Western Producer reporter Sean Pratt attended the Commodity Classic, a gathering of 4,000 American wheat, corn and soybean growers in Florida last week, to see what Canadian farmers might expect from their southern neighbours.
TAMPA, Florida – One burning question has hounded the U.S. corn industry since mid-summer 2006.
“Everyone says, ‘will we have enough corn?’ ” said Paul Bertels, director of biotechnology and economic analysis with the National Corn Growers Association.
With heavy new demand emanating from the ethanol sector in 2006, corn’s traditional customers in the livestock industry wonder if there will be enough crop to meet their needs in the coming year and further down the road.
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Trade issues existed long before U.S. president Donald Trump and his on-again, off-again tariffs came along, said panelists at a policy summit last month.
The answer is a resounding yes, said association president Ken McCauley.
“The media hype, to me, has been exaggerating some of the demands that we see and making the livestock industry more nervous than they should be.”
He contends a combination of increased acreage and steadily improving yields will allow the corn industry to meet all of its short and long-term domestic and export requirements.
Bertels said forecasters are predicting 83.2 to 88.4 million acres of corn in 2007, up from 78.6 million acres in 2006.
Using United States Department of Agriculture projections of 85.8 million acres for 2007 and 89.1 million acres for 2008, there would be enough corn to meet food, feed, fuel and export markets with one billion bushels of carryover supply in both years.
The long-term outlook is similarly bullish. McCauley said American corn farmers should be producing 15 billion bu. of the crop by 2015.
The USDA predicts the ethanol industry will be producing 15 billion gallons of the alternative fuel by that time, eating its way through five billion bu. of corn annually.
That leaves 10 billion bu. of the crop for food, feed and export plus another 1.5 billion bu. of corn-based distillers dried grains with solubles, a byproduct of the ethanol making process.
Put the two together and it amounts to the total current corn production.
It should be noted that the corn industry’s projections are predicated on a yield trend line that outpaces what has been forecast by the USDA, something independent analysts feel is entirely possible.
But on the flip side, the corn industry’s estimate relies on the USDA’s ethanol consumption forecast, which some groups think is far too conservative.
The USDA assumes 3.7 billion bu. of corn will be consumed by the ethanol industry in 2008-09.
The American Farm Bureau Federation thinks that number will be closer to 4.9 billion bu.
McCauley is forecasting 86 to 88 million acres of corn in 2007, which is at the top end of industry estimates. He is confident that corn growers are up to the challenge of meeting all new and old sources of demand.
With corn prices topping $4 US per bu. for the first time in over a decade, there is once again good money to be made in growing the most popular commodity crop in the U.S.
“We have never told our members to plant more corn into a higher price because usually that means you drop the price.”
While the association is still not telling growers what to do, it is issuing forecasts calling for seven to nine million extra acres, an incremental increase that at the top end amounts to the size of last year’s entire Canadian barley crop.
The USDA estimates much of that increase will come at the expense of soybeans, which are forecast to decline by 4.6 million acres. McCauley thinks the drop in soybean acreage will be even more precipitous.
