GoodFuels

Farmers step up to the plate

Farmers in the US have faced obstacles of historic proportions this year as flooding rain threatened to severely hamper crop production in the American Midwest.  Critics sought to capitalize on this misfortune, adding insult to injury for an element of nature completely out of their control.  Fortunately, American farmers ignored these attacks and calmly and responsibly went about their business. The fruits of their labor are now becoming apparent.

In the US Department of Agriculture (USDA) August 2008 World Agriculture Supply and Demand Estimates (WASDE), a clear picture of the resiliency and productivity of American farmers emerges.  According to the WASDE report:

• Corn yields are expected, on average, to reach 155 bushels per acre, the second highest average yield in history. These impressive yields are expected to produce nearly 12.3 billion bushels of corn, the second largest crop in history. As a result, corn supplies are expected to be higher than anticipated, providing enough corn for all users.
• Wheat farmers in the US and around the globe are also responding. In the US, wheat production is expected to be the largest in 10 years and 20% higher than 2007. Wheat stocks, by extension, are expected to rise 88% from last year, providing enough wheat for all users. Globally, wheat production is expected to set a record at 670.8 million tons, up 10% from last year.

While the resiliency of American farmers is extraordinary, the response to growing demand for grains by the rest of the world’s farmers is equally worth noting. Globally, total grain production is expected to well exceed 2 billion metric tons, increasing 3.5% over last year and 9.3% from two years ago. This record production is also expected to lead to grain ending stocks that are 6% larger than last year.

Markets for these commodities have recognized farmers’ abilities to overcome adversity. Since highs in June, corn futures prices have fallen 35%, and cash bids today are offered at well below $5 a bushel in many locations. Likewise, wheat prices have spent the majority of the year falling. Since a peak in March, wheat prices are down 37%.

The bottom line: World agriculture is more than capable of fulfilling its traditional role as food and feed providers, while also contributing significantly to a renewable, sustainable energy future. Our nation’s energy crisis will not solve itself. It will require bold action and thoughtful collaboration. Together with American farmers, America’s ethanol industry stands ready to play its role in reducing America’s dependence on foreign oil. After all, our energy future must begin at home.