Growers intend to plant 90.5 million acres of corn for all purposes in 2007, up 15% from 2006 and 11% higher than 2005.  If these figures are realized, this would be the highest acreage since 1944, when 95.5 million acres were planted for all purposes.

 
Expected acreage is up in nearly all States as favorable corn prices, caused by increased demand from ethanol producers and strong exports sales, are encouraging farmers to plant more acres to corn.  The increase in intended corn acres is partially offset by lower expected acres of soybeans in the Corn Belt and Great Plains, and fewer expected acres of cotton and rice in the Delta and Southeast.

 
Illinois farmers intend to plant a record high 12.9 million acres of corn this spring, up 1.60 million acres from last year.  North Dakota and Minnesota growers also expect to plant record high corn acres, up 910,000 and 600,000 acres.

 
Corn farmers in the 10 major corn producing States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin) intend to plant 69.5 million acres, up 12% from the 62.2 million acres planted last year.  Iowa continues to show the largest corn acreage at 13.9 million acres, up 1.30 million acres from last year.
 

The Alexandria Daily Town Talk reports that the next big alternative fuel crop and boon for Louisiana farmers may very well be sweet sorghum, a cane-like plant with a high sugar content grown primarily for forage, silage, and sugar production.

 
Lee McClune, president of the Iowa-based Sorganol Production Co., has presented research to the AgCenter from Iowa State University that shows sweet sorghum can produce more than six times the ethanol, about 3,037 gallons per acre, than the 450 gallons per acre produced from corn.  Sweet sorghum also can be grown and turned into ethanol a lot cheaper than corn, McClune said, returning about $1,000 more per acre than corn.

 
McLune explained that Louisiana’s sub-tropical climate is ideal for growing sweet sorghum, which, he said, can be grown in Louisiana 9-10 months during the year, compared with 4-5 months in midwestern states such as Iowa. 

 
AgCenter engineers, however, are waiting to see if the technology McClune is touting lives up to expectations: “I have to take a much closer look at the technology. If it can do what he claims, it’s a very promising thing,” said Dorin Boldor, an agriculture engineer with the LSU AgCenter in Baton Rouge.

 
Sugar cane is better for ethanol production than both sweet sorghum and corn, with varieties producing as much as 3,299 gallons of ethanol per acre. It cannot, however, be effectively grown in the state much farther north than Alexandria.

 
Sweet sorghum, on the other hand, can be grown all over the state, and research is needed to determine which variety of sweet sorghum grows the best in central Louisiana.  A smaller variety of sorghum, used in animal feed, is already being grown by Louisiana farmers.

U.S. Senator John Thune (R-S) has urged federal officials to give quick consideration to a proposal for using a 20% blend of ethanol in vehicles.

 
About half the gasoline sold in the nation is now a blend of 10% ethanol and 90% gasoline (or E10), but Thune urged the EPA to prepare for quick certification of a blend of 20% ethanol and 80% gasoline.

 
Minnesota will be requesting a waiver to allow the use of 20% ethanol in fuel, Thune said. When the EPA considers the Minnesota request, it should look at approving a broader standard that would allow the fuel in other states if those states and the fuel industry decide to use a 20% blend, called E-20, he said.

 
“We’ve got to continue to grow the demand for and usage of and develop the ethanol market for all the reasons everybody agrees are important, energy independence, clean air and obviously a good economy in the Midwest,” Thune said.  Thune said the EPA will have 180 days to respond to the Minnesota request, but he hopes the agency will conduct its review quickly.

 
Roughly half the corn grown in the nation is expected to be used to produce ethanol this year.  Lisa Richardson, executive director of the South Dakota Corn Growers Association, said the ethanol industry needs the proposed change to increase demand for ethanol.

The USDA reported last week that the ethanol industry’s corn demand is raising livestock costs and will result in increased beef, pork and chicken prices.

The USDA also reports that ethanol is consuming 20% of last year’s corn crop and is expected to use 25% of this year’s harvest, driving up the price of corn. The average price of corn is $3.20 a bushel, which is $2 up from last year.

Higher feed costs will reduce meat and poultry production. The National Chicken Council reported that the price of corn has forced a 40% increase in the cost of feeding chickens, and poultry will soon cost more at retail.

Deputy Agriculture Secretary Chuck Conner said USDA is closely monitoring corn supply and demand, which is likely to force farmers to plant more acres of the crop: “We do have confidence in the marketplace’s ability to react.  We believe producers are seeing the market saying, ‘I need more corn, not only for ethanol, but for our feed needs in this country.”

The USDA announced that a mere 4.1 million acres will be withdrawn from the Conservation Reserve Program in the next four years, ruling out the possibility that it be used for extra corn production.  The CRP program pays landowners to take out of production land that is highly erodible or otherwise environmentally sensitive.

Meanwhile, USDA — urged by NCC, the National Pork Producers Council, American Meat Institute, National Turkey Federation, National Cattlemen’s Beef Association, and National Milk Producers Federation — has formed an ethanol panel to address the effects of ethanol and other biofuels on animal agriculture.

The Dairy and Poultry subcommittee of the House Agriculture Committee warned yesterday that consumer food prices will rise if the burden of expensive corn is not ameliorated.

 
J. Patrick Boyle, president and CEO of the American Meat Institute, said that Congress should take practical actions to moderate the impact that the nation’s renewable energy policy is having on animal feed costs and the cost of food sold to consumers, and Tyson Foods’ Matthew Herman spoke on behalf of the National Chicken Council, telling the subcommittee that the United States could see a corn shortage as ethanol demand outstrips supply.

In an effort to alleviate price pressure on corn producers, the two groups groups suggested that Congress 1) increase federal investment in dried distiller grain research that could help producers adjust feeding regimens to include distiller grains, 2) allow the U.S. ethanol tariff to expire as scheduled on Dec. 31, 2008 so that Americans have greater access to imported ethanol, and finally, 3) promote alternative energy sourced from cellulosic materials, methane, or renewable diesel.

 
Herman and the National Chicken Council also asked Congress to 1) permit non-environmentally sensitive cropland to be released from USDA’s Conservation Reserve Program without penalty or loss of program benefits, and 2) allow new cropland into the program if it is designated for bio-energy production. AMI’s Boyle suggested a working lands conservation program to encourage production of environmentally friendly feedstuffs.

President George Bush said yesterday that the key to keeping U.S. cattle and hog farmers from feeling the pinch from rising feed-corn prices is a breakthrough in cellulosic ethanol production technology.

Critics of the President’s energy policy say that Bush’s strategu of offsetting 35 billion gallons of gasoline use a year by 2017 with alternative fuels such as ethanol is unrealistic and could make feed-corn prices significantly more expensive.

Nonetheless, President Bush said he was confident in his goal, but it would require continued government funding. Cellulosic ethanol “is coming to fruition, and the role of the government is to stimulate thought and investment.” 

The Bush administration has asked Congress for up to $4 billion in loans guarantees for biofuel projects, which would include plans to build biorefineries and cellulosic ethanol plants, which produce motor fuel from biomass such as wood chips, switchgrass, and corn stover.

The President says his 35 billion gallon goal is supposed to help cut U.S. dependence on foreign crude supplies and address climate change through cleaner-fuel. The Administration is aiming that 20 billion gallons will come from cellulosic ethanol, with only around 15 billion gallons likely to be supplied through corn-based ethanol due to market constraints.

Presently, however, it’s technically unfeasible to produce cellulosic ethanol commercially because of the high cost of enzymes that break down the corn starch into sugar for fermentation, and some energy analysts wonder if a breakthrough is possible within the timeline set by Bush.

“I know it sounds like a pipe dream to some…(but) we’re on the verge of some breakthroughs that will enable a pile of woodchips to become the raw materials for fuels that will be able to run your car” he added.  If cellulosic ethanol doesn’t become commercially viable in time, the Buch administration is hoping to use coal-to-liquid production, another alternative fuel, to help meet the 35 billion gallon goal.

Increased ethanol production and President Bush’s push for a greater emphasis on renewable energy sources seems to be the cause of some controversy in the poultry industry.  Speaking at the National Turkey Federation’s annual convention in Tucson yesterday, Samantha Slater, director of congressional and regulatory affairs with the RFA, discussed the pros of ethanol before an audience confronted with ever-rising corn prices.

Though the poultry industry faces corn prices of about $4 per bushel, Slater said the grain-based ethanol industry is paying far less for product. “about $2.20 to $3 a bushel, though the spot price is much higher.”

More than 100 grain-based ethanol plants are “on the line” today, Slater said, with 77 more under construction to meet growing U.S. demand for the fuel source.  In all, some 4.9 billion gallons of ethanol were produced in the United States last year against demand of about 6 billion gallons, Slater said. The remainder was imported from Brazil.

Economist Tom Elam, president of FarmEcon.com, said it will be difficult to seamlessly integrate ethanol into the U.S. economy. “An 8-million to 10-million acre increase in corn will drop prices, but cause soybean meal prices to rise” owing to corresponding declines in soy acreage, and at a time when McDonalds Corp. is looking to substitute soybean oil for Canola in their cooking oils.

Some argued that grain-based ethanol demand and resulting corn prices will add to the price of U.S. poultry exports, making them less competitive than exports from Brazil, which relies on sugar cane to manufacture ethanol.  Elam said that as long as oil prices to remain high, so too will the price of corn, owing to greater demand for renewable fuels. “As long as crude oil prices are north of $50 [per barrel],” he said, “we’ll see corn above $3 [per bushel].

The National Cattlemen’s Beef Association has approved a policy urging the Bush administration to phase out government subsidies for ethanol production, to scrap the 54-cent-per-gallon tariff on imported ethanol, and to transition from corn-based to cellulosic ethanol.

At Saturday’s Cattle Industry Convention in Nashville, Agriculture Secretary Mike Johanns told U.S. cattle producers that the government would encourage alternative methods of making ethanol to protect them from rising corn prices.  “That is why we propose to accelerate our research into cost-effective ways of producing cellulosic ethanol from biomass,“ he said, noting that ethanol can be made using grasses, woody plants, wood waste, and sugar beets.

The proposed 2007 Farm Bill recommends spending $1.6 billion over the next 10 years on the development of cellulosic ethanol and proposes $2.1 billion in guaranteed loans for cellulosic projects as well as construction of production plants in rural areas.

Carnegie Mellon University researchers have used advanced process-design methods, combined with mathematical-optimization techniques, to reduce the operating costs of corn-based bio-ethanol plants by more than 60%.
   
Redesigning the distillation process by using a multicolumn system together with a network for energy recovery that ultimately reduces the consumption of steam, a major energy component in the production of corn-based ethanol, has been the key to the Carnegie Mellon strategy.
   
“This new design reduces the manufacturing cost for producing ethanol by 11 percent, from $1.61/gallon to $1.43/gallon,” said chemical engineering professor Ignacio E. Grossmann. “This research is also an important step in making the production of ethanol more energy efficient and economical.”

Yesterday, Credit Suisse analysts said that with corn futures prices passing $4 a bushel, ethanol plant expansion might be limited in years to come.

 Plants that are under construction this year into the first half of next year will likely be completed, but beyond that, companies will be careful to proceed with expansion plans and cancellations are possible. David Nelson, a research analyst at Credit Suisse, said the stocks-to-use ratio for corn is at its second lowest level in the last 50 years.

Normally the stocks-to-use ratio for corn ranges between 10% and 20%, but it was lowered by the USDA to 6.4%. The last time the usage ratio was this low was in 1996, when CBOT corn futures traded at more than $5 a bushel.