s Fostoria plant uses about 24 million bushels of locally-grown corn to produce 68 million gallons of ethanol each year. Semi-trucks haul corn into the sprawling industrial facility from the fields just minutes away.

The corn is crushed into a fine powder and converted into several commodities there, including fuel.

Experts only expect the demand for biodiesel to grow.

“This is a promising market based on the national trend,” Lee said.

An uncertain future

The era of the electric car is still decades away, but a renewable energy and health care bill that passed Congress in the summer created incentives for electric vehicle manufacturers and dedicated money to charging infrastructure, raising concerns among agriculture experts about the future of ethanol.

“I don’t think anybody in the corn belt should be buying land right now” despite rising property values, said Kevin Egan, a professor of environmental and natural resource economics at the University of Toledo. “There is a huge disruption coming in the next 10 years.”

Biodiesel is somewhat different. The sheer size of electric batteries capable of powering large vehicles makes electric trucks and planes impractical, meaning the trucking and airline industries need to find other ways to reduce their considerable carbon emissions.

Diesel made from soybeans is one alternative. But unlike corn/ethanol plants, Ohio has no facilities to convert soybeans into fuel.

“We’re still hamstrung by the fact that we don’t have any processing plants,” Layman said.