Leaders of the Iowa Corn Promotion Board (ICPB) and Iowa Corn Growers Association (ICGA) provided a "real world" perspective on corn supplies during a media teleconference on December 8. Spokesmen for the two groups said that there will be enough of the grain produced in future years to meet the state's food production demand as well as the increasing demand for ethanol.
Bob Bowman, ICGA president who farms near DeWitt in eastern Iowa, says the current uproar over corn supplies is nothing new. "We've seen this debate before, as recently as 1995-96," he notes. "I'm no economist, but I can tell you that when we see strong demand and good prices, corn farmers respond with higher production."
Farmers are already thinking about making some changes to adapt to the growing market demand for corn, says Kyle Phillips, a grower from Knoxville who is chairman of ICPB. He cites ongoing technology improvements that are increasing the amount of corn produced on each acre, along with grower efforts to use land more efficiently through practices such as modified crop rotations.
Farmers will plant more corn in 2007
Phillips points out that he plans to shift from planting corn on 50% of his acreage in recent years to planting corn on 64% of his land in 2007.
Both farmers agree that the current healthy demand for corn and strong corn prices are good news for Iowa's growers and the local economies they support because they give farmers an opportunity to be profitable in the marketplace.
Rapid growth in the use of corn to make ethanol has triggered some of the concern, especially among livestock feeders. Craig Floss, CEO for the two corn groups, reminded the people who were listening to the conference that increasing the use of corn for ethanol also increases the supply of ethanol co-products available to feed animals, an argument he supported with a graph of projected growth.
Distillers grain is good livestock feed
He noted that distillers dried grain (DDG) from the ethanol process are gaining in popularity with Iowa livestock feeders and that foreign customers are showing a growing interest in DDG use. About a third of each bushel of corn processed for ethanol ends up as DDG, which is especially valuable in beef and dairy nutrition but can also be used to feed swine and poultry.
Floss says corn growers will have time to boost production because many proposed ethanol plants are facing construction delays. There is a lack of availability of materials to build the plants as fast as people want them built, and the companies that have the expertise to build the plants are extremely busy these days trying to finish construction that's already started.
Although the ICGA and ICPB spokesmen seemed confident in the ability of American farmers to grow enough corn, they do have some concern about whether there is enough storage and the right kinds of transportation routes to keep up with demand.
Concern about transportation, infrastructure
Floss says corn growers will lobby lawmakers and encourage the industry to come together to invest in upgrades in grain handling and storage, improve transportation on the Mississippi River and expand rail and truck routes.
Conference participants asked especially about the infrastructure needed to support increased corn and ethanol production, about shifting acres from the USDA Conservation Reserve Program back into plantings, and about projections of future corn production and use.
The ICPB, made up of 17 Iowa growers, collects $8 million annually to develop and defend markets, fund research, and provide education about corn and corn products. The ICGA is a membership organization, lobbying on agricultural issues on behalf of its 6,000 members.