East Central Indiana Agriculture Economic Development Summit

1
East Central Indiana Agriculture Economic
Development Summit

• Opportunities for Indiana Agriculture
• December 7, 2005

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Agenda

• Vision for Indiana Agriculture
• Indianas Strategic Plan for Agriculture
• Key Strategic Initiatives
• Bioenergy
• Livestock Expansion
• Diversification

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AgricultureIn the Midst of a Revolution

• Agriculture in the next ten years will
• Become larger and smaller
• Larger operationstraditional commodities
• Smaller operationshigher profit, diversified
  operations
• Transform issues into opportunities
• Animal waste becomes power and odorless
  fertilizer
• Conservation programs continue to improve
  environmental impact
• Management practices technology will drive
  coexistence with non-farm neighbors
• Indiana has a great chance of leading this
  revolution

4
Indiana Agriculture and Livestock Vision

• To become the global leader in food and
  agricultural innovation and commercialization

5
Indianas Strategic Plan for Agriculture

• To be the global leader in food and agriculture
  innovation and commercialization by

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3 Prong Plan for GrowthOn all Strategies
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Bioenergy is attractive because

• Reduces reliance on foreign sources of energy
• Produces a productive use for ag by-products
• Example Animal waste turns to electricity
  through anaerobic digestion
• Indiana has many natural advantages
• Example Close to major demand Eastern
  Seaboard
• Could make rural communities energy independent
• Example BioTown, Reynolds, IN
• May be cheaper
• Example E85 sells for 0.30-0.50 below
  traditional gasoline

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Overview of State Initiatives

• Production
• Ethanol, biodiesel, other forms
• Promotion, usage and sale
• Bio-Town, education, E85 program
• Innovation
• Research, development
• Legislation
• Production credits, usage incentives

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Production

• January 2005 Indiana had one ethanol facility
• Today, we have
• 18 new ones in process 6 of those already
  announced
• 4 biodiesel plants in process 2 announced
• Working closely with large farms to test
• Anaerobic digestion to make electricity (Fair
  Oaks, IN)
• Gasification to make electricity or methane (NC
  State)

10
Bio-Town USA, Reynolds, IN
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Education and Usage

• Governor and Lt. Governor modeling success
• RV1 runs on biodiesel LGs Tahoe runs on E85
• Working with Industry Partners (e.g. Soybean
  Board)
• General consumer education
• Unique programs
• Kicking off expanded E85 Program in October
• Only 12 pumps in the state today (Minnesota has
  170)
• 1.1MM grant from US DOE
• Will pay for E85 pumps around the state

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Expanding LivestockA Key Opportunity

• Livestock has a large impact on the economy
• Direct investment and a 2-4x wage multiplier
• Meat consumption continues to grow
• US demand growingPork 3-4, Poultry 4-5
• Pork fastest growing US ag export (1990 was 1.6
  of US production, now 8.6)
• Lost market share in the last 10 years
• ?20 reduction in hog inventory

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Expanding LivestockA Key Opportunity

• Infrastructure and processing capacity
• Can reach 67 of US population in 24 hours
• Most pork and poultry processors are expanding
  and bringing more animals in from out-of-state

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Grow Production

• Conducting economic study for optimal growth
• Initial phase complete
• Phase 2 done by 12/31
• Identifying Indiana and out-of-state producers
  wanting to grow
• Mostly large operations (2,000)
• Working with processors on expansion plans
• IPC Increasing capacity by 33 (Delphi)
• IBP (Logansport)
• Swift (Jeffersonville/Louisville)

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Advance New Technology

• Odor Reduction Task Force
• EPA determining what, if any, emission regulation
  is required
• Summarizing key drivers of odor and existing
  technologies (no silver bullet)
• Technologies showing most promise are
• Anaerobic digestion
• Improved management practices
• Task force immediate goals
• Identify 2-3 technologies meriting further tests
• Use States Livestock Promotion Funds to pay for
  test costs

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Make Policy Recommendations

• Long term commitmentpromote policy which
• Fosters growth
• Makes regulations streamlined and science-based
• In 2006, we develop and test two new voluntary
  programs (for potential 2007 Session)
• Certified Livestock Producer Programhigher
  standards with a reward
• Livestock Friendly Area Designationaligning
  local interest with growth

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Diversified FarmingNew Opportunities

• Commodity agriculture increasingly concentrated
• 3 of Indiana farms produce 68 of the outputand
  growing
• Diversification is key to profitability for
  smaller farms
• Organic natural (200 cows sustainable income)
• Fruit vegetable (tomatoes increased profit
  vs. corn)
• Contract growing (contract hogs 30K reliable
  income)
• Ag Tourism (corn maze significant profit source)

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DiversificationGo Forward Plan

• Identify the Faces of Indiana Farming
• Research complete by 1/2006
• Sets the stages for targeted plans
• Dedicated Diversification Project Manager
• Develop transitional tools
• Test concepts in 2006
• Potential Legislation in 2007
• Economic rewards for profitable diversification
• Indiana Food Ag Venture Fund

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Indiana AgriculturePossibilities Unbound

• Agriculture is the foundation of Indianas
  economy
• Agricultures transformation Big opportunities
  for IN
• Agriculture A driver of rural Indianas
  come-back
• Growth and leadership will come from
• Expanding processing and production
• New technology
• Pro-agriculture legislation and governance