Farmers Discover Gold in Ethanol Production

Bliss Baker, Vice-President of Corporate Affairs, GreenField Ethanol

There’s a revolution in Ontario’s farm country and it’s taking place in the cornfield.

After decades of low prices, Ontario’s corn producers are discovering the ethanol industry may just be what they’ve been searching for -- a new and guaranteed market that will require millions of bushels of Ontario corn each year.

The market is growing quickly. In Ontario, four ethanol plants are operating, producing about 400 million litres of ethanol per year from corn. Three more plants are under construction, including two being built by GreenField Ethanol in Johnstown and Hensall. By the time all seven plants are operating at the end of 2008, almost one billion litres of ethanol will be produced per year in Ontario.

For the province’s farmers, this means an enormous demand for corn because those plants will require nearly 100 million bushels of their corn each year. This newly created demand for Ontario corn will provide long-term stability for grain marketers at guaranteed import
replacement pricing.

The Ontario Corn Producers’ Association is encouraged by the growth of the ethanol industry in Ontario and the support it has received from both levels of government,” stated Don Kenny, Chair of the Grain Trade & Market Development Committee of the Ontario Corn Producers’ Association. “As the ethanol industry expands, it represents new markets for Ontario corn producers."

There are two main drivers behind the surge in Ontario’s ethanol production. First, the Ontario government introduced an ethanol mandate at the beginning of the year, requiring all gasoline sold in the province to contain an average of five per cent ethanol. The province estimates this will create a market for an additional 50 million bushels of Ontario corn each year. It will also generate hundreds of jobs in rural Ontario and reduce greenhouse gas emissions by the equivalent of 200,000 cars.

Second, recent federal policy requires all gasoline in Canada to contain five per cent renewable fuels by 2010. This will create a new market for more than 200 million bushels of Canadian grains and oilseeds and 14,000 new jobs in rural communities. Greenhouse gas emissions will be reduced by more than 4.2 megatonnes -- the equivalent of taking more than one million cars off the road each year.

This year, GreenField will buy about 33 million bushels of corn. We are Canada’s largest ethanol producers with plants in Chatham, Tiverton and soon Johnstown and Hensall. We also operate Quebec’s only ethanol plant where local farmers were so enthused about the new market that 500 of them invested in the plant. These same farmers supply more than 12 million bushels of their corn each year to the Varennes plant giving them a guaranteed home for their corn.

By next year, when our plants in Johnstown and Hensall begin operating GreenField will require about 70 million bushels of corn per year much of which will be supplied to the plants through GreenField’s Buy Direct Program available exclusively to Ontario farmers.

An added benefit to ethanol production is the impact on the local rural economy. Production plants are typically built in rural areas with much of the revenue from a plant staying in the community. An average plant employs about 50 people with well-paying, high-skilled jobs
and provides hundreds of spin-off jobs through local providers of goods and services. More than 70 per cent of the revenue from an ethanol plant is spent within a 150-kilometre radius of its site.

Right now, about 35 rural communities across Canada are looking at ethanol production as a way of rejuvenating their economies, says the Canadian Renewable Fuels Association (CRFA). Just look at Iowa to see what ethanol production has done for its booming rural economy.

By growing corn for the production of ethanol, farmers are directly contributing to the reduction of greenhouse gases and the fight against climate change. When blended with gasoline to fuel cars, ethanol fights global warming by reducing greenhouse gas emissions by more than 50 per cent, according to Natural Resources Canada. This is something farmers can be proud of.

After many years, the efforts by the Ontario Corn Producers’ Association to expand the ethanol industry in the province have proven to be the right decision. New demand for corn from ethanol production is beginning to deliver real results. Corn prices are up, the rural economy has received a much-deserved boost, and farmers are making a real contribution to the fight against global warming making the environment a little greener for everyone. Congratulations to the OCPA.

If you would like more information about the industry and how we all are benefiting from the growth of Ontario’s ethanol industry, visit the Canadian Renewable Fuels Association’s (CRFA) website at www.greenfuels.org.