US corn acreage to remain strong over next 10 years

 

 

US corn farmers, spurred by rising ethanol production and solid demand from foreign markets, will continue to plant large crops over the next 10 years, while soy planting is seen declining and then rising without exceeding 2009 acreage.

 

Farmers are expected to reduce the number of acres they plant with soy over the next three years, before a gradual increase that won't bring levels back up to what they were in 2009, according to a USDA annual report released Thursday (Feb 11). The report is somewhat dated because work on it ended back in November.

 

Farmers planted 86.5 million acres of corn in 2009, according to the latest USDA estimate, which was released on Tuesday (Feb 9). The long-term forecast released Thursday shows corn acreage this year rising to 88 million acres and then 90 million acres in 2011. There is a slight drop to 89.5 million acres in 2012, and the forecast remains unchanged through 2018 before the forecast for 2019 drops to 89 million acres.

 

The long-term corn production forecast shows a mostly strengthening crop over the next 10 years. Farmers produced about 13.2 billion bushels of corn in 2009 and the report released Thursday shows a 14.6-billion-bushel crop in 2019.

 

Commercial ethanol in the US is made from only corn now, but that's likely to change in the coming years, USDA economists said in the report. Nevertheless, demand for corn-based ethanol will remain strong, keeping corn acreage high.

 

"While expansion in the ethanol industry continues, smaller gains for corn-based ethanol are projected over the next 10 years," the report said. "Domestic corn use grows throughout the projection period, largely reflecting increases in corn used in the production of ethanol."

 

The US ethanol industry is forecast to consume 4.3 billion bushels of corn during the 2009-10 corn marketing year, and that, the long-term report said, will continue to rise over the next 10 years. Ethanol will use 4.4 billion bushels of corn in 2010-11, and by 2019 that amount will reach 5.025 billion bushels.

 

Farmers planted 77.5 million acres with soy in 2009, according to the latest USDA estimate, but the report released Thursday shows that dropping to 76.5 million acres in 2010 and then 73.5 million acres in 2011. Planting then slowing rises to 74.5 million acres in 2012, 75.5 million acres in 2013 and 76 million acres in 2014. From then through 2019 the forecast remains unchanged.

 

Despite the projected overall slip in soy planting, domestic demand-- in the form of soymeal for livestock feed and soyoil for biodiesel production --is expected to rise, the report said.

 

"Soybean oil used for methyl ester for production of biodiesel grows to 2.9 billion pounds, representing 13-15% of total use of soybean oil and supporting the production of close to 400 million gallons of biodiesel," the report said.

 

Biodiesel usage of soyoil was put into doubt after Congress failed to renew a US$1-a-gallon tax incentive for the fuel. The tax incentive expired December 31, and biodiesel production in the US had virtually ceased in January.

 

But on February 3, the Environmental Protection Agency announced a decision that soyoil-based biodiesel will qualify for government production mandates. That mandate requires increasing amounts of biodiesel be produced in the US, up to one billion gallons per year by 2012.

 

US soy exports will continue to be sharply challenged by "strengthening competition" from Argentina and Brazil, the report said, but US shipments overseas will continue to expand.

 

The US is now expected to export 1.4 billion bushels of the soy it produced in 2009. Ten years later the forecast is for just 1.455 billion bushels.