November 10,2003

Boom in Soybean-Based Fuels Would Increase US' Corn & Soybean Prices

In a potential bonanza for the United States' Minnesota soybean growers, congressional negotiators have agreed to a series of tax breaks that could unleash a boom in soybean-based fuels.

Republican lawmakers have agreed to a $1-a gallon tax credit for soydiesel, hoping to jump-start a fledgling industry across the rural Midwest. There were conflicting reports about whether negotiators have also agreed to mandate the use of 5 billion gallons of ethanol and soydiesel, within a decade, which would double current biofuel production.

If both provisions become lawfully official, corn and soybean prices throughout the state would increase, said Mike Schommer, a spokesman for the Minnesota Department of Agriculture.

Minnesota ranks third among the states in soybean production, fifth in corn, and in recent years have produced nearly 15% of the nation's ethanol.

"This is great news for Minnesota and our entire nation," US¡¯ Senator Norm Coleman said in a statement. "By encouraging the expanded use of renewable fuels, we are fostering economic development and energy independence. ¡­ This is a jobs bill when a jobs bill is needed."

Farm boosters are hoping that changing national laws can help the infant soydiesel industry take root, not to mention double ethanol capacity, by 2012.

Added Sharon Clark, a farmer from western Minnesota and deputy agriculture commissioner, "As a producer myself, I think it's a good alternative fuel for us to use. It helps us with our soybean market, just as it helped with the corn markets back in the mid-'80s. ¡­ Farmers were looking at what they could do to increase the value of this raw product that we were exporting out of the state."