WASHINGTON — America’s farmers are poised to harvest a record corn crop this fall and achieve the highest yield per acre in U.S. history, according to U.S. Department of Agriculture (USDA) estimates released today. Meanwhile, the U.S. ethanol industry is on pace to produce a record amount of clean-burning renewable fuel, according to Department of Energy (DOE) projections released Tuesday. The Renewable Fuels Association (RFA) said the government reports highlight the importance of getting the Renewable Fuel Standard (RFS) back on its statutory track in 2017.
Today’s USDA report projects the 2016 corn crop at 15.15 billion bushels, with a record average yield of 175.1 bushels per acre.
“U.S. farmers have again risen to the challenge to meet all demands for feed, food and fuel,” said Bob Dinneen, president and CEO of the RFA. “They should be congratulated for producing what is primed to be the third record-breaking crop in just the last four years. The innovation, technology adoption, and productivity we’ve seen in the corn sector over the past decade has been nothing short of astounding.”
Corn ending stocks for the 2016/17 marketing year are projected at 2.4 billion bushels — the highest in 29 years. Meanwhile, prices are expected to average just $3.15 per bushel, the lowest in 10 years. Global grain supply is also set to establish a new record and grain stocks are likely to hit historic highs. U.S. ethanol is expected to consume just 2.9 percent of world grain supply on a net basis. Dinneen said today’s USDA estimates “snuff out the last flickering embers of the outrageous food vs. fuel debate.”
As harvest ramps up in fields across the country, corn demand from the ethanol sector is ramping up as well. DOE projects 2016 ethanol production will average 980,000 barrels per day — or 15.1 billion gallons. The agency also is projecting record ethanol consumption of 14.3 billion gallons. “This is shaping up to be an historic year,” Dinneen said. “Just a decade ago, visionary leaders in the corn and ethanol industries established a goal to produce 15 billion bushels of corn and 15 billion gallons of ethanol by 2015. Ten years later, our nation’s farmers and ethanol producers have made that bold vision into a reality.”
However, Dinneen warned, the Environmental Protection Agency’s (EPA) disappointing proposal for 2017 Renewable Fuel Standard (RFS) volumes is exacerbating the predicted drop in corn prices and farm income this year. EPA’s proposal to needlessly reduce the 2017 RFS requirement for “renewable fuel” from 15.0 billion gallons to 14.8 billion gallons reduces demand for corn at a time when corn stocks are rising and prices are slumping to levels below the cost of production.
“This is not the time to undermine demand for corn and tie the hands of the American farmer. Farmers and ethanol producers made investments and business decisions based on the 2007 law that expanded the RFS, and they expected EPA to follow Congress’ intent in implementing the program,” Dinneen said. “EPA’s proposal is limiting market opportunities for U.S. farmers at a time when the agricultural economy needs a boost. We again urge EPA and the Administration to finalize a rule that truly gets the RFS back on track and supports rural America.”