Extension In-Service March 23, 2011 Charles Hurburgh, Iowa Grain Quality Initiative Connie L. Hardy, Extension Specialist Chad Hart, Extension Grain Economist Increased Grain Prices: Logistics Challenges

Corn Use Source: USDA

Iowa Ethanol Production and Corn Usage Summary Statistics May-2010 n Ethanol Produced mil gal/yr Corn Used mil bu/yr DGS 000 tons/yr Current Dry-grind Plants 343, ,237 Expansions and new construction Wet Mills ,557 Nearby Iowa ,986 Total504,693 1,673 (69% of 2009) 14,637

Gross Revenue from Soybeans can be less than Net Revenue from Corn (land cost excluded)

Corn Yield Potential Source: Monsanto, June 2010 Overall = 2.1 bu/a/yr; Last 10= 3.5 bu/a/yr; Seed industry = 4-6 bu/a/yr; million bu/year Nitrogen use: lb/bu down to lb/bu

Fast Export Growth, Slow Yield Growth 2%/yr, 3 bu/acre/yr Trend Export Growth, Fast Yield Growth 1%/yr, 5 bu/acre/yr

3 bu/acre/yr yield increase

5 bu/acre/yr yield increase

Corn Drying Capacity Needs

Summary Corn production is increasing faster than traditional uses can absorb. Increase 3-5 bu/a/yr = MM bu Major economic growth is several areas. Huge surpluses very quickly if …… Systems thinking in policy planning: –Corn, soybeans, other grains together. –Growth connected with acreage balances and continued process improvements So….

Summary - OpEd Grain is not the only natural resource increasing in price Natural resource prices, especially grain, are locked to energy prices (Dermot Hayes) Production agriculture is becoming more concentrated but has 2-5X the economic relevance of just 4 years ago. Will production agriculture learn the leadership and influence skills that protect other low number but high economic impact industries? OIL! Etc. Who will stand with our core business? It can supply both food and fuel. Food has been cheap; some of the world can now outbid us.

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