Egg Industry - January 2008

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 will decline.

“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