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February 27, 2013By Ken Morgan of Interstate Farm Network
FOR IMMEDIATE RELEASE
Contact: Chuck Beck
ACE letter to Environment Committee exposes misleading CRC E15 testing results
Sioux Falls, SD (February 26, 2013) – The Senior Vice President for the American Coalition for Ethanol (ACE), Ron Lamberty today sent a letter to the heads of the Congressional Subcommittee on Science, Space and Technology stating ACE’s concerns over the Congressional Subcommittee’s possible reliance on the Coordinating Research Council’s (CRC) testing results.
Lamberty says in the letter that: “That is the reason the vehicles were selected. The 2001 Honda CR-V, 2002 VW Jetta, 2004 Scion xA, 2005 Chevrolet Colorado, 2007 Ford Edge, 2007 Dodge Ram, 2009 Dodge Caliber, and 2009 Chevrolet Aveo, were selected for CRC Project CM-136-09-1 because they already had a history of the type of failure the test purported to be looking for regardless of the fuel it was using. As such, it is inaccurate to say those engines were “sensitive to the effects of E20” or E15. Over 300 Technical Service Bulletins (TSB) were issued by the manufacturers of the eight CRC-tested vehicles, and many of those bulletins described problems that would cause the vehicle to “fail” in the CRC test. TSBs are not issued for isolated problems – they are issued for problems that service technicians are likely to see frequently.”
“The E15 debate is not about fuel quality. Porsche approves the use E15 in 2001 and newer cars. The companies who make lawnmowers don’t approve it. Some engines just are not of sufficient quality to handle today’s fuels. E15 has been thoroughly tested, including several successful tests by CRC, as a safe fuel for approved vehicles and engines. We appreciate your consideration and trust the science behind E15 will receive a full and fair hearing at some point in the near future,” wrote Lamberty.
The letter can be read in full here.
The American Coalition for Ethanol (ACE) is the grassroots voice of the U.S. ethanol industry, a national advocacy association for the ethanol industry with nearly 1,500 members nationwide, including farmers, ethanol producers, commodity organizations, businesses supplying goods and services to the ethanol industry, rural electric cooperatives, and individuals supportive of increased production and use of ethanol. For more information about ethanol or ACE, visit www.ethanol.org or call (605) 334-3381.
February 26, 2013
The Honorable Andy Harris
Subcommittee on Environment
Committee on Science, Space and Technology
U.S. House of Representatives
The Honorable Suzanne Bonamici
Subcommittee on Environment
Committee on Science, Space and Technology
U.S. House of Representatives
Dear Chairman Harris and Ranking Member Bonamici:
On behalf of the 600 members of the American Coalition for Ethanol (ACE), I am writing to explain our deep concern with the ongoing misrepresentation of testing by the Coordinated Research Council (CRC) on E15 because it appears the Subcommittee will rely heavily upon this flawed study in today’s hearing.
Founded in 1987, ACE is the grassroots voice of the U.S. ethanol industry, uniting ethanol producers, farmers, agriculture and commodity groups, cellulosic and advanced biofuel companies, rural electric cooperatives, and grassroots individuals in support of our mission to make American ethanol the consumer fuel of choice. More information about ACE can be found at our website, www.ethanol.org.
Since no representatives of the ethanol industry were invited to participate in today’s hearing, we are skeptical that its reported goal - to examine the scientific, technical and consumer impacts of EPA's approval of E15, and the impact of E15 on car engines and fuel infrastructure – is a goal that can be achieved. Our skepticism for a fair hearing is obvious when the only scheduled witnesses are a representative of the American Motorcyclist Association; an industry that is forbidden by law from using E15, CRC; formed and funded by the oil industry and the author of the severely flawed study in question regarding E15 and car engines, and AAA; which has abandoned its reputation as an advocate for motorists to instead widely misrepresent the results of the CRC study.
Of major concern to our industry is “CRC Project Number CM-136-09-1- Engine Durability Study of Intermediate Ethanol Blends,” and the ongoing distortion of that study’s results in the media and before Congress. ACE and many others have been vocal critics of the very biased CRC study. In fact, so many have criticized this test that CRC felt compelled to write an open letter defending its integrity and test methods. We were hopeful that the media or elected officials would look further into the details of the study and see the same irregularities that we have seen. Unfortunately, there appears to be little interest in discussing of the actual details of the CRC study.
Certainly, members of the Science and Technology Committee understand, better than most other elected officials, that for a study to be considered statistically sound, it must test a representative sample that is sufficiently large, and it must make every effort to minimize the bias of that sample. On those basic of requirements for scientific accuracy, CRC Project CM-136-09-1 fails miserably.
In earlier E15 and mid-level ethanol blends testing, CRC selected vehicles from among the most popular in the U.S., and in most of those tests, the results were favorable for E15. CRC Project CM-136-09-1 takes a very different approach, choosing vehicles that represent a tiny sliver of the vehicle fleet that has been approved to use E15, and assuring that the chosen sliver is comprised of vehicles with engines that have a high likelihood of failure regardless of fuel.
Even though E15 was tested by the U.S. Department of Energy and approved by EPA for 2001 and newer vehicles after a public comment period in which no data proving problems associated with E15 in passenger vehicles was presented, the oil industry is now pushing for legislation that would deny consumer access to it. Oil companies are making their case by misrepresenting the results of the CRC study, which tests an eight vehicle sample, only one of which was among the top 10 vehicles sold in the U.S. since 2001 (chart). The American Petroleum Institute (API) and other ethanol opponents continually refer to “millions of vehicles at risk,” yet the eight vehicles represent less than one million of the 180 million cars and light trucks sold in the U.S. in model years 2001 and later. In fact, U.S. sales of the vehicle models used in CRC Project CM-136-09-1 make up about one-half of one percent of the total vehicle pool approved to use E15.
Such a non-representative sample should raise a red flag in the science and technology community, yet CRC and the oil industry have been practically unchallenged in their characterization of CRC Project CM-136-09-1 as a test that is representative of the vehicle fleet in general. To the contrary, the February 18, 2009 request for proposal (RFP) for the CRC study states clearly that the objective of the test is to determine durability on engines that “are deemed to be sensitive to the effects of E20.”
That is the reason the vehicles were selected. The 2001 Honda CR-V, 2002 VW Jetta, 2004 Scion xA, 2005 Chevrolet Colorado, 2007 Ford Edge, 2007 Dodge Ram, 2009 Dodge Caliber, and 2009 Chevrolet Aveo, were selected for CRC Project CM-136-09-1 because they already had a history of the type of failure the test purported to be looking for regardless of the fuel it was using. As such, it is inaccurate to say those engines were “sensitive to the effects of E20” or E15. Over 300 Technical Service Bulletins (TSB) were issued by the manufacturers of the eight CRC-tested vehicles, and many of those bulletins described problems that would cause the vehicle to “fail” in the CRC test. TSBs are not issued for isolated problems – they are issued for problems that service technicians are likely to see frequently.
Rather than test the much better-selling Honda Accord or Civic, CRC chose the 2001 Honda CR-V. Six TSBs dating back to April of 2002, show a history of rough idle, hard stating, poor engine performance, malfunction indicator lamps, evaporative emissions system issues, coolant in the oil pan, and internal leaks in the 2002 CR-V – all which have been happening long before the introduction of E15.
The Toyota Camry is usually the top selling car in the U.S., and Corolla is not far behind. CRC decided to instead test the Scion xA, with its TSB on fuel injectors that clogged without ever using E15. Since we don’t know which vehicles are which in the CRC test, we don’t know if E20 or E15, in fact, cleared the blockage. But we do know that none of the CRC-tested engines had fuel injector problems.
Volkswagen issued TSBs on the 2002 Jetta for fuel system diagnostic trouble codes, problems with rich and lean fuel mixtures, rough idle, significant loss of power or stalling with reduced performance. The Chevrolet Aveo had a TSB issued regarding reduced power and a check engine light.
Half of the vehicles purchased in the U.S. are light trucks, and the Ford F150 and Chevy Silverado have been the two top selling vehicles for many years. So why would CRC choose the 2005 Chevrolet Colorado for Project CM-136-09-1 instead? Perhaps because the Colorado had a history of problems with valves, valve seats, combustion leakage, bad trouble codes, and reduced power. In fact twenty TSBs were issued on the Chevy Colorado for problems that would fail the CRC Project CM-136-09-1 tests, and General Motors took the unusual step of sending a letter to every Colorado owner telling them that the engine intake valve seats may wear, which “will cause partial misfire and illumination of the service engine soon light. Continued operation and resulting additional wear may eventually lead to engine idle roughness.” Chevy even extended its warranty on the Colorado to 7 years and 100,000 miles to assure that the problem was repaired if it happened later in the life of the car.
All of the problems listed in the preceding paragraphs were among the list of reasons that an engine would be deemed “failed” in the special standards CRC created specifically for this test.
The history problems with these engines happened regardless of fuel, long before E15 or E20 existed. In addition to the selection of the vehicles, the RFP for CRC Project CM-136-09-1 clearly points out that the CRC test itself is designed to induce the problems it eventually found. “The cycle was developed based on fuel induced valve seat recession and control affects on engine durability.” It also says “The test procedure calls for accelerated testing to reduce test time and reveal possible failures…the severity helps reduce test time…”
Given this critical background and perspective, it is clear that either CRC selected the vehicles and the test protocol because they knew there was a high likelihood of failure regardless of fuel, and that is the result they wanted, or, they had no idea that the vehicles selected had these issues. The latter would indicate a stunning lack of due diligence in the preparation for the test. Clearly, the objective was to shift blame for historical failure to a new fuel, and that objective is in writing.
It is curious, then, why CRC refuses to make that point clear when API continues to misrepresent the study as a mainstream indicator of widespread E15 destruction? The CRC test merely indicates that some engines that already had problems will continue to have problems, regardless of fuel.
What Congress needs to investigate is why the oil companies are misleading it into eliminating their only real competition, and why this contrived CRC research is not being more fully analyzed. Prior to the CRC test, the U.S. Energy Department conducted its own rigorous peer-reviewed tests on E15 which EPA relied upon in approving the fuel. Why does the Subcommittee not seem interested in the perspective of the Energy Department on E15?
The E15 debate is not about fuel quality. Porsche approves the use E15 in 2001 and newer cars. The companies who make lawnmowers don’t approve it. Some engines just are not of sufficient quality to handle today’s fuels. E15 has been thoroughly tested, including several successful tests by CRC, as a safe fuel for approved vehicles and engines. We appreciate your consideration and trust the science behind E15 will receive a full and fair hearing at some point in the near future. ACE stands ready to provide any information needed to help this Subcommittee make its decision based on science rather than public relations campaigns and rhetoric.
Ron Lamberty, Senior Vice President
American Coalition for Ethanol (ACE)
PARTIAL LIST-TECHNICAL SERVICE BULLETINS FOR VEHICLES USED IN CRC PROJECT NUMBER: CM-136-09-1B
2001 Honda Cr-v – 5 TSBs E&EC, 3 FS
2001 Honda Cr-v Engine And Engine Cooling Service Bulletin 169961
NHTSA: Action Number: 10008524 Service Bulletin Number: 169961
Summary: Rough idle, hard to start, poor engine performance, or malfunction indicator lamp (mil) comes on with diagnostic trouble code (dtc) p0301, p0302, p0303, p0304, or p0172. *tt *eh
2001 Honda Cr-v Fuel System, Gasoline Service Bulletin 123333
NHTSA: Action Number: 637950 Service Bulletin Number: 123333
Summary: Information concerning evaporative system function test error message. *tt
2001 Honda Cr-v Fuel System, Gasoline Service Bulletin 121375
NHTSA: Action Number: 636753 Service Bulletin Number: 121375
Summary: Information on testing for interal leaks with diagnostic trouble code p1456 or p1457. *tt
2001 Honda Cr-v Fuel System, Other Service Bulletin 136870
NHTSA: Action Number: 10000993 Service Bulletin Number: 136870
Summary: Malfunction indicator lamp on with diagnostic trouble code p1457 - evap bypass solenoid valve failure. *tt
2001 Honda Cr-v Engine And Engine Cooling Service Bulletin 140592
NHTSA: Action Number: 10002091 Service Bulletin Number: 140592
Summary: Coolant in the engine oil pan. *tt
2001 Honda Cr-v Engine And Engine Cooling Service Bulletin 142970
NHTSA: Action Number: 10002701 Service Bulletin Number: 142970
Summary: Vehicle's emission type. *tt
2005 Chevrolet Colorado – 20 E&EC,
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 230572
NHTSA: Action Number: 10022722 Service Bulletin Number: 230572
Summary: Chevrolet\gmc service campaign: see document search button for owner letter. Special coverage adjustment - engine intake valve seat may wear, such that combustion leakage occurs. Equipped with either a 2. 8l (rpo lk5) 4 cylinder or 3. 5l (rp
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 179382
NHTSA: Action Number: 10010251 Service Bulletin Number: 179382
Summary: Service engine soon light due to a p0171 diagnostic trouble code. *tt
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 184705
NHTSA: Action Number: 10011632 Service Bulletin Number: 184705
Summary: Temperature coolant gauge low or inoperative. *eh
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 184762
NHTSA: Action Number: 10011666 Service Bulletin Number: 184762
Summary: Service engine soon light due to a p0171 diagnostic trouble code. *eh 3221a not yet received. *tt update. *tt
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 184830
NHTSA: Action Number: 10011688 Service Bulletin Number: 184830
Summary: Flashing service engine soon light with possible misfire and p0300-p0304 diagnostic trouble code. *eh engine exchange program. *tt
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 185235
NHTSA: Action Number: 10011758 Service Bulletin Number: 185235
Summary: Engine vibration and knock from the rear of the engine. *eh
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 197841
NHTSA: Action Number: 10014877 Service Bulletin Number: 197841
Summary: Service engine soon (ses) light and reduced engine power due to a p0507 diagnostic trouble code. *tt
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 205229
NHTSA: Action Number: 10017121 Service Bulletin Number: 205229
Summary: Engine miss on acceleration after shifting from drive to reverse-possible characteristic. *sc
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 205991
NHTSA: Action Number: 10017221 Service Bulletin Number: 205991
Summary: 04-06-04-081a exhaust valve seal and spring replacement supplement. *tt
2005 Chevrolet Colorado Engine And Engine Cooling Service Bulletin 211636
NHTSA: Action Number: 10018577 Service Bulletin Number: 211636
Summary: P0300 due to random misfires not felt - possible accessory pulley. *tt
2005 Chevrolet Colorado Fuel System, Other Service Bulletin 246437
NHTSA: Action Number: 10026704 Service Bulletin Number: 246437
Summary: Gmc: fuel gauge fluctuation in park or neutral, causing the low fuel light to illuminate. *pe
2009 Dodge Caliber Fuel System, Other Service Bulletin 291347
NHTSA: Action Number: 10034545 Service Bulletin Number: 291347
Summary: Dodge: fuel gauge fluctuation. Fuel gauge is not accurate or fluctuates at 3/4 of a tank or above. This bulletin involves replacing the fuel sending unit, clocking the fuel module and installing a fuel jumper hose. *pe
2009 Chevrolet Aveo Engine And Engine Cooling Service Bulletin 290195
NHTSA: Action Number: 10034366 Service Bulletin Number: 290195
Summary: Chevrolet: engineering information closed/results provided-mil/check engine light on, reduced power mode, dtcs p2101, p2135 set. The cause of this condition may be due to poor terminal crimps in the engine wiring harness. *pe
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 329339
NHTSA: Action Number: 10043602 Service Bulletin Number: 329339
Summary: Volkswagen: gasoline engines have rough idle, have significant loss of power or stalling with reduced performance. *pe
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 296028
NHTSA: Action Number: 10036496 Service Bulletin Number: 296028
Summary: Volkswagen: gasoline engine vehicles inspect, and if necessary, replace ignition coils. Vehicles affected by this action may have ignition coils that could malfunction under certain conditions. Models passat and wagon; golf; gti; jetta a
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 286713
NHTSA: Action Number: 10033216 Service Bulletin Number: 286713
Summary: Volkswagen: (revised) vehicles may have ignition coils that could malfunction under certain conditions. If this happens, the malfunction indicator lamp (mil) will illuminated to let you know that vehicle may experience some deterioration
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 248617
NHTSA: Action Number: 10026848 Service Bulletin Number: 248617
Summary: Volkswagen: exhaust heat shield, replacement guidelines. Heat shields are to be inspected after completion o any type of repair to the underbody (exhaust system transmission, etc. ), and if damaged, replaced. *pe
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 225281
NHTSA: Action Number: 10021315 Service Bulletin Number: 225281
Summary: Dtc's p1297 (17705) or p1557 (17965) stored in dtc memory. This may be caused by intake hoses leaking (during boost conditions) due to incorrect torque on clamps or improper placement, worn or torn intake hoses. *kb
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 200885
NHTSA: Action Number: 10015989 Service Bulletin Number: 200885
Summary: Update programming flashing engine control module ecm. Vw 2002-2003 gti, jetta, jetta wagon with 1. 8 eng. Code awp *sc
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 165787
NHTSA: Action Number: 10007711 Service Bulletin Number: 165787
Summary: Evaluating fuel mixture diagnostic trouble codes- how to perform effective diagnosis related to fuel system adaptation - system too rich/too lean. Volkswagen. *mj
2002 Volkswagen Jetta Engine And Engine Cooling Service Bulletin 135062
NHTSA: Action Number: 10000581 Service Bulletin Number: 135062
Summary: Misfire, incorrect cylinder fault codes p0301, p0302, p0303 or p0304 identified by ecm software. *tt
February 26, 2013 Stephanie Olmscheid
National Farmers Union Convention: March 2-6, 2013 Springfield, Massachusetts
Minnesota Farmers Union members heading to National Farmers Union Convention in Springfield, Massachusetts
Minnesota Farmers Union (MFU) members will be attending the National Farmers Union (NFU) Convention in Springfield, Massachusetts March 2-6. NFU Policy will be discussed and voted upon. There are also two proposed Special Orders of Business, to adopt a new five year Farm Bill, and also to reform dairy pricing.
“The focus of this year’s convention is to send a message to congress of working together for the good of America” says MFU President Doug Peterson. “Working together means passing a five year Farm Bill with positive pricing for dairy.”
Mitchell Farmer-Lies of Belle Plaine will be attending as part of the National Youth Advisory Council (NYAC). He was one of only six people elected by his peers to be on NYAC. Jake will make a presentation to the entire convention body, and help plan next year’s NFU All-States Leadership Camp.
Peter and Stacy Ripka of Ogilvie will be attending as members of the Farmers Union Leadership Couples' Program, developed to empower future leaders in Farmers Union and rural communities.
Bessie Klose of Atwater and MFU Vice President Gary Wertish of Renville will be attending as Silver Star Award recipients, the highest award a member can receive for membership recruitment in a given year.
Retired Farmers Union Insurance President, Jim Frederickson of Rogers will be attending as Meritorious Service Award recipient for his humanitarian efforts.
Delegates to the NFU Convention are Jim Falk of Murdock; Judy Moen of Climax; Mike Ratka of Foley; Bill Sorg of Hastings; and MFU Executive Board Member Larry Jacobson of Hitterdal.
MFU President Doug Peterson will be attending as Secretary of the NFU Board of Directors.
Other MFU members attending are: Farmers Union Agency President Rodney Allebach of Menahga; Ross Eischens of Minneota; Merlyn and Sandy Hubin of Hitterdal; Marv and Marlyns Jensen of Kensington; Brian Rohrenbach of Rosemount; Linda Larson of Rosemount; Richard Moen of Clearbrook; Gene Paul of Delavan; Alan and Karen Perish of Browerville; Elly Peterson of Madison; Lisa Syverson of Ulen; and Jessica Ratka of Foley.
If you would like to speak with any of these people during the convention, please contact Stephanie Olmscheid, Acting MFU Communications Director, 507.469.9216 or email@example.com
You can view the full convention agenda at www.nfu.org/convention.
Outdoor heritage fund passes House
The North Dakota House narrowly approved a bill that would take up to $30 million in oil and gas tax revenue every two years to create an outdoor heritage fund for conservation.
Representatives passed House Bill 1278 on Monday night by a 48-44 margin. Two House members were absent and did not vote.
The House Energy and Natural Resources Committee gave it 10-9 "do pass" recommendation earlier.
The original bill, introduced by Rep. Todd Porter, D-Mandan, was amended to allow up to $100 million be placed into the oil and gas impact fund with a maximum of $30 million into the outdoor heritage fund each biennium.
Under the bill, a 12-member advisory board could provide grants to state agencies, tribes, political subdivisions and nonprofits for conservation projects.
The advisory board would consist of one member each from the Farm Bureau, the Farmers Union, the Stockmen’s Association and the Grain Grower’s Association.
The board also would have a member from the Lignite Council, the Petroleum Council, Ducks Unlimited, the Natural Resources Trust Fund, Pheasants Forever and an at-large member from other conservation groups.
It also would have a member from the Greater North Dakota Chamber and the North Dakota Parks and Recreation Association.
The measure was to be voted on in the November general election but was not on the ballot because of petition signature fraud.
Achieve Optimum Planting Depth this Spring
To achieve optimum planting depth this spring, consider the following planting depth recommendations:
What: The Central Minnesota Farm Show - Sponsored by the St. Cloud Area Chamber of
Where: River’s Edge Convention Center, 10 4th South,
St.Cloud, MN 56301
When: February 26, 27, 28
Hours are from 9:00 a.m. - 4:00 p.m.
Cost: Admission is free to the general public
Central Minnesota Farm Show St Cloud Rivers Edge Convention Center
New this year! Special presentation on Thursday, February 28, 11 a.m. to noon, “Keeping the Farm in the Family!” Local attorneys, Kale R. Van Bruggen of Rinke Noonan and Jacqueline M. Schuh of Engelmeier & Umanah, PA, will discuss estate planning and the 2012 farm exemption. There is no charge to attend this presentation.
Africulture: Central Minnesota’s Sleeping Giant
Mary E. Edwards
Professor of Economics, St. Cloud State University
From the raw numbers, agriculture appears to command a tiny presence within the St. Cloud MSA. In 2001, farm earnings (the sum of wages, salaries, benefits, and proprietors’ income) made up less than 2 percent of total area earnings. In 2008, farm earnings became 4.5 percent of total area earnings. Further, in 2008, farm earnings increased by 64 percent from 2007 for the state, but for St. Cloud MSA, farm earnings increased by 82 percent just between those two years. The growth in the ratio in farm earnings to total earnings shown in Figure 1, demonstrates the increase in importance of the agricultural economy in Stearns and Benton Counties since 2001, as well as the consistently stronger importance of agriculture in the St. Cloud Area compared to the state overall.
Source: Bureau of Economic Analysis, CA 05, Personal income and detailed earnings by industry. http://www.bea.gov/regional/reis
Stearns County ranks first in Minnesota for the total value of agricultural products sold in 2007, and in the value of livestock, poultry and their products, specifically dairy. Stearns supplies 15 percent of the total dairy products produced in Minnesota. In addition, the county produces a greater amount of oats for grain, corn for silage and forage than any other county in Minnesota.
Farming in the St. Cloud MSA is becoming more efficient. As shown in Table 1, between 2000 and 2008, the percent change between 2000 and 2009 in bushels per acre for corn and soybeans increased by over 50 percent in Benton County. Corn yields per acre increased in Stearns County by over 30 percent, compared to only a 20 percent expansion in bushels of corn per acre in Minnesota. The bushels per acre of soybeans in Minnesota dropped slightly, but increased by nearly 40 percent in Stearns County.
Table 1. Percent change in yields (bushels per acre), 2000 to 2009.
Source: U.S. Department of Agriculture. Statistics by Subject; http://www.nass.usda.gov/Statistics_by_Subject/index.php?sector=CROPS.
However, the amount of farm receipts and yield per acre is only part of the story. The full impact of an industry is the amount of additional local spending necessary to produce the products. An increase in sales acts like a stone thrown into a calm pond. The initial sales create ripple effects in the local economy, often spreading out for several iterations.
Production incorporates three types of expenditure. Direct spending is the amount of goods sold within a specific industry. Indirect spending accounts for the purchases of intermediate goods. For instance, a farmer running a dairy farm will purchase fodder and silage from other farmers as well as farm implements from local dealers. Purchases like this are part of the indirect effects.
Finally, induced spending accounts for the purchases of farm workers, as well as employees of the establishments that sell goods and services to farmers. When employees purchase goods and services at the mall, go to movies, or make doctor appointments, that spending is categorized as induced spending. In 2007, the total value of all agricultural products sold in St. Cloud was $633 million, but the agricultural sector supports nearly $1.2 billion in local spending. The overall multiplier for the agricultural industry is about 1.87, meaning that an additional 87 cents is spent locally to create one dollar of outside sales.
To the extent that the various commodities enjoy different levels of support locally, their multipliers differ. The multiplier associated with grains, oilseeds, beans and peas is 1.82, but for poultry and eggs is only 1.64. Raising cattle and calves creates a relatively large multiplier of 2.34, taking into account silage and fodder purchases as well as veterinary services.
Sources: US Department of Agriculture, 2007 Census of Agriculture; IMPLAN.
Direct sales of dairy products amount to 39 percent of total agricultural products sold in the St. Cloud MSA but their total impact accounts for 42 percent of the total impact. Table 2 shows the largest beneficiaries of a $1 million increase in sales of dairy products, from $261 million to $262 million. The largest beneficiary, of course would be the dairy industry. However, the wholesale trade industry would have the second largest impact, followed by real estate. The slight increase in employment would increase the demand for residential housing, and would increase the demand for more PreK-12 teachers. In total, 21 industries would notice an increase in output topping $10,000 due to this slight of an increase in dairy sales.
Agriculture is the economic base of Central Minnesota. Even a slight expansion of this base affects numerous secondary industries. Agriculture in general, and dairy production in particular, stands as St. Cloud’s sleeping giant.
Information provided by Dr. Mary Edwards, Professor Ameritus, St. Cloud State University, winter of 2011.
February 26, 27, 28 2013
9:00 a.m. – 4:00 p.m. FREE ADMISSION
BIGGER and BETTER at the St. Cloud River’s Edge Convention Center
10 4th Ave S, St. Cloud, MN
* More than 300 booths!
* The latest farm equipment and related products!
* FREE milk, coffee, & donuts from 9-11 a.m.
Sponsored by: The Central Minnesota Farm Show Committee of the St. Cloud Area Chamber of Commerce www.StCloudAreaChamber.com (320) 251-2940
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