VIEWPOINT | Why survive when South Dakota farmers can thrive?

Guest column by Walt Bones, former S.D. secretary of agriculture

Just survive, or thrive?

If you were given that choice, what would you choose?  

On the farm, we’re faced with that decision daily. Do we purchase enough fertilizer to raise a breakeven yield of 170 bushels per acre, or do we spend more money with the hope of normal rains that will give us 200-bushel yields? The breakeven yield will pay our bills, and we will survive to farm another year, but the 200-bushel yield will allow us to have a profit that we can reinvest into making our families more comfortable, our farms more efficient through machinery and facility upgrades, or maybe even have some left over to take a vacation.   

As farmers, we have no choice but to roll with the punches. We have to adjust to each challenging situation we face and find a way to make it work. And, if you’re looking, perceived challenges can actually present opportunities.

Given the current realities in a world marketplace where corn supplies are growing, prices are dropping and exports are shrinking because the United States is no longer the number one exporter of corn – what options do we have? Economics 101 teaches us that to raise prices above breakeven costs, we need to lower supplies or increase demand.  Why not solidify our domestic fuel market by answering the call for low carbon fuels? I don’t think it matters if you believe rising carbon dioxide levels are impacting our environment or not. Consumers and businesses are demanding low carbon fuels and willing to pay well for them.  

So, do our farmer-owned ethanol plants operate to survive or to thrive? And how do we choose? An example: two gallons of ethanol, from the same bushel of corn, with the exact same chemical analysis would be worth the exact same. But if the carbon was sequestered from one of those gallons, it would lower that gallon’s carbon score by 30 points and raise its value by 27 percent — from $1.32 to $1.68. That’s 36 cents more per gallon times three gallons per bushel of corn, times 500 million bushels of corn processed by South Dakota ethanol plants. Every bushel of corn in every farmer’s field will be worth more. That farmer, as we all know, will turn around and support the communities and businesses that they serve and surround.

We can ensure our ag economy can capitalize on these opportunities by removing the carbon from our biofuels. However, the only way we can realistically accomplish this is through carbon sequestration, which requires the construction of CO2 pipelines to transport the carbon dioxide generated during the biofuel production process and store it in a safe place, deep underground and out of state. Is it any wonder that over 50 ethanol plants that have farmer ownership in western Iowa, South Dakota, western Minnesota, eastern Nebraska and eastern North Dakota have signed on?  Believe me, they have all looked to find other viable options and there are none.