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When farmers are making money, they tend to spend it on better farm equipment. With grain prices higher and the biofuels business booming, the outlook is bright for farm machinery sales in 2007.

According to a Reuters report, sales of farm equipment were disappointing last year despite the higher corn prices, but one industry analyst expects that to turn around this year.

“Before when you had a spike in corn prices, it was a function of supply. Your corn prices went higher but you had less corn to sell,” said Credit Suisse industrial machinery analyst Jamie Cook, citing the last time U.S. corn prices were at current levels after the drought of 1996.

“This time it’s different in that demand is driving the corn prices higher so we have higher prices, more corn, which means more money in the farmer’s pocket,” she said

Pacific Ethanol will soon begin construction on a 50 million gallon per year ethanol facility in Burley, Idaho according to a company announcement.

The plant would be located mid-way between Boise and Salt Lake City, Utah and is expected to begin construction within the next thirty days.

The Burley Idaho plant site is located on a parcel of 177 acres, with direct access to both the Union Pacific Railroad and Interstate 84. Burley, Idaho is in the Magic Valley region of the state, where a resident population of over 300,000 dairy cattle and 100,000 feedlot cattle will be sufficient to consume all wet distiller’s grain from the new ethanol facility. A fuel blending rack is within eight miles of the plant site.

The anticipation is mounting for President Bush’s 2007 State of the Union address to be made on January 23. The media is already busy speculating about what the president will talk about, with stories out this week that global warming will be on the teleprompter, although the White House is denying reports that Bush will advocate mandatory emissions caps in an effort to combat global warming.

Spokesman Tony Snow said, “If you’re talking about enforceable carbon caps, in terms of industrywide and nation wide, we knocked that down. That’s not something we’re talking about.”

However, promoting alternative energy sources such as hydrogen and ethanol is expected to be emphasized in his speech, as it was last year. Such alternatives would be in line with White House support of voluntary steps to curb greenhouse emissions.

Reuters and other news outlets are saying that Bush “is likely to call for a massive increase in how much fuel ethanol that U.S. refiners must mix with gasoline in coming years.”