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| Illinois specialist: Biofuels influence spring plantings |
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URBANA, Ill. — The size of the biofuel market will be an important factor in determining how many acres of corn and soybeans are needed this year, said a University of Illinois extension marketing specialist.
“This is particularly true for corn,” said Darrel Good. “The majority of biofuels production continues to be corn-based ethanol production. That will continue to be the case for the next few years. However, the USDA acknowledged in the Feb. 10 report of domestic supply and consumption prospects that sorghum is increasing in use as a feedstock in some ethanol plants in the southern and central Plains.”
Good’s comments came as he reviewed the factors that will influence corn and soybean prices over the next several months. Important among those factors will be the 2009 acreage decisions of U.S. producers and the strength of the biofuel markets. Expectations about planted acreage of corn and soybeans in the United States are in a wide range and actual planting decisions may remain uncertain for some time, he noted.
“Uncertainty centers on at least three factors,” he said. “First, the prices of 2009 crop corn and soybeans continue to fluctuate, giving mixed signals to producers about the likely relative profitability of corn and soybeans in the 2009-10 marketing year. Second, there is considerable uncertainty about the relative cost of producing corn and soybeans in 2009. Fertilizer prices were very high in the fall of the year, but have recently declined, at least for some ingredients in some markets. The cost of producing corn in 2009 could vary substantially among growers.”
The distribution of producers who have paid high input prices and those who may pay lower prices could influence planted acreage, but that distribution is not known, he added. “Third, the sharp decline in winter wheat seedings and expected decline in cotton acreage in 2009 will result in additional acreage for other spring-planted crops,” he said. “The magnitude of that acreage is not known with certainty because some acreage could return to non-row crop production or be idled due to expectations of tighter margins for row crop production.” |
| 2/25/2009 |
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