17 September 2004

US-Ethanol Production Alone Will Consume About 10% of Nation’s Harvest

Lincoln, NE — Predictions of a record U.S. corn crop this fall are astounding. But equally amazing is the fact that there are places for most of that corn to go—thanks to market development efforts funded by corn producers themselves.

“Everyone is talking about the supply side of the equation and it’s certainly impressive without question. But the really incredible news is that demand is keeping pace—even with record-setting production,” said Don Hutchens, executive director of the Nebraska Corn Board. “The combination of livestock production, ethanol, exports, and new industrial uses for corn has created a diverse marketplace for corn.”

According to USDA reports released today, the nation is headed toward a bin-busting 11 billion bushel corn crop—with a national average yield of 150 bushels per acre. Nebraska, according to USDA, will hit both yield and production records of 157 bushels per acre average and total production of 1.240 billion bushels.

Hutchens noted that corn producers have also been responsible for creating new records for corn demand. “Over the 25 years of the corn checkoff in this state, Nebraska corn farmers have invested less than a nickel per bushel in the development and future of their industry,” Hutchens said. “Checkoff dollars from all the corn-producing states are helping discover new uses for this versatile crop—and helping maintain traditional markets that are fundamental to profitability. Ten or twenty years ago, no one, would have ever imagined we would be using 10.7 billion bushels in 2005, but we will.”

Ethanol production, an industry that barely existed 25 years ago, has become a major customer for corn. According to the Renewable Fuels Association, a record 2.8 billion gallons of ethanol will be produced in 2004—using the equivalent of more than one billion bushels of corn. This production level is a 91% increase over 1999, the year that California first banned MTBE, a gasoline additive that competes with ethanol in the marketplace, but has been found to contaminate groundwater. In 2004, approximately 30% of the nation’s gasoline will be blended with ethanol.

Biodegradable plastics, industrial lubricants and other corn-based products have been developed as a result of research partially funded by checkoff dollars. “Corn producers are also investing heavily in supporting the livestock industry through research, promotion and cooperative efforts,” Hutchens said. “In spite of the growth of other corn markets, livestock production continues to be our largest and most important customer.”

Hutchens said that the growth in corn demand has had the effect of diversifying the portfolio for corn producers. “As modern production techniques help farmers grow more corn, it’s imperative that they continue to invest in growing new markets for their crop,” he added. “If they don’t invest, who will?”

Source: Southwest Nebraska News Sept. 15, 2004.

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