Ohio Farmers Help Meet Ethanol Demand

An ethanol plant under construction near Bloomingburg, OH. The demand for corn is boosting prices.
An ethanol plant under construction near Bloomingburg, OH. The demand for corn is boosting prices.

Ohio farmers apparently will follow a national trend this spring. They say they’ll plant about 15% more acres in corn this year — a move spurred mostly by the demand for ethanol. But some Fayette County farmers have been rethinking their spring planting decisions.

A group of Fayette County farmers meets for breakfast every morning at 6 at a truck stop in Jeffersonville. Their Carhartt-style clothing and farming-themed ball caps set them apart from the other early morning diners. They’re in good humor as they finish up large cups of mostly-black coffee.

“We can’t afford to eat,” says Roger Stockwell. “She happened to have four pieces of toast left over so she brought that out so we could have it. We’re farmers, you know.”

Stockwell is a farmer who says he’s decided to plant less corn than he originally intended. His farm in the northern part of the county is about 9 miles northwest of Bloomingburg where a new ethanol plant is being built. But construction is behind schedule. And that’s caused farmers’ plans to change, according to Jeff Robinson, a local fertilizer dealer.

“December, January, we was probably looking at 15% to 17% more corn acres,” Robinson says. “But here recently the way the weather’s been and the fact the ethanol plant won’t be operating in the fall of ’07, the guys are switching back going to more of a rotation.”

That ‘rotation’ as farmers call it tends to be about 50% soy beans, 40% corn, and 10% wheat.

Corn prices were higher earlier in the year but they’ve fallen during the past two weeks. Price is one of a multitude of factors that farmers must weigh as they decide what to plant. But it’s an important one says farmer Gene Baumgardner.

“It’s a matter of making a dollar so it’s what makes you that dollar, Baumgardner says. “Just because there’s an ethanol plant – it’s just another demand point. The more demand points you have, the more demand you have, the better your prices. If ethanol creates a demand for corn we’ll have better prices.”

But there’s a downside if too much corn is grown.

If we produce 13 billion bushels of corn, the supply may exceed the demand and we’ll have lower prices again,” Baumgardner says. “There’s nothing sacred about $3.50 corn that can’t turn into $2 corn pretty quick.”

The Ohio Farm Bureau’s Joe Cornely says that’s due to the volatility of a globally based corn market.

“That’s part of what makes it a challenge to be a farmer. A guy growing corn here in central Ohio; his individual income will be influenced by what his local weather does but also by what happens in the world wide corn market,” Cornely says. “We grow a lot of corn in Ohio but we’re a drop in the bucket when you look at all the production in the United States and the rest of the world so politics and the weather and ethanol demand and about a thousand other things go into moving that corn market anywhere from a penny to a dollar.”

Cornely says ethanol is not just good for farmers but for local farming economies and a part of lessening America’s dependence on foreign oil.

“This is not just an economic boon for the guy that’s growing corn; this is good for the rural economy,” Cornely says. “This is a jobs issue. As we see more ethanol plants come on board there are more job opportunities. And this is also a national energy issue in that the more of a home-grown energy product we can raise the less foreign oil we have to buy.”

The cost of constructing Bloomingburg’s ethanol plant will exceed $100 million. It will employ about 60 people when it’s up and running. More than 100 ethanol refineries are already operating in the U.S.

“I would say that I’m all in favor of it because it has raised the price of corn! I just hope they keep building more of em.”

In the meantime these Fayette County farmers – just like their colleagues across the country – will continue to factor figures and make educated guesses about the weather, supply and demand, and so forth.

“You know what an expert is, don’t you? It’s a drip under pressure! We’re pretty good at that.”