February 25, 2008

US corn crop for 2008 enough for both feed and ethanol

US farmers will be able to produce enough corn this year for both food and feed as well as the growing ethanol industry, National Corn Growers Association Chief Executive Rick Tolman said Thursday (February 25, 2008).

Tolman, in a an interview with Dow Jones Newswires, agreed with the new US Department of Agriculture forecast for less corn planting this year, but he stressed that strong yields will be enough to meet demand. The USDA is now predicting that farmers will plant 90 million acres of corn this year, down from 93.6 million in 2007.

Corn demand from the US ethanol industry, meanwhile, is expected to grow substantially.

There will still be enough, though, Tolman stressed.

US farmers, this year, should be able to produce 12.8 billion bushels of corn, Tolman said. That's up from USDA's preliminary baseline forecast of 12.5 billion bushels, but down 1.5 percent from the roughly 13 billion bushels produced in 2007.

The demand on corn this year will likely make livestock feed and some food a bit more expensive, but, bottom line, there will be enough corn, Tolman said.

USDA Chief Economist Joe Glauber said earlier Thursday: "The livestock sector is facing the challenge of higher feed costs. Net returns weakened in 2007, and producers are likely to be further stressed as grain prices escalate in 2008."

Corn production will likely bounce back in 2009, and farmers will plant more, Tolman said. Many farmers switched this year to plant more wheat and soy to take advantage of strong international import demand, but that will likely be short-lived, he said.