Commodity Chain of Corn to Ethanol

 The commodity exchange begins with the sale of corn seed to farmers throughout the region. The corn exchange begins with the sale of seed to farmers for planting. In north central Ohio a cooperative group (Sunrise Co-op) is the primary seller of seed to local farmers. One of the four Sunrise locations for corn seed is in Crestline Ohio. Steve Niese is the location manager of this site, and was the general contact for all information gathered. Sunrise seed obtains seed from several growers in the Midwest region and beyond. The seed is transported to Crestline Ohio and three other holding sites prior to distribution.

 Storage of the seed requires significant space. Sunrise seed in Crestline has the ability to store 16,000 units of seed. A unit of seed according to Steve Niese is roughly 80,000 seeds. Therefore max storage capacity for the Crestline location is 1,280,000,000 seeds.Storage is placed in a large warehouse located at the Crestline facility.  Currently 40 employees work at the Crestline location for Sunrise. Their hours of operation are Monday through Friday 7am to 5 pm with hours fluctuating during planting season.

 Working conditions within Sunrise vary dependent upon job title. Certain individuals work solely on the computer in an office utilizing satellite imagery to determine appropriate seed distribution on land for buyers. Other individuals manage the warehouse were the seed is stored. Lastly certain individuals are responsible for transport of the seed performed through Freight trucks.

 Price of seed is sold in unit format. Currently the rate of one unit of corn is variable dependent upon type. A mean price per unit is reported by Mr. Niese at $260.00. Mr. Niese reports that this price fluctuates depending on which seed is ordered, market price for corn, and amount of units ordered at one time. There are several types of seed each with different genetic traits. One of Sunrise co-op’s largest selling seed is the Mycogen seed, which is purchased by Schroeder’s Grain Farm located within ten miles from the Crestline location in Shelby Ohio.

 

Planting the Corn Seed

In the Spring Farmers in Ohio begin preparation for the planting season. Dependent on the weather throughout late Winter and early Spring, determines the date when Farmers can effectively plant the corn seed. Located only a few miles from Sunrise, in Shelby Ohio, is Schroeder’s Grain Farm. Schroeder’s grain farm is a family operated farm that has been in the Schroeder family for three generations. John Schroeder and his son Anthony Schroeder, manage the operations and were the contact for all information received regarding their facility. They are currently planning to plant 12,000 acres of a mixture of corn and soybeans. 

Farmers typically rotate their crops to preserve specific nutrients in the soil. This mean that one year majority of the acreage will be planted to Soybeans and the following year the majority will be corn. However Anthony Schroeder reports this also prevents specific weeds and unwanted foliage from destroying the crop, this was also verified through and Article found in Weed Science issue 50. According to (3) “Crop Rotation affect seedbanks because weed control measures change with successive crops. Weeds that survive and produce seeds in one crop contribute to the seedbank from which weed seedlings are recruited in successive crops” (3). In much the same way genetic modification occurs with seeds altered intentionally, the process can occur naturally, producing weeds tolerant of conditions devised to eliminate them. By rotating crops yields are higher with a lesser demand for fertilizer. This year the Schroeder’s are planting a majority of acreage to corn seed. 

Dependent on precipitation received, and land forms that will be farmed, determinations are made regarding the pre-planting work required prior to planting the corn seed. Tilling of the land to mix nutrients in the soil is required in areas where nutrients may be insufficient, or excess precipitation has caused erosion. Prior to planting, employees at Schroeder’s Grain Farm walk the fields followed by Gator’s (ATV with a Trailer Bed) picking up large rocks in the field to prevent damage to the planters. During planting season roughly twenty employees are required. During the planting season hours for the employees are long with most employees working 12-14 hour days.

Currently Schroeder’s Grain farm utilizes all John Deere equipment for their farm. Therefore the planters they utilize are manufactured by John Deere. The planters have the capability to plant 200 acres of corn without refilling the seed. Schroeder’s utilizes five planters to plant all of the seed for the 12,000 acres. Each planter places 32,000 seeds per acre. Placing each seed in the ground between 1 and 1.5 inches in depth below the soil. The number of seed per acre can vary dependent on the abundance of required nutrients in the soil, or the susceptibility of the area to collect water.

Upon running low on seed for the planters, a call is placed by Anthony or John Schroeder to Sunrise seed company to obtain more seed. When this call is placed the Planters are driven to Sunrise to fill up the seed. By sending the planters to sunrise to obtain the seed, the amount of seed obtained will be the exact amount needed to complete the planting. This eliminates additional transportation required by both sunrise and Schroeder’s, eliminating additional expense for unnecessary seed, and potential damage to the seed through unnecessary transportation. With weather cooperating (minimal precipitation) , the planting can be completed in six and a half days.

 

Harvest

 In the summer months corn is pretty much left be aside from occasional spraying of nitrogen and Land care. Typically four months following planting, the corn is ready for Harvest. Harvest has a variable start date dependent on the type of seed, precipitation received throughout the summer, and quality of the soil. Harvest usually begins in the fall and is an entirely differing process for grain farmers, requiring separate equipment and additional hours. Only when the corn plant dies and the kernel has completely matured may the harvest begin.

Schroeder’s grain farm brings in extra part time help for the harvest. Typically 25-30 employees are utilized in all. The hours vary dependent on position, however, a typical work shift is 12-16 hour days during the harvest. Jobs duties range from equipment operators, semi-truck drivers, and dryer and storage operators. Work environment is variable dependent on job duties, although, every employee is brought two home cooked meals a day by John Schroeder’s wife throughout the Harvest.

 

Buggy and combine in action during a harvest( www.machinehead.com)

Two separate pieces of equipment are utilized during the Harvest. The first piece of equipment is called a combine and removes the corn from the stalk and kernel, the corn is the exited out of the combine through a shoot out the side of the combine. Collecting the corn being evacuated by the combine is a tractor with what is known as a buggy attached to it for storage of the seed. After the buggy is filled it is driven to the side of the road, where semi-truck await filling for transport back to the Schroeder farm. Typical yields are 180-200 units per acre. Once the semi-trucks arrive back to the farm they are weighed to determine the amount of grain collected. This amount is what is known as the yield.

After being weighed the corn is then ran through a drying system, which utilize natural gas to heat and dry the corn. The dryer can effectively dry 4700 units of corn per hour  The corn must be dried prior to being stored as damp corn will cause bacteria and other fungus to develop that will destroy the corn. After drying the corn it is stored in what is called a grain bin that will hold the corn.  The Schroeder’s have three large Grain bins and are capable of storing 1.6 million units until they are sold. In a social aspect the price of the grain they have stored for sale fluctuates.

Sale of Corn From Farmer to Ethanol Plant

John Schroeder reports grain fluctuates according to the market. Market price is determined by the Chicago Board of trade. Dependent on the country’s ability to produce corn, and the import and export of corn, a price is determined called the market price. Currently corn is $3.77 per bushel, a bushel is compared to a laundry basket full of corn weighing 56 pounds when the corn is shelled(7). Also impacting the price of corn is government regulations involving fuel and the use of Ethanol. Certain portions of the Schroeder’s grain stores are sold to POET Bio refining in Marion Ohio, where Ethanol production begins.

“POET Biorefining – Marion began operations October 24, 2008. The state-of-the art ethanol production facility will consume approximately 24 million bushels of locally-grown corn to produce 68 million gallons of ethanol annually” (7).

Image below is an overhead image Of the biorefining facility in Marion Ohio (7).

 

The refining process produces an environmentally friendly fuel, ethanol, and also takes all of the good nutrients out and puts them back into a high quality feed for farmers to feed their livestock. The local farmers like John Schroeder sell large quantities of their their corn to POET for $3.80 a bushel (7). Of course there are many problems that can and have arisen in the past and present that can affect this process. One crucial example is a shortage of corn production. In order for the plants to function effectively and maintain production quotas for the massive need of ethanol in the US gasoline supply they need farmers throughout the country, guys like John Schroeder to have successful harvests. As every farmer knows this just isn’t the case. Crops can be affected by disease, insects, weather; the list goes on and on. Additionally the corn has to maintain a dryness level , meaning it cannot contain more than 18% moisture levels (7). However, POET is currently accepting a limited amount of wet corn which could be directly linked to a shortage in supply meeting the demand of these biorefining plants. An example of this happened in 2013 when a US Drought cased the halt of 20 ethanol production plants nationwide. It did not cause a shortage in ethanol production because there was plenty of corn for the remaining plants to stay running (8).

There has been a lot of talk about how much more environmentally beneficial and sustainable than the production of ethanol is than petroleum production. However, in an article release by Forbes in 2013 states this is not always the case:

“OK, can we please stop pretending biofuel made from corn is helping the planet and the environment? The United Nations Intergovernmental Panel on Climate Change released two of its Working Group reports at the end of last month (WGI and WGIII), and their short discussion of biofuels has ignited a fierce debate as to whether they’re of any environmental benefit at all. The IPCC was quite diplomatic in its discussion, saying “Biofuels have direct, fuel‐cycle GHG emissions that are typically 30–90% lower than those for gasoline or diesel fuels. However, since for some biofuels indirect emissions—including from land use change—can lead to greater total emissions than when using petroleum products, policy support needs to be considered on a case by case basis” (IPCC 2014 Chapter 8).” (1).

 The conversion from corn to ethanol is an efficient use of the grain due to its duel usage of both the ethanol and then the ability to take the nutrients and put them back into a livestock feed for continued sustainability of the farms.

 

Manufacturing of Ethanol:

The next step in the commodity chain of corn is the manufacturing of ethanol and the sale of that ethanol to fuel companies. The production of ethanol from corn or starch based feedstock is one of the earliest processes that people have developed. Overtime, methods have become more refined and efficient due to technological advances; however the basic steps remain the same. The two types of production processes are wet milling and dry milling, with the difference being how the initial grain is treated (2).

Dry Milling:

 Dry milling consists of a long process in which the entire corn kernel is first ground into flour, commonly called “meal” in the industry, being sure to keep all components of the grain together. Next, the meal is slurried with water to form a “mash” to which enzymes are added to in order to convert the starch to dextrose. Ammonia is also added in order to control pH and act as a nutrient to the yeast (2).

 Overall, the fermentation process takes about 40 to 50 hours and the resulting “beer” is transferred to distillation columns where the ethanol is separated from the remaining “stillage”. The final steps include concentrating the ethanol to 190 proof by using conventional distillation techniques, then dehydrating into to 200 proof by use of a molecular sieve system(2). The stillage is now ready to be separated by a specific machine in order to yield the products we use in our everyday lives. Evaporation techniques can be used to produce Condensed Distillers Solubles (CDS), commonly called “high-fructose corn syrup” which is sold to food companies. Another product comes from drying out the high fructose corn syrup to produce dried distillers grains with solubles (DDGS), which yield high quality, nutritious livestock feed that is sold to farmers. Lastly, the CO2 released during the fermentation process can be captured and sold for use in carbonating soft drinks and to the manufacturers of dry ice (2).

Wet milling:

In wet milling the grain is separated into its many component parts by being soaked in water and dilute sulfurous acid for 24-48 hours. The resulting corn slurry is then processed through a series of grinders to separate the corn oil from the germ, then other techniques are used to further separate out the remaining fiber, gluten and starch components. These individual components are then sold to appropriate buyers to maximize use of all aspects of the corn. For example, the steeping liquor is concentrated then co-dried with the fiber component and sold as corn gluten feed to the livestock industry.

If the steeping liquor doesn’t get combined in that way, it can be sold by itself as an ingredient used in environmentally friendly salt to the companies who maintain icy road conditions in the winter. The gluten component is filtered and dried to produce corn gluten meal, which is highly sought after by companies who use poultry broilers. Lastly, the starch and any remaining water from the mash can then be processed in three different ways: fermented into ethanol, dried and sold as modified corn starch, or processed into corn syrup. These processes occur in a very similar way to the dry milling process described earlier (2).

The method of converting corn into ethanol is one of the most important processes performed by humans today. Ethanol is good for the environment and the economy, while at the same time providing a high-octane alternative to gasoline (11). Many people have no idea that corn farms in Ohio are one of the main producers of ethanol. There are over 900 public E85 fueling stations available across the US, 48 of these being located in Ohio (4). Whether you wake up in the morning and have a Coke, or using use ethanol to fuel your car, it all originated from the same place: corn.

 

Works Cited:

1. Conca, James. “It’s Final–Corn Ethanol Is of No Use.” Forbes. Forbes Magazine, 20 Apr. 2014. Web. 16 Apr. 2015.
2. “How Ethanol Is Made.” How Ethanol Is Made. Renewable Fuels Association, n.d. Web. 14 Apr. 2015.
3. John Cardina, Catherine P. Herms, and Douglas J. Doohan (2002) Crop rotation and tillage system effects on           weed seedbanks. Weed Science: July 2002, Vol. 50, No. 4, pp. 448-460.
4. “Ohio E85 Gas Station Locations.” Ohio E85 Gas Station Locations. N.p., n.d. Web. 14 Apr. 2015.
5. “Ohio Ethanol Producers Association :: Food Prices.” Ohio Ethanol Producers Association :: Food Prices. N.p.,         n.d. Web. 14 Apr. 2015.
6. Niese, S. (2015, January 1). Review of Sunrise Seed Cooperative operation [Telephone interview].
7. POET Biorefining – Marion.” POET Biorefining – Marion. N.p., n.d. Web. 16 Apr. 2015.
8. Salter, Jim. “Corn Shortage Idles 20 Ethanol Plants Nationwide.” USA Today. N.p., 10 Feb. 2013. Web. 16 Apr.
9. Schroeder, J. (2015, April 10). Review of Schroeder’s Grain Farm operation [In person interview].
10. Sunrise Cooperative. (n.d.). Retrieved March 31, 2015, from http://www.sunrisecoop.com/index.cfm
11. West, Larry. “Where Can You Buy Ethanol?” Environmental Issues. About News, n.d. Web. 14 Apr. 2015.