By Bonnie Coblentz, MSU Ag Communications
Corn has become a very attractive crop
in Mississippi and nationwide, thanks mostly to the growing
demand for corn-derived ethanol, an alternative fuel.
Erick Larson, grain crops agronomist
with the Mississippi State
University Extension Service, said producers have tremendous
interest in planting corn this season.
"Prices are approaching twice the
long-term average," Larson said, and the state may have the
largest corn crop it has had in more than 40 years.
"U.S. corn production is a little more
than 10 billion bushels, and right now we’re consuming about 1.5
billion bushels for ethanol," Larson said. "That’s about 15
percent of the U.S. crop being consumed by a new market, and
there are projections that ethanol production could quadruple in
the next few years."
Mississippi corn is used for feed, with
about 75 percent of that use going to support the state’s
poultry industry. Even with poultry being the only significant
demand on the state’s corn, Mississippi already consumes more
than it produces. By year’s end, an ethanol plant is scheduled
to be operating in Vicksburg, and that could drive the state’s
demand for corn even higher.
Larson said state producers are
responding by planning a huge corn crop in 2007.
"The kind of acreage increase we expect
wasn’t even on the radar screen last year, and seed companies
were not prepared for the demand," Larson said.
He said there should be enough corn seed
for Mississippi farmers to plant as many acres as they want, but
they will not all be able to plant the best hybrids.
"We’ll plant some hybrids less adapted
than we would like," Larson said.
"We’ve always had the luxury of picking
the best hybrids available, but this year, growers are being
forced to purchase hybrids they have never tried or that have
never been grown in the state or mid-south region."
Larson said growers who choose to plant
a corn variety that has not been tested in Mississippi or that
is not intended for growth in this part of the country may not
be happy with the results.
"It could dramatically affect their
profitability. If they plant a hybrid that doesn’t produce as it
should, they will harvest a less productive crop than they
should have had," Larson said.
John Anderson, Extension agricultural
economist, said corn acreage in Mississippi has stayed around
300,000 acres, but this year, that number is expected to jump to
about 700,000 acres.
"If we plant this much corn, it will be
the largest corn acreage in the state since the early 1960s,"
Anderson said. "In recent years, our largest acreage was 630,000
in 1996."
U.S. corn acreage will also go up this
year from the 78.3 million acres planted in 2006.
"The million-dollar question right now
is by how much. If I were to guess today, I would say U.S. corn
plantings next year will be 87 million acres," Anderson said.
Corn prices held near the $2-a-bushel
mark in recent years, but rose dramatically through the fall of
2006 to their highest level since 1996.
"Prices jumped significantly after the
January World Agricultural Supply and Demand Estimates report
showed a tightening of corn supplies,"
Anderson said. "Prices were pretty
stable for nearly a month after that, but in the middle of
February, corn futures again started to move sharply higher. As
of Feb. 22, September futures were about $4.30 a bushel. Last
September, this contract was trading for about $2.74 a bushel."
While corn producers are happy for the
sudden interest in ethanol, there is a downside. The state’s
poultry, catfish, beef, hog and dairy industries also demand
corn, and the high prices caused by increased competition for
this commodity are dramatically increasing their feeding costs.