The ethanol industry's demand for corn will drive the addition of 8.4 million acres of corn in 2007, according to the 2007 agricultural economic baseline prepared for the U.S. Congress by the Food and Agricultural Policy Research Institute.
FAPRI says corn use for ethanol will almost double in the 2007 crop year compared to the 2005 crop, and by 2009 it could make up 32% of the nation's corn crop with over 4 billion bushels.
Pat Westhoff, FAPRI analyst, says that current prices "are higher than our projections, as the market encourages producers to plant more corn in 2007 to feed the growing ethanol industry." The baseline has the average corn price at just over $3 per bushel for the next decade.
FAPRI's baseline, prepared by think tanks at University of Missouri-Columbia and Iowa State University in Ames, also has soybeans losing ground to corn, predicting 70.5 million acres in 2007 compared to 75.5 million acres in 2006. By 2016, the baseline has soybean acres down to only 57 million acres.
The FAPRI figures of 86.7 million acres in 2007 and 90 million acres in 2008 are larger than USDA's estimation of 86 and 89 million acres for the next two years. However, Farm Futures survey released in January estimated that producers plan to plant 88.4 million acres of corn this spring, and the American Farm Bureau has estimated 91 million acres of corn in 2008-09.
A separate study conducted by Farm Futures in January predicts corn acreage at more than 88 million acres for 2007. Another study is being conducted in advance of USDA's March planting intentions survey.