US Farmers Gotta Produce More Corn

[melvill]

USDA Chief Economist made the following remarks to the US Senate Energy Committee on Sept 6 regarding corn & projected ethanol production:

-US needs 10 million more acres of corn by 2010 than seeded this year to maintain existing levels of exports and livestock-feed use
-expected increases in corn yields will help meet demand but 10 million more acres are needed to prevent much smaller exports and much higher livestock feeding costs.
-those new acres will come from switches from wheat, corn and the Conservation Reserve Program
-at current crude oil, gasoline and ethanol prices, ethanol plants are profitable at much higher corn prices
-based on USDA models, ethanol mills getting $2.25/gal for ethanol can pay as high as $5.00/bu for corn and still cover cash operating costs

If you want to read Collins' entire statement go to:
http://www.usda.gov/oce/
and click on Sep 06, 2006 statement.

Of course, petroleum prices can decline as they did in the '80s. Nevertheless, there are interesting times ahead.

[charliep]

I will highlight processing opportunities a little closer to home - the announcement of the two crushing plants at Yorkton, Saskatchewan. Two times 850,000 tonnes a year. Between the above, bringing St. Agathe on line and the tweeking that is going on at all the other plants, that bring Canadian crush capacity to about 6 mln tonnes (up from 4 mln tonnes tonnes). Export demand should be about 3 mln tonnes firm customers needs (1.8 mln tonnes Japan, 1 mln tonnes Mexico with opportunity to increase, US northern state plants) excluding China and some of the recent importers. Not including seed and dockage, that means Canada needs to produce 9 mln tonne of canola every year to satisfy domestic and export needs.

See the below announcement for more details.

http://www.discovermoosejaw.com/index.php?option=com_d4j_ezine&task=read&page=11&c ategory=34&article=584&Itemid=133

The only other comment is to try to look at the most recent issue of "Consumer Reports" They are pretty down on ethanol. They do note opportunities to better utilize cleaner burning diesel fuels in vehicles.

[ianben]

Here in UK ethanol from wheat is supposed to be farmers choice for energy as each acre will produce 21/2 times the energy imput.
Biodiesel from canola while easier to produce will only give one for one on energy. Will use equivalent of one gallon of fossil fuel to produce one gallon of biodiesel.
Not much point in my opinion!

I suppose depends on yeilds etc. but we are lead to believe canola price for energy cannot rise much above todays level for energy production but wheat has the lots of upward potential similar to US maize it would appear.

Sugar cane is best for ethanol, Brazil wins again, but not an option here some interst in sugar beets though

Do you have these facts for Canadian crops?

[joedales]

The ethanol plants are going to need more of the corn and the price is going to drive up the number of acres. This should be very bullish for Western Canada....