l No Major Break l
recent years.” Record-high wheat prices
likely have shifted a modest number of
acres from corn and/or soybeans along
the eastern edge of the Great Plains as
well as in the eastern Corn Belt, Missouri,
and the South. It is not clear yet whether
the cotton market will buy back some of
last spring’s lost acreage.
More Soybean Acres
Kurt Guidry, economist at Louisiana
State University, says cotton acres in his
state are likely to remain low. In 2007,
many acres shifted from cotton to corn,
he says, and cotton prices are still weak
“when you consider production costs.”
Looking at 2008, he expects more production shifts, but not as dramatic as in
2007. His prediction is that corn acreage
“When you look at the expense of
growing a corn crop in comparison with
what you have with a soybean crop, and
the profitability looks the same, producers are going to choose the lower cost
commodity, and that will be soybeans.”
The Iowa report says that if all of the
planned plants in Iowa are built, the vol-
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ume of corn needed for the processing
industry in the state will be 159 percent
of the 2006 Iowa corn crop. That number
does not include any requirements for
corn for livestock feeding in Iowa, exports
from the state for feeding and processing
elsewhere in the United States, or exports
to other countries.
The report says that traditionally, Iowa
has been a major corn exporting state.
“Some observers have concluded that
Iowa will become a net corn importer
within the next few years. However, a
quick look at existing plants, as well
as those under construction and being
planned across the Corn Belt, suggests it
will be difficult to find a sizeable source
of corn for import.”
The report says that just the plants currently being built in the United States,
operating at rated capacity, will need the
equivalent of about 60 percent to 66 percent of global corn exports. Most, if not
all of these plants, should be operating
within three years, and many will be in
production before that. In addition, some
portion of the 343 plants being planned
but not yet under construction will likely
start construction within the next three
years. This rapid expansion of the industry is likely to put downward pressure on
ethanol processing margins and will bring
substantial changes throughout U.S. and
global agriculture. EI
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