The Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, November 2006

The ongoing growth of corn-based ethanol production raises some fundamental questions about what impact continued growth will have on U.S. and world agriculture. Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn-based ethanol production would reach 31.5 billion gallons per year, or about 20% of projected U.S. fuel consumption in 2015. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. Wheat markets would adjust to fulfill increased demand for feed wheat. Corn exports and production of pork and poultry would all be reduced in response to higher corn prices and increased utilization of corn by ethanol plants. These results should not be viewed as a prediction of what will eventually materialize. Rather, they indicate a logical end point to the current incentives to invest in corn-based ethanol plants.

The Iowa Grain Flow Survey: Where and How Iowa Grain Producers and Country Elevators Shipped Corn and Soybeans During September 1, 1999 - August 31, 2000, 2001

In September 1996, a grain flow survey consisting of two parts was completed and published. One part was a farm-to-market survey from a sample of Iowa grain producers, and the second was a survey of all Iowa country elevators. An updated survey for the crop year September 1, 1999 -August 31, 2000, was initiated in September 2000. The results of the two updated surveys are presented in this report. The purpose of the surveys is to estimate the amount of Iowa corn and soybeans that are shipped from each crop reporting district to each major market. Copies of the two questionnaires are presented in the appendices.

Concepts and Rationale for Regional Nitrogen Rate Guidelines for Corn, April 2006

Nitrogen (N) is typically one of the largest corn fertilization expenses. Nitrogen application is critical because it signifi cantly improves corn yield in many crop rotations. When choosing N rates, producers need to carefully consider both achieving most profi table economic return and advancing environmental stewardship. In 2004, university agronomists from the Corn Belt states began discussions regarding N rate use for corn production. The reasons for the discussions centered on apparent differences in methods for determining N rates across states, misperceptions regarding N rate guidelines, and concerns about application rates as corn yields have climbed to historic levels. An outcome of those discussions was an effort with the objectives to: ▪ develop N rate guidelines that could be applicable on a regional basis and ▪ identify the most profi table fertilizer N rates for corn production across the Corn Belt. This publication provides an overview of corn N fertilization in regard to rate of application, investigates concepts for determining economic application rates, and describes a suggested regional approach for developing corn N rate guidelines directly from recent research data.

Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets, 2007

Projections of U.S. ethanol production and its impacts on planted acreage, crop prices, livestock production and prices, trade, and retail food costs are presented under the assumption that current tax credits and trade policies are maintained. The projections were made using a multi-product, multi-country deterministic partial equilibrium model. The impacts of higher oil prices, a drought combined with an ethanol mandate, and removal of land from the Conservation Reserve Program (CRP) relative to baseline projections are also presented. The results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices will increase enough to cover the feed cost increases. Retail meat, egg, and dairy prices will also increase. If oil prices are permanently $10-per-barrel higher than assumed in the baseline projections, U.S. ethanol will expand significantly. The magnitude of the expansion will depend on the future makeup of the U.S. automobile fleet. If sufficient demand for E-85 from flex-fuel vehicles is available, corn-based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices. The direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1% over baseline levels. Results of a model of a 1988-type drought combined with a large mandate for continued ethanol production show sharply higher crop prices, a drop in livestock production, and higher food prices. Corn exports would drop significantly, and feed costs would rise. Wheat feed use would rise sharply. Taking additional land out of the CRP would lower crop prices in the short run. But because long-run corn prices are determined by ethanol prices and not by corn acreage, the long-run impacts on commodity prices and food prices of a smaller CRP are modest. Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of cornbased ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.