A new report indicates there will be enough corn and soybeans for ethanol and biodiesel production, as well as the feed, food and export uses those crops are tasked with.
But the evaluation from the Agricultural Marketing Resource Center‘s Robert Wisner, Professor of Economics and Energy Economist, says things could get tight if next year’s crop is hit with bad weather or a natural disaster:
For 2009-10, the current corn crop estimate points to adequate corn supplies for feed, food, fuel, and export uses. Carryover stocks on August 31 of next year are expected to be about 1 and one-half weeks above minimum working stocks levels. Our early and very tentative normal-yield projections for 2010-11 show corn carryover stocks declining slightly by August 31, 2011 but still remaining marginally above minimum working stocks levels.
Wisner does note that there’s not a lot of margin for error in case the Corn Belt gets hit with drought or flooding. He says that will keep corn prices volatile should any inclement weather show up.
As far as soybeans and biodiesel, they should be OK, if, once again, the crops turn out as expected:
[T]he availability of soybeans and soybean oil for 2009-10 and 2010-11 is not indicated to be a major constraint on biodiesel production in U.S. if South American crops are near normal. Supplies for the current marketing year are a little tighter than indicated at this time last year because of extreme weather problems in South America last winter and early spring. However, U.S. and EU government policy actions that limit biodiesel demand and create uncertainty about future policies are a constraint on U.S. biodiesel production. That, in turn, makes 2010-11 soybean availability for biofuels and other uses look a little more adequate than anticipated a year ago.
You can read all of Wisner’s report in the January 2010 edition of the Ag MRC’s Renewable Energy Newsletter.
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