The Fight For Corn

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Ohio State University Agricultural Economist Matt Roberts says the expected drop in corn yields will increase debate over how corn should be used.(Photo: Flickr)
Ohio State University Agricultural Economist Matt Roberts says the expected drop in corn yields will increase debate over how corn should be used.(Photo: Flickr)

Later this week,the U.S. Department of Agriculture will give its first estimate of this fall’s corn harvest.

Experts say the corn yield numbers are expected to intensify the debate over whether corn should be used for fuel or food.

Competition for corn is keen. Cattle, pork, and poultry producers need millions of bushels to feed their animals.

There’s also a federally-mandated renewable fuel standard that gobbles up about 37 percent of the U.S. corn crop for ethanol production.

This year, Ohio State University agricultural economist Matt Roberts says there likely won’t be enough U.S. corn supply to meet demand.

“Oh, there will have to be rationing of demand. Undoubtedly,” Roberts says.

Cash corn prices have already topped $8 per bushel as traders anticipate lower crop yields. Roberts says somehow, demand for corn will have to be lowered.

“By the way, there’s a huge question right now…where that reduction is going to happen?”

Meat, dairy and poultry industry groups say during this drought year too much corn is being used to produce ethanol.

The Environmental Protection Agency’s renewable fuel standard requires production of 11 billion gallons of ethanol this year.

Reporter: “But that requirement, is that independent of any price mechanism that goes on? I mean if ethanol gets higher than crude oil because of drought conditions, do you still have to produce 11 billion gallons of ethanol?”

Roberts: “Under the current law, you do.”

U.S. secretary of Agriculture Tom Vilsack defends the ethanol requirement. He says even with drought conditions throughout the Corn Belt, he thinks calls for ethanol production limits are premature.

“I’m a strong supporter of the renewable fuel standard,” Vilsack says.

“It’s providing choice at the pump. It’s providing less-costly gas. It’s reducing our reliance on foreign oil. It’s creating economic opportunity for farms. It’s a job creator.”

Vilsack says higher corn prices might already be limiting exports, and liquidation of some cattle herds will also lower demand for corn.

The USDA releases its corn harvest estimate on Friday. Economist Matt Roberts says the Ohio crop could be reduced by 20 to 40 percent.

More severe or extreme drought conditions are reported in other Midwest states, so corn yields in those states could be even lower.

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