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Corn industry experiencing good times, increased production must continueBy Jennifer Bremer With the increase of corn acres in 2007, along with higher prices, corn producers have a lot to be thankful for according to National Corn Growers Association President Ron Litterer. Litterer, an Iowa farmer, said NCGA looks forward to more exciting and important ag stories in 2008, during a news conference at the 2008 Commodity Classic in Nashville, Tenn. "We are excited, especially in light of the National Science Foundation's announcement that a draft corn genome sequence has been completed," he said. Completion of the maize genome sequence will increase breeding efficiency, streamline the delivery of new traits as well as further the recognition and understanding of traits that will enhance corn's position as the ideal crop for food, feed, fuel and industrial uses. This sequencing information has the ability to benefit existing and future research for the U.S. corn industry. The 2007 accomplishments are highlighted by the largest corn crop planted since World War II and the largest ever harvested, according to Litterer. "The 13.1 billion bushel crop will satisfy demands in the feed, food, ethanol and export markets. And the 10 percent carryover will contribute to those market demands this year," he said. Legislatively he praised the passage of the Korean free trade agreement and the Water Resources Development Act, as well as an expanded fuels standard contained in the energy bill. Ethanol and corn prices have continually been blamed for increasing food costs, but Litterer said the price of oil is what is making a difference in the food prices. "A $1 per gallon increase in the price of gasoline has three times the impact on retail food prices as a $1 per bushel increase in corn prices. Yet we continually face the challenges of correcting misunderstandings and mistruths surrounding corn-based ethanol and biofuels," he said. The historic passage of the energy bill also has some challenges ahead as the renewable fuels standard is increased from 7.5 billion gallons to 36 billion gallons, of which 15 billion gallons will be derived from corn. "Now we have to convince people that we can produce enough corn to meet those standards," he said. Next year the renewable fuels standard calls for 9 billion gallons of ethanol and by 2015 corn producers will deliver enough corn for 15 billion gallons. This roadmap for biofuels production gets the industry there through increased corn production, incremental acreage shifts, increasing yields, displacing corn with DDGs in feed rations and increasing ethanol efficiency. Litterer said the next step for ethanol is moving to higher blends. "The U.S. uses roughly 145 billion gallons of gasoline/ethanol each year and in 2008 ethanol will represent 9 billion gallons of that," he said. "By 2012, ethanol will comprise about 10 percent of the fuel market, with 36 billion gallons slated to come online by 2022." To meet these challenges, Litterer said cellulosic sources besides corn will become important in producing ethanol. "We mustn't lose sight of the reality of domestically produced ethanol -- of the fact that corn is the gateway to advanced biofuels or of the fact that our current energy staple--oil--is becoming more expensive to extract and is a finite resource," he said. Volatility in the corn and ethanol market has been displayed in the past year as corn prices are up 40 percent in January 2008 as compared to January 2007. "Since 2000, season average corn prices have increased 116 percent. Input costs are increasing as well. Fertilizer prices were up 32 percent in January of this year versus last year and fertilizer prices have increased 130 percent since 2000," said Litterer. Pressures producers face to provide a crop to satisfy key markets will continue for the short term. USDA's annual projections report looks ahead to 2017 and provides a snapshot that includes stabilizing food inflation, growing yields in corn production and more corn acres. Numerous factors are involved in a successful crop year and NCGA hopes a farm bill will help farmers know what to expect for the coming years. "While commodity prices remain well over target price levels, it is important that growers be able to plan for this crop year and those over the next five years," Litterer added. "The expiration of the 2002 farm bill has been no secret and did not come by happenstance. Action needs to be taken now to ensure the farm bill is completed in a timely manner." NCGA is optimistic that this farm bill will include an improved risk management tool that will address the increasing levels of risk farmers are facing today and in the future. The House, Senate, and administration farm bill proposals all include revenue programs. Litterer said corn growers need a farm bill that delivers a more market-oriented safety net that ensures assistance when it is needed most. Jennifer Bremer can be reached by phone at 515-833-2120 or by e-mail at jbremermaj@hotmail.com. 3/24/08 Date: 3/19/08 Advertisement
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