US ethanol manufacturers, food makers and livestock feeders are consuming so much corn (maize) that stockpiles could be depleted by 2008, unless plantings expand sharply, analysts said on Friday.
In its first forecast of the fall harvest, the US Department of Agriculture estimated on Friday the corn crop at 10.976 billion bushels (278.8 million tonnes), the third-largest crop ever.
Corn usage now exceeds production by a small margin.
But in the 2006/07 marketing year, which opens September 1, importers and US industry will consume 839 million bushels or 7 percent more corn than is being grown, according to USDA. "There's definitely need for more corn," said analyst Mark McMinimy of Stanford Washington Research, especially with the ethanol industry growing "bigger and hungrier" each year.
Growers need to plant around 85 million acres of corn next year to assure an adequate supply, the analysts said. That would be the largest plantings in three decades or more. As a result, stockpiles would plummet by 40 percent, to 1.232 billion bushels by next fall. USDA said 11.815 billion bushels of corn will be fed to livestock, used as a food ingredient or distilled into ethanol in the coming year.
Demand for ethanol is growing as soaring oil prices push consumers to use more of the "green" fuel that is produced from renewable resources like sugar, corn and soybeans. Corn is the chief feedstock for US ethanol, which will account for 2.15 billion bushels, or 18 percent, of usage. Schnittker said an additional 6 million or 7 million acres (2.6 million hectares) of corn were needed.
"It wouldn't surprise me next spring if corn acreage were up 5 percent," said McMinimy. Farmers planted 79.4 million acres this year. "We still have plenty of corn," said Paul Bertels, director of biotechnology at the National Corn Growers Association. He said attractive market prices for corn will lure at least 81.5 million acres into corn next year.
Prices will zoom if corn crops fall short in coming years, said agricultural economist Daryll Ray of the University of Tennessee. He said Congress may hear requests "to develop a meaningful buffer stock program." USDA has not run a grain reserve program since 1996.
Along with its corn forecast, USDA pegged the soybean crop at 2.928 billion bushels, wheat at 1.801 billion bushels and cotton at 20.431 million bales weighing 480 lbs (218 kg) each. The soybean and cotton crops would be the third-largest on record.
The wheat crop will sell for an average $4.20 a bushel, the highest farm-gate price since 1996/97, USDA said, mostly due to "tightening foreign competitor supplies."
At 54.7 million bushels, the durum wheat crop would be the smallest since 1988. Cotton exports during the just-ended 2005/06 marketing year were a record 17.55 million bales, USDA said, due to a surge in sales in the final weeks.
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