What is in this article?:
- Higher corn prices slow exports, ethanol production
- Irrigation distinct advantage
- Arkansas corn in good shape compared to other parts of United States.
- Corn prices rising; affecting ethanol production, slowing grain sales for export.
Arkansas’ corn crop, a few dry days away from harvest, is in much better shape than the rest of the nation. However, the drought gripping other parts of the Corn Belt is raising prices and questions about whether there will be enough corn nationally to meet the country’s ethanol mandates.
Strong prices helped push U.S. corn acreage in 2012 to its largest area since 1937. However, drought is withering non-irrigated acreage in other states, sparking fears there may not be enough corn for livestock and ethanol.
“The acreage was certainly sufficient, but the yield is not,” Scott Stiles, Extension economist for the University of Arkansas Division of Agriculture, said Thursday. “Over the past month, corn prices have begun the rationing process. One month ago, June 18, the September futures contract settled at $5.37. Wednesday it traded as high as $7.97 -- up almost 50 percent in a month.”
On Thursday, September corn was up 15 cents to near $8.10.
“Ethanol is the largest segment of U.S. corn demand now. The surge in corn prices has forced some ethanol plants to shut down and some are even liquidating their corn inventories. That’s the only profitable thing they can do at this point.”
Agriculture Secretary Tom Vilsack met with President Obama on Wednesday about the drought and no decision was made about reducing or waiving the ethanol mandate, an issue that arose during last year’s drought.
Stiles said livestock producers must travel beyond the borders for feed.
“Importers around the world do have alternative sources of feed. These can be found either in the form of other grains or from other origins such as Australia, Russia and the Ukraine. In fact, southeastern U.S. livestock producers have started importing Brazilian corn. Feedlots in Texas and other parts of the Southwest are replacing corn with wheat.”