LandReport.com » corn ethanol

I’m Not a Big Fan of Catfish

Eric OKeefe — Fri, 18 Jul 2008 07:00:21 +0000

But I’ve been meaning to reference this article that ran in The New York Times on July 18. It’s yet another example of the effects of the federal government’s mindless ethanol policy. Now, in addition to driving up basic food costs for Americans (and Mexicans), besides sending soybean production overseas, and as well as bankrupting feedlot operators and more than a few cattlemen on both sides of the border, the high prices of corn and soybeans have all but dried up commercial catfish farms in the Mississippi Delta. It’s one of the countless unforeseen consequences of a land use policy that is already beginning to unravel.

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Mexico Opposes Ethanol

Eric OKeefe — Mon, 30 Jun 2008 07:00:41 +0000

As we’ve seen over the last few months, skyrocketing commodity prices are pushing land values to record levels. They are also squeezing cattlemen and other producers who rely on corn and other grains to fatten livestock and poultry. One of the loudest voices protesting this trend has been Texas Gov. Rick Perry, who petitioned the EPA to grant a 50 percent waiver on the 9 billion gallon corn-based Renewable Fuel Standard. Now another vocal opponent of ethanol has emerged: south of the border.

Mexico is clearly feeling the heat. Last week Mexico Agriculture Secretary Alberto Cardenas called for ethanol producing countries to reduce production of grains for alternative fuels. (The U.S. is the world’s leading ethanol producer with Brazil a close second.)

According to the AP, Sec. Cardenas blames ethanol for bankrupting many of his country’s cattle and poultry farmers as well as causing food prices to hit record highs. The government has responded by freezing prices on more than 150 food products.

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Corn Drives Land Prices Higher and Higher

Eric OKeefe — Mon, 01 Oct 2007 19:48:12 +0000

It’s official. The New York Times proclaimed in August that the market for Midwestern farmland was “hot,” a declaration akin to labeling Hurricane Katrina “dangerous” two weeks after it devastated the Gulf Coast. Anyone remotely familiar with the Corn Belt knows that rural land prices have skyrocketed for several years. Here’s a rundown of some recent figures.

BY ERIC O’KEEFE

The amount of corn used for ethanol production has increased fourfold since 2000 from 600 million bushels to more than 2.4 billion bushels in 2006.

FACT: 16.5% Increase in average price of an acre of land in Iowa

In Iowa, the average price of an acre surged 16.5 percent to $4,313 for the year ending March 1, according to the Realtors Land Institute (RLI). The USDA reports Missouri farm values up more than 15 percent to $2,280 per acre. Even recreational land prices surged: 12 to 13 percent in Illinois, according to the Illinois Society of Farm Managers and Rural Appraisers. And the fuel propelling these increases? Government subsidies for corn ethanol.

The amount of corn used for ethanol production has soared fourfold since 2000 from 600 million bushels to more than 2.4 billion bushels in 2006 (more than 20 percent of the U.S. corn crop). According to the USDA, that number will increase more than 40 percent in 2007 when an estimated 3.4 billion bushels are used. In addition to keeping corn prices at near-record highs, this trend has led to a decrease in the number of acres planted in soybean and cotton, the conversion of Conservation Reserve Program acres back to cropland, and even farmers in nontraditional corn states converting crops to corn.

Broker Randy Hertz has been monitoring this price surge from the eye of the storm: rural Iowa. The president of Hertz Real Estate Services and the 2006 national president of the RLI, Hertz labels this phenomenon “ethanol euphoria.” He also offers some advice to those unfamiliar with the driving force behind these production numbers: “Never underestimate the ability of the American farmer to produce corn when the price is high.”

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End of the Conservation Reserve Program?

Joseph Guinto — Sun, 01 Apr 2007 07:00:47 +0000

BY JOSEPH GUINTO
PUBLISHED APRIL 2007

With the Bush administration backing off on the Conservation Reserve Program (CRP), conservation and hunting groups fear the 22-year-old program once dubbed “Noah’s Arc for Wildlife” is a sinking ship.

Backers of the CRP, which pays farmers to plant soil-conserving grass and trees on land they might otherwise farm, call the program a boon to hunters, saying it has created millions of acres of new grasslands while dramatically increasing game bird populations.

But with demand for ethanol surging, corn prices more than doubling since 2005, the USDA is reducing the scope of the program. No new CRP contracts will be offered in the next two years, and the USDA is considering allowing some farmers to cancel existing contracts. That’s a bad idea, says Rob Olson, president of Delta Waterfowl, a North Dakota group that promotes conservation of waterfowl and hunter’s rights. Olson says changing the program could remove 28 million acres of the current 36 million acres in CRP by 2010. And, he argues, that CRP acreage isn’t even the best land to develop for corn production.

“It would be a mistake to start plowing these fragile soils,” Olson says.

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