World Grain - October 2008 - 68

BIOFUELS QUARTERLY: BIOFUELS NEWS REVIEW

Corn demand for U.S. ethanol industry expected to increase 17%
WASHINGTON, D.C., U.S. - Assuming
the U.S. government's latest crop forecast
is right and this fall's corn (maize) and
soybean harvests are sufficient to meet demand, stocks of corn and soybeans are still
expected to fall to historically low levels.
Meanwhile, biofuel production and
global grain consumption are likely to keep
growing.
Going into 2009, there is no "stock cushion" for either commodity, said Keith Collins, the U.S. Department of Agriculture's
former chief economist. "There is little
margin for error."
Farmers planted nearly 162 million acres
of corn and soybeans this year, up from 157
million in 2007. Next year, even more acreage will be needed. The question is how
much and where it will come from.
Economists at the University of Missouri
who forecast agricultural production for
Congress estimate farmers will seed nearly
166 million acres with those two crops, 4
million acres more than this year. A key reason why that extra acreage will be needed:
Demand for corn by the ethanol industry is
expected to increase by nearly 700 million
bushels, or about 17%.

Meanwhile, there will be new pressures
on soybean markets when a new mandate
for usage of biodiesel kicks in next year at
500 million gallons. That target rises to 650
million gallons in 2010.
Some of the additional acreage that will
be needed for corn and soybeans will come
from land now being held out of produc-

tion in the Conservation Reserve Program.
About 1.3 million acres is due to leave the
program Sept. 30, making it eligible to be
plowed and planted. Other acreage is going to have to come from farmers switching from other crops, such as wheat, even
though prices for that commodity also are
at historically high levels.

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MATERIAL HANDLIN G EQUIPMENT
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Cargill partners with Iowa
State on biorenewables
AMES, IOWA, U.S. - Cargill said on
Sept. 18 that it has pledged $1.5 million
to Iowa State University to establish the
Cargill Endowed Chair in Energy Economics. The endowment will help Iowa
State recruit a nationally recognized energy economist to accelerate work in
biorenewables.
"Iowa State University and Cargill have
developed a very strong partnership over
the years, and we are especially grateful
for Cargill's great support for our efforts
in biorenewables," said Gregory L. Geoffroy, Iowa State University president. "The
Cargill Chair in Energy Economics will be
held by a world leader in the economics of
biofuels, who will bring together researchers from many different disciplines, institutions and industries to address the economic challenges of biorenewable resource
development."
This support is in addition to a previous grant made to Iowa State to establish
a bio-based industry center. The chair will
act as the director of the center once it is
established.

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