Farm & Ranch Guide: North Dakota's Ag Newspaper

Despite drops in the estimated the amount of corn consumed by U.S. ethanol production in the 2006/07 and 2007/08 marketing years, strong export demand will minimize the impact, according to the World Agricultural Supply and Demand Estimates report released today.

“The growing ethanol industry has been critical to corn producers’ profitability, but a diverse customer base is essential to the long-term success of U.S. farmers,” noted Ken Hobbie, president and CEO of the U.S. Grains Council.

“A slower start-up pace for new ethanol plants and declining use of capacity at existing facilities led the USDA to lower their estimate of corn use for ethanol by 100 million bushels for the 2007/2008 marketing year. The estimated 2006/07 corn for ethanol use was also lowered by 25 million bushels,” said Hobbie. “Those are big enough changes, which could be worrisome for U.S. corn growers if export markets were not expected to consume 20 million more bushels in 2006/07 and 100 million more in 2007/08 than USDA had previously thought.”

USDA predicts the 2007/08 corn crop currently being harvested will reach 13.3 billion bushels, a production record. In addition, exports of U.S. sorghum and barley in 2007/08 were increased by 20 million bushels and 5 million bushels respectively. U.S. barley, corn and sorghum exports were the driving factors behind an increase of global exports of coarse grains to 112 million metric tons.

“It wasn’t long ago that we heard a few folks questioning the importance of export markets to the U.S. grain industry as ethanol production grew and used more corn,” said Dale Artho, USGC chairman. “The Council kept the future success of our industry in mind as we continued our work to promote U.S. grains and grain products such as distillers grains around the world. With the largest U.S. corn crop coming in, where would we be if those millions of bushels were still in storage?”

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