The 2007 Agricultural Baseline forecast by the U.S. Department of Agriculture projects corn crop plantings to rise to 90 million acres by 2016.

The National Corn Growers Association (NCGA) sees the forecast as an affirmation of its position that growers will respond to market signals and satisfy future demand by planting more corn.

Acres planted to corn will increase nearly 15 percent from 2006-2007, the report says. Demand for ethanol will likely drive the acreage increase, while increased yields will help prices stabilize. “The report shows that supply and demand will remain in balance, providing corn growers with a strong, growing market for their crops,” said NCGA Chief Executive Officer Rick Tolman. “Corn growers will meet the demand driven by the ethanol market, while continuing to supply both our traditional domestic and export customers.”

USDA expects the per bushel price of corn to increase incrementally for several years, followed by a steady decline as acres and yields rise. Prices should begin to decline in the 2009-2010 marketing year, eventually falling back to $3.30 per bushel by 2016-2017.

“As growth in ethanol use stabilizes, annual increases in corn production from yield gains (will) outpace increases in corn use for ethanol, allowing corn stocks to grow modestly and corn prices to ease somewhat. This supports renewed expansion in domestic corn feeding and exports,” the report noted.

By that year, corn production will increase to more than 14 billion bushels, USDA predicts. NCGA’s vision calls for 15 billion bushels of production by the year 2015.

“Rapid expansion of the ethanol industry makes this year’s USDA projections look significantly different than its 2006 report,” said Tolman. “However, the overall trends remain in line with our forecasts. Corn customers and consumers will see that U.S. corn growers can and will meet the growing demand for food and fuel.”

A summary and links to the report are available here »

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