Expectations for greater biofuel plant capacity and the federal Renewable Fuels Standard have created a “can’t lose” demand proposition for U.S. corn and soybean farmers, according to testimony from Bruce Babcock, economist and Center for Agricultural and Rural Development director at IowaStateUniversity. The Senate Agriculture Committee held a field hearing at the University of Nebraska last month on U.S. food, feed and fuel production.

Babcock told the committee that ethanol mandates have created a demand of between 25 percent and 30 percent of the U.S. corn crop for fuel production.

He expects a bright outlook for corn and soybean prices over the next five years, facilitated by tax credits and energy mandates, as long as crude-oil prices remain above $100 per barrel. There is little doubt, he said, that biofuels from corn and vegetable oil will meet Congress’ mandated levels.

To read a copy of Babcock’s full statement at the Aug. 18 hearing, click here.