In written testimony submitted last week to the Senate Agriculture Committee, the National Corn Growers Association emphasized that the nation’s farmers are likely to react to current market signals by planting enough acres to corn to satisfy prospective demand in 2007.

NCGA said corn producers have met steadily increasing demand for corn with increased supply. “U.S. growers have produced the three largest corn crops in history in the past three years,” NCGA noted. “Simply put, though the market may experience heightened volatility as demand rapidly increases, there is no shortage of corn.”

Despite recent price increases, the cash price of corn is neither unprecedented nor unmanageable, NCGA told committee members. Farm-gate yearly price averages have topped $3.10 per bushel three times in the last 25 years, compared to USDA’s price projection of $3.20 per bushel for the current marketing year. The testimony also stated, “…it is highly likely U.S. farmers will respond to recent market signals by planting (about) 10 percent more corn acres this spring.”

Additionally, the group pointed out as ethanol production increases, so does the production of distillers grains – "a high-quality source of livestock feed."

NCGA outlined five reasons why it believes corn producers will continue to meet demand:

  • Continued advances in biotechnology and conventional plant breeding that will lead to higher yields.
  • Incremental acreage shifts to corn from other crops based on market demand
  • Slow or no growth in demand for corn for livestock feed.
  • Increased supply of distillers grains and displacement of corn from feed rations.
  • Improvements in ethanol production efficiency and emerging technologies such as corn fiber conversion and the adoption of ethanol-tailored hybrids.

NCGA concluded its comments by stating, “Continued commitment to U.S. agriculture and further investment in the developing biofuels industry will create a robust, dynamic, renewable portfolio for this country and strengthen our national security. The corn industry has the resources, ingenuity and resolve to satisfy future demand for food, feed and fuel.”

Source: National Corn Growers Association