ADM, Deere, Monsanto in corn stover research

Decatur, Ill.-based Archer Daniels Midland (NYSE: ADM) announced plans today to team up with Moline, Ill.'s Deere & Co. (NYSE: DE) and St. Louis, Mo.-based Monsanto (NYSE: MON) on research into corn stover for use in biomass, cellulosic ethanol and animal feed.

ADM, one of the largest producers of corn ethanol in the U.S., said the companies will work together to identify environmentally and economically sustainable methods for the harvest, storage and transport of corn stover, which is the stalks, leaves and cobs of corn plants.

Financial terms of the collaboration were not disclosed, but ADM told the Cleantech Group that each of the three companies will be making research and development investments.

ADM has already made some moves in the next-generation biofuel field, partnering up in January with Stuttgart, Germany-based Daimler (NYSE: DAI) and Monheim am Rhein, Germany-based Bayer CropScience, a unit of Bayer, on a project to research the use of of jatropha as a feedstock for biodiesel production (see Daimler, ADM, Bayer to look at jatropha).

The Daimler-led project plans to look at developing production and quality standards for jatropha-based biofuel. Jatropha can be cultivated on barren land, so it does not compete for land that is being used for food production.

Lansing, Mich., biotechnology firm MBI International and Hadley, Mass.-based SunEthanol also announced a cellulosic ethanol team-up today, partnering to scale-up a fermentation method for the next-generation biofuel (see SunEthanol, MBI in cellulosic ethanol partnership) MBI International is part of the Michigan State University Foundation.

ADM said corn stover is usually left on the field after harvest where it can help reduce soil erosion and build up soil organic matter. The company said that according to U.S. Department of Agriculture forecasts, in 2008 farmers will harvest 12.3 billion bushels of corn, resulting in approximately 290 million tons of stover.

ADM has seven corn ethanol plants in the U.S., with a capacity of 1.1 billion gallons of ethanol per year, with another 550 million gallons under construction.

"Our scale and size of our plants," said John Rice, exec. VP of commercial and production at ADM, in the company's fourth quarter conference call, "does, we feel, make us very competitive in the long term. And we have the logistics capabilities."

"We're a very large supplier."

ADM, Deere and Monsanto plan to look at collection rates of stover on a field-by-field basis to ensure that sufficient stover is left on the soil to reduce erosion and maintain soil quality, as well as tackle the amount of moisture in the stover at harvest that can hinder transportation and storage.

Earlier this month, Sioux Falls, S.D.-based Poet, the largest ethanol producer in the U.S., said it expects to have a cellulosic ethanol pilot plant operational and producing fuel later this year (see Poet to produce cellulosic ethanol this year).

Poet said the pilot facility is expected to produce 20,000 gallons per year from the cellulose in corn fiber and corn cobs starting in the fourth quarter.

Today's announcement from ADM brings together three big names in agribusiness. ADM is one of the world's largest processors of oilseeds, corn, and wheat; Deere is one of the world's largest makers of farm equipment; and Monsanto is a leading firm in bioengineered crops.

Although the price of corn is on the rise, ADM did not disclose if the companies will be looking at any other feedstocks in their research.

The rising price of sugarcane, another ethanol feedstock, has affected the biofuel industry in India, with the government there delaying a mandate for a 10 percent ethanol blend a few weeks before it was scheduled to go into effect (see India to delay October's ethanol mandate). The Indian government is likely to wait until next year to review the new regulation.

Along with its research into biomass and cellulosic ethanol, ADM is continuing its business and expansion in corn ethanol in the U.S.

"We're already blending over the mandate right now," said Rice. "Ethanol is a lot cheaper than unleaded gasoline, so everybody's going to be trying to blend as much as they can."

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