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Ethanol Producer in Texas

Oil-rich Texas drawn to ethanol

By Jeff DeYoung, Iowa Farmer Today

Opening its first E85 gas station is just the start of things to come for the Texas ethanol industry.

David Gibson, executive director of the Texas Corn Producers Board, says the E85 pump shows him when ethanol plants start producing in the Lone Star State, the demand will be there for fuel and livestock feed.

“With all the activity, we are expecting things to move along very quickly,” he says.

No plants are operational in Texas. Gibson says two plants near Hereford are being planned, each expected to produce 100 million gallons of ethanol per year.

Those plants are located near rail lines used to import the significant amount of corn needed for the nation’s largest cattle-feeding state.

“Those are both located in DeSmet County, which is one of the largest cattle-feeding counties in the U.S.,” Gibson says.

“There are also large dairies moving into central Texas, so there are huge markets available for DGS (distillers grain with solubles) because it will cut the cost of the corn.”

Several other plants are in the groundbreaking or planning stages across the state. Most will use corn imported from Iowa and other states, along with grain sorghum.

“We are seeing quite a bit of activity in the Panhandle area,” Gibson says. “We also passed a bill a couple of years ago to provide incentives, although there are still some questions regarding funding. But, the legislators assure us the money will be there, so we are moving along.”

Ethanol production is also picking up steam in Kansas, the nation’s second largest cattle feeding state, says Sue Schulte, director of communications for the Kansas Corn Growers and Kansas Grain Sorghum Producers.

She says Kansas has seven ethanol plants in production. The most recent opened in June.

“They are really spread around the state pretty evenly, and we believe there will be a lot more coming,” Schulte says. “Our state Legislature and governor are very interested and very supportive of the industry.”

The majority of ethanol produced in Kansas is made with grain sorghum, although some corn also is used. She says Kansas producers grow 500 million bushels of corn and grain sorghum combined.

With ethanol using about 65 million bu., there appears to be plenty of grain for the livestock and ethanol industries.

Schulte says legislation became effective July 1 that repealed the labeling requirement for ethanol at the gas pump, and she believes that will give ethanol better access to markets across the state.

Some retailers, however, are keeping the labels, she adds.

“They are telling us it’s just another promotion tool for them, that their customers look for that label,” Schulte says.

She says much of the ethanol produced in Kansas is shipped out of state. The increased availability of DGS appeals to cattle producers, Schulte adds.

“We have some very large cattle-feeding operations in our state, and DGS is very popular with them. The market for DGS is just outstanding, and we expect that to continue.”