Will cellulosic ethanol pose a future challenge to poultry?

Poultry producers are due some economic relief from high feed costs with corn-ethanol mandates set to level off in 2015. Now, however, cellulosic ethanol proponents are ready to drive food and fuel policy - and it raises the specter of new ethanol-related incentives or mandates.

It raises unexpected questions. For example, would corn yields increase to 250 bushels in 10 years? That's what some proponents of cellulosic ethanol are betting can happen to allow more acreage to be available for the production of cellulosic biomass.

That's the thinking advanced in the Council for Agricultural Science and Technology issue paper, "Food, fuel and plant nutrient use in the future," which examines the connections between the world's needs for food and fuel and the use of soil nutrients.

What about first relieving the grain shortages of today - the ones that have pushed a number of poultry companies into bankruptcy since the implementation of the Renewable Fuel Standard? Don't worry, poultry producers. David Zilberman, Department of Agricultural and Resource Economics, University of California - Berkeley, and his co-researchers have proposed cellulosic biofuel systems they say solve the problem. They involve coproducing animal feeds and double cropping corn and soybean acres.

 Double cropping and coproduction
The report contemplates as much as one-third of U.S. corn and soybean land being used to produce a winter double crop with a total biomass (grain plus cellulosic biomass) increased 2.5 times over current levels. The biomass could include corn stover to feed cellulosic processes or grasses and legumes in the early spring to produce leaf protein concentrate for animal feed. The residual cellulosic fiber left behind after the protein is removed would be suitable for animal feed or biofuel production.

"Additional feed protein also may be readily coproduced with biofuels via the spent yeast cell mass following the fermentation to produce fuels," the researchers claim. "Therefore, it is likely that increased cellulosic biofuel production will be accompanied by large increases in quantities of ruminant animal feeds, leading to an increase in both protein and digestible energy."

The approach would decrease total U.S. GHG emissions, they calculate, by approximately 700 teragrams carbon dioxide equivalents per year, roughly 10 percent of the total U.S. GHG emissions.

 Policy commitments required
The biofuel systems described in the report are not simple and smack of centralized economic planning - the kind of thinking behind the Renewable Fuel Standard.

"With investment in technology and policy commitments, adaptation of the agricultural system to produce food, animal feed and sustainable biofuels is possible," the report reads. To garner the environmental benefits, it concludes, "it is necessary to think of the whole system and work to improve its overall performance rather than focusing exclusively on small pieces of the system."

The researchers make the following statement, which many in the poultry industry would find incredible: "The analysis of this paper shows that the United States can produce very large amounts of biofuels, maintain domestic food supplies, continue the contribution to international food stock, increase soil fertility and significantly decrease CHG emissions." That's a lot to promise.

 Freedom from oil imports?
The report, in fact, envisions a U.S. economy free of imported oil. "In the United States alone, there is sufficient cellulosic biomass to produce enough ethanol to replace all imported oil rather easily," the report says.

That's an appealing alternative to the economic prospect described in the report: "The balance between oil supply and oil demand is tight enough that economic growth will put steady pressure on oil prices, magnifying any effects of speculation and threatened or actual loss of supply.

"Unfortunately, it may be that low oil prices will remain low only during a recession. Thus, we arrive at a potentially grim future described by the following painful cycle: recession leads to lower oil prices, lower oil prices promote economic recovery; oil prices rise in turn, aborting the nascent recovery and returning us once again to recession. In short, not a pretty picture for an oil-dependent world."

 Promises for cellulosic energy
The economic outcome from the biofuel systems described by Zilberman and associates is appealing, and I would like to believe in it. However, the track record for government intervention - which would be required to make all this work - is worse than poor. What's more, with so much promised, consider how much needs to go right.

And check this statement in the report: "Continued policy emphasis and incentives tied to improving the environmental performance of biofuels as well as animal feed production also would be needed to drive the desired changes, at least during the period of adjustment." What kind of incentives would be involved? And where incentives are used, would mandates for biomass acreage or new cellulosic volumes be far behind?

Economic adjustment may not matter much to the EPA and policy wonks who don't have businesses on the line. But it can mean everything to owners and workers in the poultry industry whose businesses and jobs are at stake. Poultry producers, in fact, are still in a "period of adjustment" after the Renewable Fuel Standard. They now face the specter of new incentives or mandates for the ethanol blend du jour in Washington - cellulosic.