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February 22, 2024
By Gale Lush
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WILCOX, NE, February 22, 2024--- “The very low $3.28-$4.06 per bushel corn price range in Nebraska on February 21, 2024, versus $6.71 to $7.30 one year ago is a big concern. $3.51-$4.09 was the corn price range in South Dakota on the same day. Fortunately, USDA projects that the U.S. will use 5.375 billion bushels of corn for ethanol production in the 2023-2024 marketing year. Without that ethanol-driven corn demand just imagine how low the corn price would be right now. If that corn-use-for-ethanol demand dropped by 1 billion bushels the price would likely be below $2.00,” said Gale Lush, Chairman of the American Corn Growers Foundation (ACGF), a corn, soybean and wheat farmer from Wilcox, Nebraska. “Furthermore, the February 14, 2024, USDA Outlook Conference showed baseline, long-term projections of corn ending stocks in MY 2024-25 up at 2.616 billion bushels, with a stock-to-use ratio increasing from 9.9% in MY 2022-23 to 18% in MY 2024-25. That’s not good news. At the same time, corn exports stay flat at just over 2 billion bushels out to 2033-34 and corn used for ethanol stays flat at 5.3 billion bushels for the next ten years. That is not nearly good enough in terms of corn used for ethanol. Today, World Grain.com carried an article reporting that an Ohio grain company had outstanding operating performance and record ethanol production from its four ethanol plants, confirming the industry-wide benefits from ethanol and biofuels. It’s high time that the corn industry and the U.S. government move quickly and aggressively forward with national policies that gets 15% ethanol blends available everywhere year-round, ‘including in 2024’, and especially including more positive EPA ethanol blend policy. Let’s get multiple blends including E-15, E-30 and E-85 available to consumers everywhere, year-round, and not just in a few states. Motorists need to know that ethanol blends save them a lot of money at the pump while replacing carcinogens in the fuel supply, cleaning the air, and spurring economic development through ethanol plant profits, good paying rural jobs and higher corn prices. Fuel consumers deserve to be better informed by the U.S. government about this reality and they deserve more ethanol blend choices nationwide.”
Dan McGuire, ACGF Policy Director said, “USDA projects MY 2023-24 corn exports at just 2.1 billion bushels, up from 1.661 billion bushels last year, but substantially down from 2.472 billion bushels in MY 2021-22 which, for reference, was about identical to U.S. corn exports of 2.4 billion bushels in MY 1981-82, 43 years ago. Even with relatively strong exports MY 2023-24 corn ending stocks are projected at 2.162 billion bushels with a national average corn price of only $4.80/bushel, but USDA’s February 14, 2024 Outlook Conference shows ending stocks over 2.6 billion bushels in MY 2024-25 and increasing to 3 billion bushels by MY 2029-30 with a near 20% stocks-to-use ratio and a national average corn price of only $4.30/bushel. That could translate to the mid $3/bushel cash price range in many rural areas. Without strong corn demand of 5.375 billion bushels for ethanol use this year farm-level corn prices would be in the disaster zone. Other grains in the feed grain sector are certainly connected to corn demand and corn prices. Corn drives other grains and grain sorghum pretty much mirrors corn’s price direction. Wheat exports are dismal. USDA projects wheat exports at only 725 million bushels in MY 2023-24. For reference, that’s about one billion bushels lower than U.S. wheat exports 43 years ago which hit 1.771 billion bushels in MY 1981-82. USDA’s baseline outlook projects wheat exports in only the 800-million-bushel range for the next 10 years. It’s important for policy advocates to remember U.S. export policy and this export track record history, because the ‘export-oriented’ farm and trade policy launched in the 1980’s and doubled down on in the 1990’s has not delivered as promised. Keeping that export track-record front of mind inevitably brings us back to the critical importance of ethanol-driven corn demand and the Renewable Fuel Standard (RFS). We must do everything we can to get the U.S. Congress, the Administration, and the EPA to enact stronger policies that push more corn demand right here in our domestic U.S. market through the ethanol clean fuel demand sector. Cleaner air, lower consumer gas prices at the pump and higher corn prices depend on it.”
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