Ethanol & Planting Decisions
The ongoing ethanol boom continues to drive corn prices higher and higher—and it's dragging other grain prices along for the ride. K-State Research and Extension feedlot nutrition specialist Chris Reinhardt says producers may find it challenging to predict their best planting option for next year.
“For example, the high price of soybeans and wheat we saw as a result of the acres that corn stole away from other commodities. Some of those acres will be shifted back to soybeans, to wheat, to other crops, which will create, potentially, another spike in the corn price. It's going to be very difficult to plan, and possibly facilitate risk management into commodity-buying scenarios.”
Whether ethanol is made from corn or cellulose, Reinhardt doesn't expect the total amount of workable farmland to increase; as mass production of cellulosic ethanol becomes commonplace, producers will find new opportunities, and challenges.
“What it will really do is it will increase the complexity of the decision-making process on those limited number of acres that already exist... The decisions will become more complex, and they'll have much more complex ramifications, in terms of the national and international grain markets.”
You can find more information at your local extension office. For K-State Ag Today, I'm Jeff Wichman.