Wait and See

Cindy Zimmerman

USDA’s Prospective Plantings report out Friday says that farmers will plant five percent less corn acreage this year and seven percent more soybeans than a year ago – mainly because of higher fuel and fertilizer costs. So, what does that mean for ethanol production? Don Roose, an analyst with U.S. Commodities says “This puts the end users on notice like ethanol plants,” according to this article in AgricultureOnline. The Des Moines Register reports that Al Larson, who manages NEW Cooperative’s seed warehouse in Knierim, is skeptical about the report’s findings. “Our yields here the last three years have been just phenomenal,” he said. “I think it might go the other way. Ethanol demand, I think, is going to drive a lot of it. It’s everywhere you look.”
USDA’s estimate was well below what the trade was expecting – almost two million acres less than the low end estimate – so skepticism may be in order. And, as always, yields will largely depend on the weather, which is not predicable in any year. So, we just have to wait and see what really happens this year.