Yesterday, the WASDE (World Agricultural Supply & Demand Estimates) report came out and reported that U.S. feed grain ending stocks for 2014/15 are projected lower with reductions for corn. Corn use in ethanol production is projected 50 million bushels lower, yet the reduction in corn use for ethanol is offset by a 50-million-bushel increase in projected feed and residual use. Thus, expected total domestic disappearance is unchanged. Corn exports are projected 50 million bushels higher based on commitments to date and higher projected global demand. Projected ending stocks are lowered 50 million bushels. The season-average farm price for corn is projected at $3.50 to $3.90 per bushel, up 5 cents at the midpoint.
So after learning a little more about the current corn market situation, what markets do we see Nebraska corn going to?
With the help of research supported by corn checkoff dollars, corn-based materials like bioplastics and fabrics are a reality today. In fact, they are turning up in more and more places – compostable tableware, food containers, drink cups, gift cards, snack chip bags, bedding, carpet, shirts and more. All of these products are made from renewable corn and directly replace products made from petroleum.
NatureWorks LLC, based in Blair, Nebraska, is one of the companies that makes raw materials for all these products. Others include Mirel Bioplastics (owned by ADM and Metabolix) and DuPont Tate & Lyle BioProducts.
Over the last three decades, ethanol made from corn has become an important fuel in Nebraska and across the country. Biofuels like corn-based ethanol directly replace petroleum-based fuels – and they’re renewable. Ethanol is better for the environment, helps keep fuel dollars here at home and it supports rural communities because that’s where most ethanol is produced.
Nebraska ethanol plants have a capacity of more than 2.0 billion gallons – making Nebraska the second-largest ethanol producing state in the country. They use about 700 million bushels of corn annually – and directly provide and support thousands of jobs. Since ethanol is made only from the starch in a kernel of corn, these corn ethanol plants also produce more than 6 million tons of distillers grains, a nutritious livestock feed from the remaining parts of the kernel, including protein and fat.
Corn is a very versatile grain – and when processed in ethanol plants, “wet” mills or “dry” mills, its components can be made into many kinds of feed ingredients for livestock, with the corn and livestock industry calls “co-products.”
When ethanol for fuel is made, only the starch portion of the kernel is used. Other co-products include distillers grains, feed-grade corn oil, corn gluten meal, corn gluten feed, corn oil and corn germ meal.
Corn exports out of Nebraska are divided into two categories: foreign and domestic. “Foreign exports” involve corn sales to countries around the world. “Domestic exports” includes any corn that is shipped from Nebraska to another state in the U.S., with California being the largest market for Nebraska corn, taking about 145 million bushels of Nebraska corn mostly for livestock and poultry last year. Foreign sales make up about 6 percent of corn usage, with Mexico (via rail) being a top market.
Livestock is one of the corn grower’s most important customers, consuming more than 41 percent of all U.S. corn, including the supply of distillers grains, which are produced by corn ethanol plants.
In Nebraska, livestock production is the engine that powers state’s economy. It is a more than $7.5 billion industry that is fundamental to the well-being of Nebraska – and contributes in some way to the financial health of every Nebraskan.
About 16 percent of the Nebraska’s corn crop is fed to livestock within Nebraska, with the bulk of that (more than 70 percent) going to beef cattle. See complete breakdown.
In total, though, about 40 percent of the corn grown in Nebraska is fed to livestock somewhere in the United States or around the world.