Our Path Ahead

Happy New Year!

2026 is shaping up to be a challenging year for many of our members from a financial return perspective. When this happens, it typically translates into a challenging year for your Cooperative as well.

We are up to the challenge. We continue to look for opportunities to be efficient and effective with our resources, which ultimately benefits you. Two opportunities our Agronomy team has developed are ‘kernel boost’ and ‘micro boost’.  These products were designed for our geography to enhance yield at a competitive price point.  Check these out; you can learn more about these value-added products in the Agronomy section.

We are used to challenging times in agriculture. We see periods where production outpaces demand. Low prices persist, which generally results in improved demand over time – our typical cycle. Many of you have been through multiple cycles. There is a debate today: are we seeing a structural shift in the cycle? Perhaps, said another way, could we see a prolonged down cycle? This thinking is being driven by South American ag production. The belief is that increased production continues even in the face of low prices. The growth in South America has come from increased double-cropping, higher yields, and more acres. The economics of a double-crop bean/corn rotation are interesting. Spending some time in Brazil last year was beneficial in understanding this.

I believe that trend line yields will increase in both the US and Brazil. Also, I believe that we will see Brazil increase acreage in a material way in the next several years. This creates a situation where we need to find additional demand now.

Low-carbon fuels appear to be one of the best opportunities for us to increase both corn and soybean demand. It is part of the motivation for our ethanol expansion at Pine Lake Corn Processors (PLCP).  The investments we have made with Combined Heat and Power and Heat Recovery have lowered our CI score, and the market is rewarding us for those investments. We also believe this expansion has a meaningful impact for our members, improving corn basis,  positively impacting land values, and having a member be a part of the value-added income stream.

Lowering carbon scores for ethanol also puts us in a position to be a part of the renewable aviation fuel market. This is a 100 billion-gallon market, so capturing just 5% would have a tremendous impact on agriculture. One path to lowering our Carbon Score is sequestering carbon. We don’t have the geological formations around the plant to direct inject, so we're left with transporting this carbon by pipeline. Understand the concern with eminent domain; it appears there will be legislation in Iowa to widen the corridor, significantly reducing the need for this. The ethanol market is racing to position itself to lower CI scores. We need these opportunities in Iowa to stay competitive and ultimately find additional demand for our members.

Thank you for your business and partnership with IAS. We will continue to look for opportunities to put you in a stronger position. Our ethanol expansion, agronomy offering of micro boost and kernel boost, are all examples of this. Looking forward to the year ahead.
 
Good days ahead,
Ken