This is the August 27 edition of the closing market report. Happy anniversary to my lovely bride, Claire Ann. Coming up, we're going to talk about iFab as well as bio fuels and bio products. We'll do that in just a moment. Remember that we're here at the Farm Progress Show.
Todd Gleason: 00:18You can come visit us in the Farm Progress Show tent. We're just to the right of the main gate about a block. In fact, you can't miss it. When you're walking in, you will see the giant sized orange gable that says college of aces on the end of it. When you come in that main gate, turn to your right and come down about a block and visit us.
Todd Gleason: 00:36We're here all day. The stage shows happen all day long. Tomorrow morning, we'll record commodity week at 09:00AM, and we'll have our panelists with us, Matt Bennett of agmarket.net and Arlen Suderman of Stonex. Be sure to drop by and see us. We'll record that and then it'll be posted to the website at willag.org, willag.org, by probably about 04:00 tomorrow afternoon.
Todd Gleason: 01:05Todd Gleason's services are made available to WILL by University of Illinois Extension. Well, let's begin our program this afternoon. We'll talk a little bit today about IFAB again. We have four guests with us. They include the Rodney Weinserl.
Todd Gleason: 01:20He's the executive director of the Illinois Corn Growers Association. Ismael Neves is the general manager of iProof. That's a permanent. If you don't know what that is exactly, he'll tell you more about it, but it is the successor of A. E.
Todd Gleason: 01:34Staley in Decatur. Ramon Bolero is here. He's the dean of the U of I College of Aces and Beth Connerty is with us from IFAB, the Regional Innovation Officer. Thank you all for being with us. I think Beth, I'll start with you because I want to learn a bit more about IFAB.
Todd Gleason: 01:50Can you tell me exactly what this is? And the corridor that exists between campus in Urbana and here in Decatur and what the expectation over time might be?
Beth Connerty: 02:03Absolutely. So iFAB is the Illinois Fermentation and Agriculture Biomanufacturing Tech Hub, which is quite a mouthful, but very very descriptive of what we are doing. So we are a consortium of 34 partners trying to grow biomanufacturing and fermentation here in Central Illinois. You're right that the the corridor that we cover, the region that we are really focused on are three counties here in Central Illinois. Champaign County, Piatt County, and Macon County.
Beth Connerty: 02:36Because as a as a University of Illinois, College of ACEs employee, there's no better place to do the research and innovation around new new technologies in this space. And then we have great partners with, premiums, ADM, and synonym, in in Decatur, Illinois. And so we are really focused on growing that, for new markets for agricultural commodities.
Todd Gleason: 02:59On the East End, this is anchored, Herman Bolero, the dean of the College of ACEs, by the campus, University of Illinois, IBRL in particular. Can you tell me how this is supposed to work with campus as research and development happens, and then the entrepreneurial spirit that goes along with it.
Germán Bollero: 03:20Yeah. I think it's, you know, that when I look at IFAB, IBRL, the partnerships with, stakeholders is clearly you're looking at the land grant mission. It starts with the work that we do on the bench in terms of the research with bioengineering ease that will do precision fermentation, which is what we can do that on the bench in the labs. We can scale that up in IVRL, and we can work with partners to even bring it to greater a level. So for us is from the from the research point of view, that's excellent for us, but also from the teaching point of view, you know, from the education and the development of the workforce for the future for this industry, it fits really well for us because everyone of the students can have experiences within IBRL, could take classes of people that are working in these areas and they learn from internships or connections that we have with industry.
Germán Bollero: 04:18So that's I think when I when I think about this project, I think of the reason we have Langdon University. So and of course, on top of that is what extension does in terms of extending what we learn through all of this process.
Todd Gleason: 04:31So Ismail Nibs from premium. First, can you tell me about premium, some of the background and history and how you acquired the original A. E. Staley and what you're expecting to do. And then you are working particularly with a project called iProof and I'd like to know about that.
Todd Gleason: 04:50But let's start with just premium itself.
Ismael Nieves: 04:53Yes. So Premium has been around, for about three years now as the name goes, with the name itself. We're a shoot, off of Taina Lisle. So we came out of, Taina Lisle and it became Premium. However, the facility has been running for more than a hundred years.
Ismael Nieves: 05:09Right? It started with Ace Daily manufacturing back in the nineteen twenties. It became Tinnel Lyle in 1988, and now we've been premium the last three years. We're based in Decatur. We have a facility in Decatur.
Ismael Nieves: 05:22We have several other facilities across the Midwest. One in Tennessee, in Illinois, in Ohio as well. And we wanna be a world leader in producing and making products sustainable and renewable products based from from plants. Our main raw material is the yellow dead corn that we use to make sugar, acidulants, industrial materials, other things. IProof itself is a facility where we're trying to fill the gap in the bio economy or in the bio industrial space as a whole where there's not enough facilities within The United States that are at this camp.
Ismael Nieves: 06:05And iProof stands for Illinois pilot research and operations optimization facility. So it is a mouthful. But hence the the nick the the the short version iProof. So iProof itself, what we're trying to do is fill the gap in biomanufacturing space because right now there is facilities like IBRL that can bring a technology up to a pilot scale. But there's not enough facilities within The US to fill the gap towards commercializing whatever is being developed at the at the bench scale.
Ismael Nieves: 06:39So iProof itself is providing that opportunity so that we can become a hub for biomanufacturing here in The Middle East.
Todd Gleason: 06:47Can you tell me how this fits in? Because premium still takes in grain. Can you tell me how it fits into what farmers producers think of as the Tate and Lyle side of premium, which is in their hometown, they're delivering grain to in the fall. And then how iProof fits into that? Yes, of course.
Ismael Nieves: 07:08So iProof fits into that by providing sort of a venue to commercializing and diversifying what we can do with a grain of corn. So right now, for example, we take we use everything that we make in the grain of corn. However, we wanna diversify that as much as possible to continue to add value to some of the products that we can make out of that grain of corn. By working in the bioeconomy and expanding the bioeconomy here in the Midwest, the Midwest itself, there's no reason why it can become like the hub for bio manufacturing and the bioeconomy in general for The US because this is where all of the raw product is being made. So by diversifying what we can make out of the grain of corn, we add value and we ensure the stability of that product that the farmers are making.
Todd Gleason: 07:59Rodney Weins Earl is the executive director for the Illinois Corn Growers Association. When you talked with your farmer board and said, we want to be involved in some way, what decision was made to be involved? So,
Rodney Weinzerl: 08:16Todd, new uses has been a part of our organization for several decades. I can attest to that. And maybe backing up a little bit, you know, corn Illinois is just a perfect place to grow corn. I don't know if a lot of people realize it, but yields in Illinois are actually accelerating. So we hear a lot about climate going on and all that.
Rodney Weinzerl: 08:41And if you look at the last twenty years of data, you'll actually see yields in Illinois are actually accelerating, which is very interesting when you think about the narrative that's out there. But corn, it's it's strength really is starch production, which is a great feedstock for what the folks here at University of Illinois are doing and our wet millers. And we just heard wet milling is a very old technology, but it's still used for a whole host of things. So from a feedstock standpoint, the dextrose that we get from corn from starch conversion and now actually a lot of discussion about using ethanol as a feedstock within the whole petroleum complex to produce value added products are both are all things that, what's going on in iPad can be very helpful with.
Todd Gleason: 09:28So Beth Connerty, I wanna come back to the idea about this corridor that exists now from Urbana to Decatur. It is a learning corridor. It is a research corridor. But it's also an economic development corridor. Is that the case?
Beth Connerty: 09:47Absolutely. I mean, no better place to do ag research than the University of Illinois and the college bases. But also there's no place in the world that that grinds as much corn on a daily basis as as Decatur, Illinois. So so like Dean Valero was saying, everything from that research to manufacturing already exists. Then when you start to think about new companies and new economic development opportunities, what better place to tie into all of those resources?
Beth Connerty: 10:16So we have the university that can help advance their science, advance their technology. We have partners like our industry partners in Decatur that can provide feedstock. We have a lot of farm ground. A lot of that feedstock is coming from right here in the region. And then if you're thinking even further about the things that need are needed to build manufacturing, utilities.
Beth Connerty: 10:40They may not be exciting but wastewater treatment, electricity, sewage, rail transportation. Those are all critical infrastructure pieces to build out new manufacturing opportunities and those all exist here in in Central Illinois, in large part thanks to our industry partners in Decatur. So as these technologies advance, as companies are looking to build manufacturing sites, we want Central Illinois to be their destination.
Todd Gleason: 11:07On the education side, I suspect that you look at this, Dean Bolero, and say to yourself, we're involved in the research, but really we need to be able to provide a workforce and maybe the entrepreneurial side of that workforce that can help to develop new products for Illinois and the nation, the world as well. And I'm wondering how you think about this in that terms, in those terms and potentially what happens in Research Park on campus and whether there is an existing tie that will continue to push all of these together.
Germán Bollero: 11:46Yeah. Absolutely. I think, having Research Park on campus is a a is a great thing for us, especially as incubators of, potential companies that could come come out of that. Think that, you know, the university provides the environment for discovery, for innovation, in all the areas again from the bioengineering to the fermentation to new products. And I think the research part provides the opportunity to incubate new companies.
Germán Bollero: 12:13I think a lot of our students are taking some of those classes. They may participate in IBL. They may have their own ideas of how to to move the industry forward. Then we yeah. That we we as a campus are an incubator of innovation by itself by bringing all those students in
Todd Gleason: 12:28on campus. Then in Decatur, iProof hopes to be an incubator to to continue that process to create, I assume, new companies or companies that will be acquired eventually. Correct.
Ismael Nieves: 12:44And the intent is, as I mentioned, to bring economic development to the area and to bring new new companies to the region. And we are providing that gap in there. I think a collaboration with IBRL and with IFAP, for example, will be will probably be the only, to the best of my knowledge, the only ones that will be able to provide an end to end solution to clients coming in. Meaning, they can develop their process early on, so early stage development, right, all the way to pilot scale, through demonstration scale, and then commercialization with premium as a partner, for example, or some other company in the region. So what we're trying to do is fill that void, that in between, that pilot scale and commercialization, which right now is a big gap that is preventing or it's making it very challenging for some companies to get to that commercialization stage.
Todd Gleason: 13:39Yes, may I like to plumb your mind for just a second because you are the researcher on the stage with the background in this area. Biofuels to begin with, if I remember correct, but we're talking about other kinds of things. Bioproducts that are coming from corn. What are your expectations at this point? What are the possibilities?
Ismael Nieves: 13:59The possibilities are endless because there is a very large number of different products that can be made. So from cosmetics, from food products and food ingredients, to biofuels and chemicals that are used to develop other products as well. So we already have, for example, partnerships with other companies. We have Covation in Tennessee and we have Sustania that is coming on online. Those are facilities that are already making products, bio based products from from the sugar that is made from the corn.
Ismael Nieves: 14:30And those companies are already making chemicals that are distributed within the different product lines already. So so what we're trying to build or what we're trying to do is continue on that trend and continue to build new companies. And in my mind, the sky is the limit because there is a a very large number of possibilities and different areas that you can go into.
Todd Gleason: 14:54Rodney's mind, sir, you've been executive director long enough to remember the nineteen nineties and the February. There were pushes to begin with in the nineties, probably the eighties as well, for ethanol production What are saying? Across I remember them too, Rodney, so it's fine. Across The United States, particularly here in the state of Illinois because we have ADM and Decatur and production of ethanol was there to begin with. Not nearly as big as it is now, but it was there.
Todd Gleason: 15:26And then there was this push in the February, to create an environmentally sustainable biofuel, which you and the corn growers were very involved in. And I'm I'm going to ask you the question, are the corn growers going to be an upfront spokesman for this kind of function, this corridor development? Will there be that kind of push from corridors here and other parts of The United States, do you suppose?
Rodney Weinzerl: 15:56Yeah. I think there's kind of two phases as I think about new uses. You know, we have the ability to produce a lot of products that are very high value, somewhat limited production. So we need like a lot of them. And I think that's where this corridor really works for that.
Rodney Weinzerl: 16:15The other side of it is if you think about ethanol, it really took off in 1978, kinda hung around in the early eighties. But today, we probably invested about 45,000,000,000 in ethanol plant capacity. We have 200 plants in the nation. And if we think about the 5.3, 5,400,000,000 bushels of corn used by the industry, we had that in yield growth over the last twenty years. So we literally are still dealing with the same carryout things that we had back in the eighties.
Rodney Weinzerl: 16:49And we had increased production by that magnitude. So when we think about the new products, you know, we need a 100 products that are using 2,000,000 bushels of corn, you know, to get to the numbers across The United States that we're gonna need over the next couple decades. So there's lots of room. There's lots of stuff that needs to be done. We're replacing petroleum.
Rodney Weinzerl: 17:11Sometimes that's an interesting dynamic in the world that I would I work in. But, yeah, there's lots of opportunity here. We have all kinds of assets within this region, this corridor to capitalize on that.
Todd Gleason: 17:25The difference, Dean Valero, is this time around, instead of one product, you're looking at a multitude of products that we don't know about yet, and it will take a lot of research from the University of Illinois to make that happen.
Germán Bollero: 17:41And we're we're we're excited about that. We're ready and we got a lot of talented individuals on campus. We got Beth here that is leading a lot of that effort, and we're very excited about taking the challenge on. Beth, how do
Todd Gleason: 17:54you envision this unfolding over a decade?
Beth Connerty: 17:57Oh, I mean, our tag line or what we are saying is that we are making Central Illinois the epicenter for bio manufacturing over the next decade. We really think that there is no place better in the world. This has been substantiated by research. That there is no place better in the world to build this economy than in Central Illinois. Our grand vision is that all of these companies that are making the new products and using corn starch locate here.
Beth Connerty: 18:22They build manufacturing here. They hire University of Illinois and College of Aces students.
Todd Gleason: 18:28Remiant will be at the front
Ismael Nieves: 18:29of the list to hire those students, I take it. Of Of course. We're actually working together with IFAB and the University of Illinois to establish to help with the workforce force development by providing internships and providing opportunities for the students that come out of there so that we can build the work force necessary for these bio manufacturing companies to come in and build their facilities here. Yep.
Beth Connerty: 18:51He has already hired two of my students. So I just have to plug that. Thank you.
Todd Gleason: 18:57If you had to guess, how long before you have a first viable product or do you already?
Ismael Nieves: 19:04Well, as I mentioned, we already have viable products. We have a probation facility that it's in in Tennessee, and we have another facility in Indiana that is Sustania that is breaking ground in 2026, start being built there. So we already have products that are being made. We just need to expand on the portfolio of the different chemicals that can be made because the sky is the limit as I mentioned. And we can drop in these chemicals that are more sustainable and that add to the basically, national security, right, because they're being made here at home.
Todd Gleason: 19:40Give these folks a nice round of applause. Thank you very much to Beth Connor, to Ismail Nieves, Rodney Weins Earl, and the dean of the college of agricultural consumer and environmental sciences, Herman Valero. Of course, you've been listening to the closing market report on this Wednesday afternoon. Be sure to visit our website, willag.0rg, where you can download the program, listen to it anytime you'd like, or you can search out the closing market report on your favorite podcast application. Also on our homepage, willag.org, you'll find information from the crop scientists, the animal scientists, and the agricultural economists from right here on the Urbana Champaign campus of the University of Illinois.
Todd Gleason: 20:21Of course, we're coming to you from the Farm Progress Show today. Be sure to visit us tomorrow inside the gate to the right about a block. Look for the great big orange College of Aces banner. One more item before I let you go for the day from the Farm Progress Show. I spoke with Kelly Hunt, the CEO of Farm Credit Illinois, and asked her this question from the stage.
Todd Gleason: 20:50Because Farm Credit is semigovernmental, I'm I'm roughly speaking, I I need to ask a secondary question as it's related to local banks, and how farm credit takes on more of the load potentially in years that aren't as good or at in riskier times than maybe some local or other banks might be able to do in in relationship to agricultural loans.
Kelly Hunt: 21:17Farm credit on a national level holds about 45% of farm debt across the country. I always like to enter this conversation by saying, first, we partner with community banks in many of our programs and in many ways. Agriculture needs farm credit and community banks for the scale to really serve that holistically. So we do partner. We have a lot of our programming where we're able to come in on the backside and work with community banks.
Kelly Hunt: 21:44But like you stated, community banks are serving lots of different industries, They might open or close their valve to agriculture. Farm Credit Illinois exists to serve agriculture. We don't flex in that way. We're here to serve in the good times and the bad times and the challenging times. That's really where we think we can shine.
Todd Gleason: 22:06Thank you for joining me today. I appreciate it.
Kelly Hunt: 22:08You bet. Thank you.
Todd Gleason: 22:09Kelly Hunt is the CEO of Farm Credit Illinois. They service the bottom half of the state of Illinois. One final item today because this is my thirty seventh wedding anniversary. I am often told by listeners that they like to listen because I think like a farmer. I'm going to chalk that up actually to my wife, particularly in the last ten years when my father passed away.
Todd Gleason: 22:37Of course, Claire Ann and I inherited a farm. By the way, her name was on that document when it was inherited because my father believed that should be the case. And I told Claire Ann that we should probably cash rent it because in downtimes, we would make more money. She simply looked at me and said, but won't you be better at your job if you learn how to market? Thank you to Claire Anne from you and from me.
Todd Gleason: 23:05She is the love of my life.