Corn farmers will produce a record crop this year.
A quarter of the US corn crop will be used for ethanol. Corn prices are at a 10 year high – $750 an acre compared with $420 for soybeans. Planting more than 90 million acres, the US agricultural landscape is transformed as soybeans, cotton and wheat are displaced.
Animal feed prices are rising while ingredient supplies are under pressure. To use ethanol plant waste called distillers grain, feedlots are being relocated. To raise cash, feedlots are building power plants to capture cattle urine and manure. By-product markets are changing as oil crops, wood waste, grasses, sugar-cane stalks and citrus waste are moving toward fuel production. [Financial Times]
Corn Belt not required
Irrigation and fertilizer use is way up. Monsanto, Dupont and Syngenta report that engineered seed sales bring high margins and record sales. For the next rotation, planting marginal land is likely with the use of patent seeds – potentially a one-third increase in total acreage. [Financial Times]
The United States surpassed Brazil last year as the world’s largest ethanol producer with around five billion gallons compared to some 4.3 billion gallons produced in Brazil. But the United States needs around 14 billion gallons just to provide enough for a 10 percent blend in this country’s gasoline supply. [Miami Herald]
Adjustments are global. Traditional US grain-belt exports are down. Feed and food shortages are expected to spike prices. Clearing new acreage, Brazil hopes to increase exports of food. Indonesia and India are under heavy pressure. China stopped licensing projects that use food grains for ethanol, causing sweet potato and sorghum demand to skyrocket as the next choice for fuel production.