February 28, 2011

US corn industry reassures food and fuel demands can be fulfilled

US corn farmers are able to not only meet, but also surpass, increasing demand for food, feed and fuel in the long-term, despite reports of tight corn inventories, according to National Corn Growers Association CEO Rick Tolman.

"Farmers respond to incentives, and there's an incentive right now to produce. I can guarantee we'll have a big crop in 2011," Tolman said.

Tolman presented this view, formed from both hard data and personal interviews with growers, to the National Ethanol Conference. The conference, which focuses on current and future issues within the ethanol industry, included Tolman's presentation in a panel discussion of market forecasts and their implications for the biofuels industry. Oil Price Information Service Chief Oil Analyst Tom Kloza also gave his views on the oil industry to concerned stakeholders from all sectors of the industry.

While his co-panelist stressed the influence political instability in the Middle East has on oil prices, Tolman explained that today's corn supply situation will not be lasting. Instead, he noted that current planting conditions suggest a bumper crop in 2011.

"We had a great fall, farmers got their crop out of the field, they did their fall tillage, they did their application of inputs. We're coming into the season in about as perfect a condition as you can have," he said, adding that odds favour significant yields in 2011 and a larger carryover in 2012.