DRIVING IT HOME

CONDE, S.D. Like a dog that catches a car, farmers have the ethanol market and now must figure out what to do with it.

That's the way South Dakota Farmers Union President Doug Sombke sees the world that confronts farmers and cattlemen in a world of $3-plus corn.

While working for state legislation on biofuels, Sombke is a farmer on the front lines back home making the new fuels and opportunities work on his farm near Conde, S.D., 30 miles east and south of Aberdeen, S.D.

"People are worrying about whether we're going to have enough corn. Farmers have been shipping corn out as a raw product, but the railroad cars go both ways," Sombke says.

Sombke is one of the state's most avid proponents of biofuels and one of its biggest on-farm users pushing ethanol and biodiesel mixes to the max.

He also is a proponent of "blender pumps" that would allow consumers to choose their own mixture of regular gasoline and E85, which contains 70 percent to 85 percent ethanol, depending on the season. On Jan. 22, Cenex Harvest States approved the use of the pumps with the Cenex logo attached. That was a big step, and CHS should be commended for that action, Sombke says.

Farmers Union is working on a statewide renewable fuel standard. It would like a 10 percent to start and go to 30 percent by 2012.

"It's something that's faced a lot of struggles in the past, and this year is no different," he says.

Sombke would like to see a blender pump implemented where it's not a mandate but would give consumers a choice. Maybe there'd be a tax incentives for filling stations to add blender pumps.

Another idea being kicked around is that the state Farmers Union would simply create its own ethanol-blended fuel.

"That's where it's going to go," Sombke says. "I don't think it's that far away."

Sombke is on the local Cenex board in Ferney, S.D. Using a blender pump, the station has more than tripled the sale of its E30 fuel and has caught up with the E10 and unleaded fuel volumes. It's a bold new world for farmers an uncertain one.

The Sombke story

Sombke is the fourth generation farming in an area where his great-grandparents on both sides homesteaded in the late 1800s. He lives in the house where he grew up.

Born in 1960, Sombke was the oldest of three children. He graduated from Groton High School in 1978 and started college at the University of South Dakota in Springfield.

"It looked like farming was in my future," Sombke says.

He started with 38 acres in 1979. He soon bought two quarters and rented another two quarters. He developed a 4-H sheep project into a flock of 150 registered Suffolk ewes and bought cattle and feeder pigs.

"Anything we could do, chorewise, to stay busy and make ends meet," he says.

He married Melenie Jones of Groton in 1980. They lived through the poor crop years in 1980 to 1982 and lived through the period of skyrocketing interest rates on loans.

"We were lucky to hang onto what we had," he says, remembering interest rates of 13 percent to 16 percent.

The couple started a family in daughter Nikki in 1984, son Brett in 1986 and twin sons, Bryce and Bryan in 1987. He remembers a number of established farmers going broke during those times, usually because they'd borrowed too much.

"Sometimes I feel like those days are coming back," Sombke says.

One thing that troubles him is that there isn't enough help for beginning farmers.

In 1998, the Sombkes were named South Dakota Outstanding Young Farmer award winners and went on to win one of the four national titles in 1999. Their farm had grown to 2,500 acres.

Besides their farming success, the Sombkes were recognized for community involvement coaching sports, centennial committee, church board.

"That's when I realized we could make a difference," Sombke says.

Ethanol investments

In 1992, Heartland Grain

Fuels L.P. of Aberdeen was started. It was the first ethanol plant in the state at 9 million gallon capacity. In 1999, a plant was built in Huron, S.D., that later was expanded to 30 million gallons.

The Sombkes put about $10,000 into the original Aberdeen plant a lot of money at the time, but the minimum investment.

"It wasn't hard to decide to do it," Sombke recalls. "It didn't take them long to sell the stocks."

For a long time, the Sombkes didn't think they were going to see any money back from Heartland Sombke says.

"Ethanol was struggling," Sombke says.

Things are different today.

"Nowadays, it comes back by the hands-full," he says.

And the political climate has changed.

"People are saying we shouldn't get the 51-cent subsidy from the government anymore," Sombke says. "My feeling is that people like us put money into this a long time ago, and we're finally seeing it come to term. I don't think we have anything to be embarrassed about. We're the ones that took the chance and it worked."

And don't forget, Sombke says, that farmers have socked money into other projects and have lost money packing plants, Spring Wheat Bakers.

"We've been in some things that haven't worked, but if you don't do it, you don't have an opportunity either," he says.

Value-added enterprises are the things that will make farmers profitable, he says.

"We need to climb that chain," Sombke says, noting that he's an investor in the Agraria restaurant that was launched by the North Dakota Farmers Union in 2003. "We've worked hard for our money, and we want our money to start working for us at the same time."

Farmers Union climb

Sombke's grandparents on his father's side were old Farmers Union stalwarts and had gone on many fly-ins to Washington under the leadership of Ben Radcliffe. Sombke himself was inspired by Lee Swenson, the state president in the 1970s and 1980s, who went on to become national president. In the mid-1990s, Sombke got his first taste of lobbying when he went to Pierre, S.D., with a group of cattlemen to push for a state law, requiring better reporting of cattle prices by the packers.

Later, Sombke went on the county board. In 1999, he ran for the state vice president post and was elected, with Dennis Weise of Flandreau was president. But after the first term, Sombke stepped away and focused on his family.

In spring 2005, Sombke announced he would run for state president and ran unopposed.

"I spent six to seven months campaigning across the state."

It was during the campaign that he started promoting ethanol.

It started out as something of a mistake.

Sombke accidentally filled his nonflex fuel 2004 Chevy Trailblazer with E85.

"It ran fine," Sombke says. "I figured it was a 50 (percent) to 60 percent blend, from what was left in the tank."

After that, he started blending it to that level purpose, traveling 5,000 miles in the year.

"I went to district and county meetings, getting to know people. At the same time, I told them we came here with a 40 percent blend. We tried up to 60 percent blend, but the mileage wasn't that good. The 40 percent seemed to be the most efficient.

He ran unopposed and doesn't know how the ethanol issue affected his popularity.

"But I do know people were interested in it," Sombke says. "People knew I wasn't afraid to look outside the box."

On-farm with biofuels

In fall 2005, Sombke was able

to convince the Ferney, S.D., co-op which wasn't yet selling E85 at its own pumps to deliver 500 gallons of a 30 percent ethanol blend to his farm. Now, he has two tanks, so that he still can fill his son's 1974 pickup that doesn't have an electronic ignition.

"I rode with them to show them where to get it," Sombke says of the E85. "Of course, I had to pay the trucking, but no one wanted to take a chance that it would work."

A curious thing: Sombke gets his ethanol in Aberdeen to get the small volumes. Also, the Heartland plant passes on the 51-cent producer subsidy to the consumers or co-ops that buy from them.

Meanwhile, Sombke also was taking a chance on biodiesel.

Arlie Hanson, a neighbor up the road, has a mechanical oil extruder at his Agri Services business near Claremont, S.D. (He's planning to expand the business to a 5 million-gallon per year plant, under the name Natural Gold L.L.C.) Sombke started buying Hanson's soy oil in 2002, using a 10 percent blend initially in his farm vehicles.

"The main reason we tried it was we were using the byproduct soy mash as a product for feeding the lambs," Sombke recalls.

Eventually, Sombke bumped up the blend to 20 percent and then 30 percent. "Last summer, we were running 50 percent soy oil and diesel fuel," he says. "Arlie runs it at 100 percent in the summer."

The blend is reduced to about 10 percent in the winter to avoid gelling.

"It's the strangest smell like someone frying something," he says.

The farm uses about 18,000 gallons of diesel, among the trucks, tractors and combines. About 10,000 to 12,000 of that is dyed, for farming.

From DDGs to syrup

The Sombkes have gotten bigger into background-feeding cattle as the farming has grown. They have 200 head of their own stock cows and have some 30 head of registered Angus cows. They feed the calves to full term or close to it and feed some cows through the winter for an individual from Oklahoma.

"We breed them here, and he takes them to Oklahoma and sells them as bred cows," Sombke says.

"Before the ethanol plants, the best way to market your corn or grain was through the livestock," Sombke says. "With the ethanol plants, it's looking better to market the corn through the ethanol plants and then buy the feedstuffs back from them and run them through your livestock. That's what's been working pretty good for us."

Initially, Sombke tried feeding distiller's grains at various moisture levels. The first mix was 25 percent moisture and went to 70 percent.

"That stuff was like cow pies," he chuckles.

The cattle loved the smell of it and would come to the feed bunk even on the coldest days.

Eventually, the Sombkes got away from using the dried distiller's grain or the wet distiller's grain.

Instead, they feed the syrup. A trucking firm out of Montevideo, Minn., delivers it for them. The product comes in at 160 to 180 degrees and goes into polyurethane tank in a shed, equipped with re-circulators to avoid crust-

ing or settling.

"We pay so much a loaded mile for it, but the product itself is really inexpensive," Sombke says. "You can take some real poor quality hay and turn it into a good quality feed."

The hay is ground and goes into a feed wagon.

"You pull the trailer under the hoses and put the syrup into the feed wagon," he says.

Ethanol's way forward

Sombke says it is troubling to him that some people are beginning to worry about the competition between the food market and the fuel market.

"We don't eat field corn," Sombke says. "After we take the value in the corn for ethanol, we still fed cattle with the byproducts."

With the U.S. fighting terror and the al-Qaida around the globe, Sombke thought farmers could blend their own fuel.

"With a blended fuel, people have their choice," he says. "You're not mandated to use 10 percent ethanol; you're mandated that you're using 90 percent petroleum," he says.

"I just think if every farmer would do just like I do use 30 percent ethanol and up to the 50 percent biofuel in the diesel fuel how much difference would that make in the use of petroleum across the globe? What would that do to our dependence on foreign oil? Don't kid yourselves; we're one of the biggest users of petroleum."