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| Hurt: Indiana growers will recover from the drought |
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By LINDA McGURK
Indiana Correspondent NEW MARKET, Ind. — Indiana will likely recover from the drought, but farmers here could face a shortfall of 10 bushels per acre of corn and 3.5 bushels per acre of soybeans, according to Chris Hurt, ag economist at Purdue University.
“At best, the state can get back to an average (corn) crop. And that’s pretty optimistic. Even if we get normal precipitation from now on, we’ll probably be at the short end of the yield,” he said during an appearance at the June 28 Farm Forum and Trade Show in New Market, Ind.
Because of healthy crops in the Western Corn Belt, Hurt doesn’t expect the drought to have much impact on the national average corn yield, which he estimated would come in half a bushel below normal. The recent rain changed things for the better.
“Ten days ago it was a whole different world. Then the forecast was that (the Eastern Corn Belt) would bring the national production down by 5 percent. And 10 days from now, the story could be different again.”
While U.S. farmers have gotten accustomed to talking about $4 corn, Hurt said the average price for the 2007 crop will likely be closer to $3.50, with soybeans hovering around 2.2-2.4 times the price of corn.
For his long-term outlook, Hurt focused on agriculture’s role on the U.S. energy market. He admitted there are still more questions than answers in this area, but one thing we can pretty much rest assured of – alternative fuels are here to stay. “This is a world of renewable fuels,” said Hurt. “They may not be the cheapest source of energy right now, but they may be 10 or 20 years from now. And maybe 30, 40 or 50 years from now, we’ll be able to displace oil altogether.”
The energy bill that recently passed the U.S. Senate calls for the production of 36 billion gallons of ethanol by 2022, which is about six times the current domestic capacity and three times the projected 2008 capacity. Hurt said a provision of the legislation caps the amount of ethanol derived from corn seeds at 15 billion bushels, while the remaining 21 billion bushels are supposed to come from cellulosic sources. The provision is designed to limit the use of a food crop for fuel, but Hurt would like to see that part of the bill eliminated.
“I think we can make at least 20-25 billion gallons of ethanol (per year) from corn seed. There needs to be some flexibility here.”
Hurt said there’s been a definite shift in focus from corn-based to cellulosic-based ethanol, both in the research labs at Purdue and the offices on Capitol Hill, but the technology probably won’t become economically viable until at least 2010.
“The most optimistic (cost) estimate I’ve seen for cellulosic-ethanol production with the current technology is $2.50 per gallon,” Hurt said.
He predicted that cellulosic-ethanol production will start with corn stalks as feedstock, since it’s going to be hard to convince farmers to start growing switch grass and other biomaterials until the industry has become established.
Because corn stalks are bulky and contain a lot less energy than the seeds, high transportation costs will require cellulosic-ethanol plants to be located close to the producers of the raw material.
“They have to be much smaller-scale plants. I think they will start around the established ethanol plants,” Hurt said.
The Senate bill also raised fuel-economy standards to a fleet-wide average of 35 miles per gallon for cars, trucks and SUVs by 2020. The current mandated average is 27.5 miles per gallon for cars and 22.2 miles per gallon for small trucks and SUVs.
U.S. car manufacturers have fought the increase, arguing that American consumers don’t want to drive smaller cars, but Hurt said it’s necessary to address both supply and demand to meet the energy needs of the future. So far, U.S. energy policies have mainly focused on boosting the supply.
“I’ve got to give the Senate credit for trying to do something on the demand side,” he said.
This farm news was published in the July 4, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 7/5/2007 |
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