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 Iowa State University. The Senate Agriculture Committee held a field hearing at the University of Nebraska today 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.
Babcock said 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 Babcock's full statement from the Aug.18 hearing, click here.