Posted on 11/02/2006 6:59:01 AM PST by thackney
One could argue that there was a shortage of corn before this year's harvest even began. As of Oct. 1, 105 ethanol plants dotted the U.S. landscape, with a combined ethanol production capacity of 5 billion gallons.
The Renewable Fuels Association tells us there are 42 more plants under construction and 7 plant expansions underway. Those efforts will add 3 billion gallons to the U.S. ethanol production capacity. Looking further down the road, there are more than 300 business proposals for additional ethanol plants. If those are built, it would add more than 20 billion gallons of ethanol.
Keith Collins, USDA chief economist, says in 2010 90 million acres of corn will be needed to fulfill ethanol, livestock and export demands. He says corn prices would need to be in the $3.10 to $3.20 range to attract that many acres to corn. Corn futures for 2007 are pushing close to those levels, indicating that the price signals have begun to entice a substantial increase in corn acreage. "But where will that acreage come from?" asks Chad Hart, Iowa State researcher.
"The last time this country planted more than 90 million acres of corn was in 1944. In 1932, over 113 million corn acres were planted," he notes. "In that year, Texas was the sixth largest and Georgia was the tenth largest corn producing state, with nearly 10 million corn acres between them. So a historical analysis would indicate the possible return of corn acreage in the Southeast and Great Plains."
But the prospects for more corn acres in the Southeast and western Great Plains is much lower today. Large amounts of land planted to corn during those earlier decades is no longer in agricultural production. In 2006, Georgia corn producers planted 280,000 acres and Texas had 1.75 million acres. Total cropland in Georgia is now less than 5 million acres.
Due to population and land use, the upper Midwest and the eastern Great Plains are the mostly likely candidates for expansion, says Hart.
One potential pool of acreage is in the Conservation Reserve Program. However, it appears that only 7.7 million acres are scheduled for release, much of which is more better suited for wheat than corn. "So while some CRP land can be brought into corn production in the short term, CRP acreage will only be part of the shift," he notes.
The most likely source of new corn acreage will come from shifts in crop rotation from soybeans to corn. That raises the question of whether the two-year rotation between corn and soybeans will disappear -- which also will reduce annual yields. Hart believes a three-year rotation -- two years of corn followed by one year of soybeans-- could surface.
"Given the crude oil price outlook for the next several years, ethanol’s expansion is apt to continue for some time," says Hart.
As Collins points out, ethanol plants can compete for corn even at record high corn prices. Other corn users, such as livestock producers, other processors and the export market will feel the pinch. Certainly more corn acreage will be found, where that will occur, whether it will be enough, and what else will be displaced, is a long and evolving scenario.
No, where will the water come from, for all that corn???
and in 5 to 10 years when the enzymes that enable us to switch from starch based ethynol production to cellulose based; these plants will be worthless.
Another great boondoggle we rushed into.
I was going to post something really tacky but thought better of it.
Had to do with African hunger. I'll let it go at that.
90M acres is an awful lot of fertiliser...and run-off.
The great part of the free market is that it will all work out in the end.
Africa has a lot of land, teach them to grow their own corn.
--gee whiz--I should be long in seed corn futures--
I wish it was free market instead of government subsidies and mandated quantities.
How Will the U.S. Feed the Ethanol Appetite?
buy it from Brazil
Good thing ethanol is made from more than just corn!
this is a total f''''' lie.
the liquid fuel energy gain, is more than
ten to one, I''ll post the link to the Argonne
National lab study, if anyone asks
Since we already produce more ethanol than Brazil, it is going to be hard for them to meet our growing need. They will try no doubt, but Brazil government also just raised the minimum ethanol content in their gasoline to 23%.
Post away.
No kidding. The aquifers in the plains and midwest are not limitless.
In any significant percentage of the total ethanol produced?
I am from Iowa....and we still pay farmers for not planting..and not planting on bad land...this will all change....not only will corn go up...but so will beef and pork and oils....anything that requires corn....I also think that the sawgrass is better for ethanol...and that will open up quite a few acres in other poorer farmland...we are going to be plowing the hell out of the land....kind of like surface mining....and I hope we don't have a big drought like the 30's....
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