Editor's note: National Corn Growers Association President Bart Schott, a North Dakota corn grower, talks about how farmers are completing a harvest that will provide more than enough corn for all needs. Schott attacks some of the usual "myths surrounding the phony Food Versus Fuel debate."
Once again, ethanol opponents are using food price scares to combat the ethanol industry, forgetting that this well-worn argument has very little basis in reality. Two recent news items have brought them out of the woodwork.
On October 8, the USDA reduced the estimated 2010 corn crop by just under 500 million bushels. And on October 13, the U.S. Environmental Protection Agency announced it would allow a higher blend of ethanol, up to 15 percent, in newer cars.
Despite this news, there are several reasons why we don’t need to worry about ethanol driving up corn and food prices.
First of all, the corn harvest is not yet over and the 2010 production estimate could very well increase by the time of the next USDA report, which comes out Nov. 9. After all, much of what has been harvested by the October USDA report was in the areas most adversely impacted by the summer weather. Even with the recent USDA adjustment, the 2010 average yield and overall corn crop would be the third highest on record.
Corn stockpiles as September began were more than 1.7 billion bushels, the highest since 2006. The projected surplus (or ending stocks) of nearly 1 billion bushels for the 2010 marketing year demonstrates that U.S. corn farmers will continue to meet all demands for food, feed, fuel and fiber.
Also, look at the entire marketplace. Global coarse grain supplies are nearly unchanged, the USDA reports, with lower U.S. supplies offset by increased foreign coarse grain production. The marketplace always responds well to these temporary challenges. With higher grain prices, southern hemisphere corn growers will be delivering a corn crop in six months and they will respond to market signals, just as we anticipate U.S. doing next year.