Checkoff Plays Crucial Role in Establishing Record Demand for Corn, NCGA Says
(9-21-04)
The U.S. Department of
Agriculture’s (USDA) highly publicized forecast of an 11-billion-bushel
corn crop made headlines across the Corn Belt in recent weeks. If
realized, the enormous crop would be a record-setter, up 8 percent
from last year’s 10.1-billion-bushel crop.
But what often goes unnoticed
in discussions of this year’s record supply is the fact that
corn growers are achieving record demand as well, according to the
National Corn Growers Association (NCGA). Through checkoff-funded
market development initiatives, corn producers have established
new, viable markets for their corn – markets that didn’t
exist several years ago.
USDA estimates 10.7 billion
bushels, or 97 percent of this year’s crop, will be used for
everything from livestock feed to ethanol production to manufacturing
of biodegradable plastics. NCGA CEO Rick Tolman said there should
be plenty of corn to satisfy demand for all uses this year.
“It looks like
we’re going to have two record crops in a row and tremendous
increases in yield,” he said. “That should lay to rest
the concerns of those who were worried about our ability to supply
both the traditional and new markets. It should also allay the concerns
that had been expressed about the ability of farmers to respond
to signals in the marketplace.
“The statistics
– if they bear out – are just phenomenal,” Tolman
said. “Total use is expected to be at least 5 percent higher
than last year. That’s a staggering increase.”
Tolman said the rise
in usage can be attributed to strong demand from traditional markets
like livestock and exports, but also to newer uses for corn like
ethanol and plastics derived from corn-based PLA.
“Corn growers are
still seeing very strong demand from their most vital customer –
the livestock industry,” said Tolman, adding that 53 percent
of this year’s crop will go to the livestock sector. “And
while growers will continue to provide top-quality feed to livestock
producers, they’re also seeing new market opportunities for
their product. Through hard work and investments in state checkoff
programs, these new markets have been developed by corn growers
themselves.”
An unprecedented 2.77
billion bushels, or 25 percent of the corn crop, will be used for
food, seed and industrial uses this year, according to USDA. Of
that, a record 1.37 billion bushels will be used in ethanol production.
“Twenty years ago,
if you had told the average corn grower that 13 percent of the corn
crop would one day be used for ethanol, you probably would have
gotten some funny looks,” Tolman said. “But ethanol
has become a robust domestic market for corn, and we expect the
supply to keep growing right along with increasing demand.”
Corn is also
used as a primary feedstock in more than 600
consumer items, Tolman said, ranging from plastic plates and
utensils to comforters, pillows and socks. “We’re seeing
astounding innovation in the manufacturing industry,” he said.
“Consumers and manufacturers alike are seeing the environmental
and economic benefits of using corn in a wide variety of products.”
Tolman said several initiatives
are under way at NCGA to continue to increase profitability and
further expand market opportunities for corn growers. “Our
growers and staff are engaged in some very exciting projects that
will eventually lead to more new uses for corn and heightened market
demand,” he said.