Posted By Cindy November 11, 2008
The honeymoon of high commodity prices looks to be over for the moment, according to Terry Francl, senior economist with the American Farm Bureau Federation.
He says that corn and soybean farmers will likely have to wait until the first of the new year for any rally in prices,
The latest USDA World Agricultural Supply and Demand Estimates (WASDE) projects the 2008/2009 season average farm price for corn at $4.00 per bushel to $4.80 per bushel, compared to $4.25 per bushel to $5.25 per bushel in October. “This decline has been driven by the decline in oil prices and concerns about the financial and equity markets,” Francl said.
“Crude oil prices will continue to be a critical factor impacting both corn and soybean prices,” Francl said. “Consequently, the post-harvest seasonal price rally may be somewhat moderate this year. However, as the new year approaches, more competitive bidding for 2009 acreage is expected to boost crop prices.”
The AFBF economist also paints a subdued outlook for the ethanol market in the months ahead. The WASDE November report pegs corn used for ethanol production at 4 billion bushels in 2008/2009. “Although an increasing renewable fuel standard will bolster demand, ethanol plants are going to continue to struggle until crude oil and gasoline prices recover.”
Posted By Cindy November 10, 2008
In the November crop forecast out today, USDA lowered its prediction for corn yields this year by 0.1 bushels from the October forecast, which brings expected production this year to an even 12 billion bushels. That forecast expected to give a little boost to prices as traders were actually expecting to see an increase.
Despite the little drop, this is still on track to be the second highest yield on record, behind 2004, and production will be the second largest behind last year.
Soybean yields were also trimmed in the report and production is now forecast at 2.92 billion bushels.
Posted By Chuck November 7, 2008
I’m making a guess that most of you use Google. How many of you know about Google News Alerts?
If you don’t then you might consider setting up a personal Google News Alert for the key word, Corn.
As of the writing of this post there are 28,296 results for the word “corn” in a Google News Search. You don’t have to worry about getting all of them when you set up a news alert though.
And just in case you’re interested, there are currently 86,100,000 results for the word “corn” in a regular Google search!
Posted By Chuck November 7, 2008
Very soon corn cobs will be used for much more than pipes. How about cellulosic ethanol production? That’s what POET, one of the largest producers of of ethanol, has in mind. They had me up to their Project LIBERTY field day in Emmetsburg, IA to see some prototype equipment that many of the ag OEM’s are designing to harvest and collect corn cobs. It’s estimated that harvesting the cobs could add eleven percent to the amount of ethanol an acre of corn can yield. That sure increases efficiency!
I wondered what you would have to do though to harvest, collect and deliver the cobs since you need to separate them from the corn itself. Well, apparently all you need to do is pile it up at the edge of your corn field! Then a company like POET can just come by and pick it up.
They did a lot of research on this and the cobs hold up well just piled out on the field until heading to the plant. POET says it will have their Emmetsburg plant in full corn cob cellulosic production by 2011 so this isn’t far away.
If you’d like to hear more about it then listen to my interview with Jim Sturdevant, Director of Project LIBERTY, here:
Posted By Cindy November 6, 2008
Lots of people in Washington are looking for new jobs right now and key USDA officials are already starting to move on.
U.S. Agriculture Secretary Ed Schafer yesterday announced the resignation of Agriculture Under Secretary for Rural Development Thomas Dorr, an Iowa farmer who has been chairman of the USDA Energy Council and served as co-chair of the Federal Biomass Research and Development Board.
“Tom Dorr has been a transformational leader for USDA Rural Development,” Schafer said. “As the transition to a new Administration continues in the months ahead, senior leaders will be moving on, but Under Secretary Dorr’s contributions to USDA and rural America will be felt for many years to come.”
During his time at USDA since 2001, Dorr led the effort to revitalize USDA Rural Development’s Multi-Family Housing Program and to successfully resolve longstanding litigation which threatened the program with potentially billions of dollars in losses. He led USDA’s pathbreaking rural broadband program launch (authorized initially in 2002) which is essential to ensuring universal access to affordable broadband even in low-density rural areas, and he instigated an ongoing initiative to enhance USDA Rural Development’s marketing and outreach efforts and streamline office structure and program delivery systems.
Dorr’s resignation is effective December 1. No word yet on where he will be going.
Posted By Cindy November 5, 2008
How will agriculture fare under an Obama presidency? In an interview during the campaign with farm broadcaster Stewart Doan of Agri-Pulse, Obama talked about his agricultural policies.
“Number one, I come from an agricultural state,” Obama said. “As you know, Illinois has a lot of corn and a lot of beans and that means that during the time I was in the state legislature as well as in the United States Senate I’ve gotten familiar with agricultural issues and I have consistently been a strong supporter of agricultural issues.”
Obama says he supported the 2008 Farm Bill, “because I think that its important for us to have a strong safety net, food security requires it.” He also supports more reliable disaster relief for farmers and has been a strong supporter of biofuels.
When it comes to trade, Obama says his administration will be different than the Bush administration. “I want to see us move forward on a new round of agricultural trade agreements,” Obama said. “But I am going to be a tougher negotiator when it comes to trade than the Bush administration has been.”
Listen to the Agri-Pulse interview with Obama here:
Posted By Ken November 4, 2008
Last week, the Wall Street Journal wrote about how supermarkets were putting pressure on food manufacturers to lower prices or offer special deals for consumers. The Oct. 30 story (“Grocers Find Food Prices Hard to Swallow”) told about how grocery chains are “balking at food makers’ efforts to raise prices further,” and “using food companies’ earnings reports as leverage to reject price increases.”
Welcome to the club, ladies and gentlemen.
From the story: Kraft Foods Inc. and Kellogg Co. both reported higher-than-expected quarterly earnings last week — thanks, in part, to price hikes. Kraft’s revenue rose 19% from the year-earlier period, and Kellogg’s sales climbed 9.5%.
Corn prices? Down about 50 percent from this summer. And yet, we’re still blamed.
Posted By Cindy November 4, 2008
The latest numbers on ethanol production and demand nationwide show continued growth.
The Renewable Fuels Association reports that demand continued to outpace production, with production averaging 647,000 barrels a day and demand calculated at 661,000.
RFA notes that the growth in ethanol production in August came amid declining corn prices that today are half of what they were at their peak in late June, which “erodes the argument of livestock, poultry and food processing companies that have argued ethanol is responsible for the dramatic increase in food prices. It also calls into question the reports from groups such as the World Bank, the United Nations and others that US ethanol production is responsible for high corn prices.”
Posted By Cindy October 31, 2008
“Wouldn’t it be wonderful if we could take a product that’s currently produced by the petrochemicals industry and find a competitive peer for it—one that’s renewable, competitive and green?”
The answer to that question, posed by National Corn Growers Association Vice President for Research and Business Development Richard Glass, should be a resounding “heck, yeah!”
This little molecule, Ethyl lactate, is a general all-purpose solvent as well as a common ingredient in pharmaceutical preparations, food additives and fragrances. It is typically derived from petrochemicals. However, using a reactive distillation process allows a cost-effective way to produce it from ethanol – hence providing a significant non-fuel revenue stream for ethanol plants. “If all you produce from a biorefinery is ethanol, that is fine for a nascent industry but, in essence, all you have is a one-trick pony,” Glass said. “My dream is the integrated biorefinery where the only limits are your imagination and the ability to make the system utilize all components of the production output.”
An article in Biomass magazine outlines some of the work being done by the NCGA and a team from Michigan State University. According to the article, ethyl lactate is not widely used today because of its high cost, but has applications in the electronics industry for micro-circuit fabrication, mainly because it’s a clean solvent. In 2007, the cost of producing ethyl lactate was between $1.30 and $1.60 a pound. MSU and NCGA researchers were able to cut that cost by half using a process called reactive distillation.
Posted By Ken October 29, 2008
More and more, the food “versus” fuel debate is being proved for the lie it was. There never was a strong connection between ethanol demand and retail food prices. Here are a few more obituaries, if you will, for this discussion.
Sen. Charles Grassley to Grocery Manufacturers Association, via FoodPriceTruth.org:
“While food processors were willing and able to immediately blame ethanol and rising corn prices for having to increase retail food prices, they won’t be extending the same courtesy by lowering those prices with lower corn and oil prices.”
Biopact Web site:
“… those who blamed biofuels for pushing up prices of major grains made a problematic mistake. The more cautious (and often less noisy) experts – like the Wageningen University’s agrocommodity specialists – were correct, when they said biofuels played a ‘marginal’ role at best.”
And, yes, the Reuters story noted below.
Nothing further to see here, folks … let’s move along, please …