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Q & A: Jeff Broin, POET Founder
Jeff Broin has stirred the ethanol industry pot like no other. In 1987, the Minnesota farm boy ran a 1-million-gallon plant his family bought in Scotland, South Dakota. A decade later, the business, renamed POET, hit 1 billion gallons. Today, POET rivals ADM as the top U.S. producer. It’s one of the first commercial cellulosic ethanol producers, in a joint venture with Royal DSM of the Netherlands.
SF: How important is ethanol to U.S. farmers?
JB: In the early 1980s when my father started looking at producing ethanol on his farm, corn prices were as low as $1.30 a bushel while costing more than two times that much to produce. Not only was there a surplus of grain and low prices, but also there were set-aside acres and storage payments to store corn that there was no market for. From a farmer’s perspective, the future of ag looked pretty bleak.
The growth of ethanol over the next 20 years would definitely begin to balance the commodity supplies – not just for the U.S. but for the entire world.
SF: Why are prices falling?
JB: Shortly after ethanol production stabilized and plateaued, grain prices started to drop. If you look at the increases in yield in the U.S. and around the world, and you look at all the uses of corn and the rate at which they’re increasing, there is no way we can use up the future supply of corn and balance the market without more ethanol production and a higher percentage of ethanol in gasoline.
SF: The Renewable Fuel Standard allows 15 billion gallons of corn ethanol. What happens after that?
JB: The industry has produced well above the renewable fuel standard many times in the past. I believe it will again in the future. In addition, cellulosic ethanol will create new volumes.
SF: Will cellulosic grow?
JB: I believe the technology will be there, as long as the government stands behind its commitments to ethanol producers and to rural America.
As we look to build cellulosic ethanol plants, we’ve had significant interest from other countries around the world. EPA needs to continue to show support for both grain and cellulosic ethanol, or there’s a high probability these plants could be built somewhere else. It could be almost anywhere. There’s waste cellulose in virtually every country in the world.
SF: You have a charitable foundation. What is it doing in Africa?
JB: We have a project called Mission Greenfield. We’re in Kenya, northeast of Nairobi. It’s a joint venture with FIPS (Farm Input Promotions) Africa. Village-based advisers teach 20,000 farmers how to grow crops to improve animal yields and food yields. We work with them in all areas of agriculture.
When I was in Africa two and a half years ago, I saw corn that was 2½ to 3½ feet tall. The crop was either brown or light green, and there were no ears growing on most of it. Land has traditionally been hoed by hand. Because they don’t have a freeze-thaw cycle, there’s a hardpan below the dirt that’s probably been there for hundreds – if not thousands – of years. In the past, the roots would spread out when they hit the hardpan. Therefore, a short period of dry weather would cause poor to no yield.
We bring in packets of seed provided by DuPont Africa. We teach deep tillage, which they’ve never done. We teach them how to use proper hybrids. We teach them fertilization techniques. We teach them how to plant seeds properly.
Today, they can have dry conditions, because we’re doing deep tillage. Now, the roots can go down 6 to 8 feet instead of 8 to 12 inches.
The results are amazing. Yields are up to nine times higher. We’ve eliminated 25% of the poverty in this region in two years.
An important part of the change we’ve seen is sustainable grain prices. If we return to subsidizing U.S. grain in the future, the progress in Africa will stop and reverse. That’s because the African farmer also needs sustainable grain prices to make a profit.
Name: Jeff Broin
Hometown: Wanamingo, Minnesota
Achievements: After earning an agricultural business degree at the University of Wisconsin, Broin moved to Scotland, South Dakota, to manage his family’s first ethanol plant. POET now has 27 U.S. plants with annual production capacity of 1.7 billion gallons. Two presidents, George W. Bush and Barack Obama, have visited POET plants. Broin started Growth Energy, a trade group that got EPA to approve 15% ethanol (E15) for most cars. He worked with the National Corn Growers Association on several ethanol promotions.