A Publication of WTVP

Farmers are in the midst of some very exciting times in agriculture. It’s been a whirlwind of activity in the grain pits of the Chicago Board of Trade the past year, there is cutting-edge technology in seed genetics and the renewable fuels industry continues to explode.

It’s been normal for corn, soybeans and wheat to make 10-to-30 cent price swings on a daily basis in the trading pit. In early January, soybeans were trading for over $12 a bushel and corn for over $4.50 a bushel. Just last spring, soybeans were trading around $7 a bushel. As is often the case, commodity prices are high when demand is high and supplies are low.

Today, there are many issues farmers need to keep tabs on in order to be successful in marketing their crops. There are grain inventories; export demand; the growing demand for corn from ethanol plants; weather conditions in other crop-growing areas of the world, such as Argentina, Brazil, China and Europe; feed demand from livestock; and the list goes on.

It’s a rapidly changing world for agriculture. Developing countries like China and India are growing their economies at a record pace and raising their standard of living, which translates into an ability to purchase higher-protein foods. At the same time, the United States has had an incredible expansion of ethanol plants. U.S. ethanol capacity grew to 7.5 billion gallons in 2007, a 40 perA Rapidly Changing World for Agriculture Agricultural Issuescent increase from 2006. There are 136 ethanol plants in the U.S., with 63 plants under construction and eight plants undergoing expansion. If all of the new plants and expansions begin operating, U.S. capacity will be approximately 13 billion gallons. Seven billion gallons of ethanol production demanded two-and-a-half billion bushels of corn. Thirteen billion gallons of ethanol will require over four-and-a-half billion bushels of corn. U.S. farmers harvested a record corn crop this year of slightly over 13 billion bushels.

There has been a hiccup in our local agriculture economy. The almost-completed Central Illinois Energy plant near Canton filed for bankruptcy. It is a small ethanol plant in comparison to others currently being constructed. Its forecasted production was approximately 40 million gallons of ethanol, compared to many plants being built today at 100 million gallons. There was a lot of buzz in our area when the plant was proposed in late 2001. The concept and timing were right; it just didn’t happen for a variety of reasons. Many of our local farmers did invest in the facility and delivered corn to the plant this fall. You can point to a number of different reasons for the failure, but the basic idea and desire to use a locally produced product (corn), lessen our dependence on foreign oil and make the air we breathe cleaner is difficult to debate.

The plant will likely be sold and produce ethanol at some point in the future. When that will be, I don’t know. IBI