WILCOX, NEB – February 21, 2025 – “USDA’s February 2025 World Agricultural Supply and Demand Estimate projects total MY 2024/25 world grain supply at 3,612.41 million metric tons (MMT), world ending stocks at 756.33 MMT, total U.S. grain supply at 527.02 MMT, total U.S. ending stocks at 64.90 MMT and the U.S. 2024/2025 average farm-level corn price at a low $4.35 per bushel,” says Gale Lush of Wilcox, NE, a corn, soybean and wheat farmer and Chairman of the ACGF. “The corn price reported today in the Grand Island Independent was only $4.68/bushel. Without USDA’s projected ethanol and by-product use of corn in MY 2024/25 of 5.5 billion bushels corn prices would be projected much lower. For comparison, U.S. corn exports projected at 2.450 billion bushels are only 45% of projected corn use for ethanol. Given the fact that farmers are so good at increasing annual corn yields and production it is essential that we get just as good at creating new demand for corn with greater ethanol use to get higher corn prices. The key to solving that problem is federal and state public policy. Rural America should demand that Congress increase annual corn-use for ethanol by 1 billion bushels, so it hits a total of 6.5 billion bushels of corn for annual ethanol and by-product production.”

“Dan McGuire, ACGF Policy Director said a comparison of MY 2011/2012 when U.S. corn prices averaged $6.25/bushel vs. 2024/25, with a projected U.S. corn price of only $4.35 is useful and instructive because we need to bring U.S. corn ending stocks down to the MY 2011/12 level of 851 million bushels compared to the 1.540 billion bushels projected for MY 2024/25. The U.S. ethanol industry needs to grind 689 million bushels more corn to produce about 2 billion gallons more ethanol annually on an expedited basis. That means the U.S. needs to use 6.5 billion total bushels of corn via ethanol annually. The fastest and smartest way to achieve that growth is for Congress to quickly enact a mandatory 15% (E15) nationwide, year-round ethanol blend in gasoline. A 30% (E30) ethanol blend, considered optimum by many technical experts, would be much better.”

McGuire says taking a closer look at world grain production, export and use trends provides a much-needed dose of reality for U.S. farmers and policy advocates. Quoting the recent edition of World Grain and editor Arvin Donley’s ‘From the editor: Emerging duopoly will impact grain sector:’ “After decades in which the United States has been economically, politically and culturally dominant, the world is drifting into a new era. The emergence of the BRICS coalition, which includes Brazil, Russia, India, China and South Africa, is perhaps the biggest factor in this shift. Founded in 2009, the coalition has a combined GDP and population that is now greater than the G7 countries (United States, Canada, France, Germany, Italy, Japan and the United Kingdom). BRICS nations produce 44% of the world’s grain and account for one-third of wheat and rice exports and one-quarter of corn exports. Veteran economist and grain market analyst Dan Basse, president of Chicago, Illinois, US-based AgResource Inc., describes this emerging alternative world order as a duopoly. Determined to increase the economic and political strength of its members, one of BRICS’ stated goals is to establish a currency which could replace the US dollar as the dominant reserve currency. While that’s not expected to happen soon, it’s something to keep an eye on, Basse said, noting that it’s now acceptable in Brazil to pay for soybeans using the Chinese Yuan. “I don’t see us going back,” Basse told me during a recent conversation. “I only say that because US dominance in the world has been diminished. After 70 years of capitalism where you make something and then decide where to make it cheapest and sell it around the world — that model has been broken. I think what’s happened with the Ukraine-Russian war, what’s going on with India’s rise and Africa’s importance going forward, the US is going to have a difficult time maintaining the dominance that it had before. To me, this duopoly looks very logical going forward.” The driving force behind these respective coalitions will be the United States and China. Tension has always existed between the two superpowers who have vastly different political and economic worldviews, but two events in recent years widened the rift: the trade war launched by the United States in 2018 and the COVID-19 pandemic that originated in China and killed millions of people worldwide and devastated the global economy.  With tensions mounting, China has reduced its dependence on the United States as a grain supplier and strengthened ties with other nations, most notably Brazil, which is now China’s leading supplier of soybeans and corn. It also is investing heavily in natural resource-rich Africa, trying to wrestle influence away from the United States on the continent with the fastest-growing population and economy and 60% of the world’s uncultivated arable land. What will all this mean for the global grain industry? Most likely fewer markets to export to and stagnant or lower commodity prices for the foreseeable future — not what any farmer or grain trader wants to hear.”  

“The U.S. Congress needs to get to work and prioritize legislative and regulatory policies that quickly facilitate an additional 1 billion bushels of new corn demand through higher ethanol use right here in the U.S. domestic market. That long term marketing strategy is the logical means to mitigate and compete with the new growth in world grain production that U.S. farmers must recognize is coming and that they must compete with. The U.S. can compete by producing more corn-ethanol and exporting more ethanol and high-value co-products. The U.S. ethanol production infrastructure is robust. It exists right now and can be expanded with the right federal incentives. It’s the job of Congress to quickly create those incentives with new federal policies,” said McGuire.

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