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ccelerated growth in corn useor ethanol has led critics toquestion corn growers’ abilityto satisy demand or both renewable uelsand traditional markets such as livestock andpoultry eed, ood processing and exports.Skeptics contend the corn industry will beunable to meet demand and that choiceswill need to be made about which corncustomers will be supplied rst. Others saycompeting uses or grains will drive cornprices—and, in turn, retail ood prices—toabnormally high levels. Those who say we must prioritize thedemands on grain in a “ood vs. uel” scenarioare not taking into account the dramaticadvances in seed technology, improvedagricultural eciency, innovations in biouelsproduction and other breakthroughs that areallowing the American armer to meet theworld’s need or ood, eed, uel and otheruses. The undamental societal needs o energy,security and mobility are interconnected withthe basic need o nourishment. I the U.S.agriculture sector has the technology andingenuity to have a positive impact in all o these areas, shouldn’t it aspire to do so?Industries change and evolve in response tonew technologies and new markets. Insteado relegating agriculture to its traditional roleas a eed and ood supplier, shouldn’t wewelcome the ability o American armers tohelp our nation meet its energy challengesas well? This paper examines the allacy o stating wemust choose between ood and uel—andprovides accurate inormation and veriabledata to reute the “either-or” scenarios thatare being touted by those who say we mustmake a choice between ood or uel. As theyhave done or decades, U.S. corn growerswill continue to be reliable suppliers o both

food AND fuel.

U.S. Corn Growers:Producing Food & Fuel

The ethanol industry in the United States is hitting its stride inresponse to America’s need or a domestic, renewable source o transportation uel. Corn use or ethanol tripled rom 2001 to 2007.The U.S. Department o Agriculture estimated 4.0 billion bushels o corn will be made into ethanol in 2008/09. More than 160 biorefneriesare in operation and dozens more are under construction.

Source: USDA, ERS; ProExporter NetworkNote: 09-10 to 11-12 are based onProExporter Network projections

6065707580859095

01 - 02 02 - 0 3 0 3 - 0 4 0 4- 0 5 0 5 - 0 6 0 6 - 0 7 0 7 - 0 8 0 8 - 0 9 0 9-1 01 0-1 1 1 1 -1 2

m i l l i o n b u s h e l s

U.S Corn Acres, 01-02 to 11-12

Acres HarvestedAcres Planted

Demand or corn is at an all-time high, due inlarge part to the rapid increase in corn-basedethanol production to meet our nation’senergy supply and security challenges. Otenoverlooked is the act that corn supply iskeeping adequate pace with demand.In response to increased demand, U.S.growers have produced the ve largest corncrops in history over the past ve years—withthe 2007/08 crop supply at an all-time recordo 14.4 billion bushels. Annual productionaveraged 11.3 billion bushels rom 2003/04to 2007/08, compared with an average o 9.5billion bushels in the previous ve crop years.Corn growers plant acres in response tosignals rom the marketplace. I demand orcorn is high and projected revenue-per-acreis strong relative to other crops, armers willplant more corn. That is exactly what is happening. In 2007,armers planted 93.6 million acres to corn,a 19 percent increase over 2006 and thehighest level since 1944. In 2008, armersplanted 87 million acres to corn—whichreects decisions based on the rise in priceso other commodities. However, increasedyields per acre and the corn stocks rom theprevious year will help meet the demand orcorn.Even with the weather challenges posed orthe 2008/09 corn crop, USDA reports higher-than-expected corn acres planted with morethan a 12 billion bushel harvest. Data romProExporter Network estimates corn stocksover one billion bushels in 2008/09 in lighto increased demand. There is no shortage o corn in terms o total supply and demand.

“...as you look at the eect o molecular breeding, instead o getting that one bushel-per-acre rate o gain each year, you get two or three. As youlook at the biotechnology traits, particularly drought and ertilizer eciency, we think that it’s possible to see thosenational averages push 250 to300 bushels per acre.”

Robb Fraley, Monsantovice president andchie technology ocer

“The development o new technologies, combined with yield improvement, point tothe opportunity to producemore ood and more uel—and not just in this country, but throughout the world.”

Patricia Woertz,chairman and CEO o Archer Daniels Midland

Source: USDA, ERS; ProExporter Network Note: 08-09 is based on ProExporter Network projections

m i l l i o n b u s h e l s

700080009000100001100012000130001400015000

8 8 - 8 9 8 9 - 9 0 9 0 - 9 1 9 1 - 9 2 9 2 - 9 3 9 3 - 9 4 9 4 - 9 5 9 5 - 9 6 9 6 - 9 7 9 7 - 9 8 9 8 - 9 9 9 9 - 0 0 0 0 - 0 1 0 1 - 0 2 0 2 - 0 3 0 3 - 0 4 0 4 - 0 5 0 5 - 0 6 0 6 - 0 7 0 7 - 0 8 0 8 - 0 9

Supply Total Use

U.S Corn Supply & Total Use, 88-89 to 08-09

Corn supplies keeping up with record demand.

Increasing yield per acre will ensure anadequate supply o corn or all markets in theuture. On average, corn yields have increasedby about three bushels per acre per yearsince the 1995-96 crop year. Based on the 10-year historical trend, average corn yield couldreach 175 bushels per acre by 2015/16. Cornyields could advance at an even aster ratewith improved corn genetics, biotechnologyand management practices.

“I you have to single out the…greatest contributor tohigher prices, it is energy. Fuel contributes costs to ood at every step: growing, processing, packaging and shipping.Higher energy costs also driveup the overhead or grocers,restaurants and warehouses.”

Ed Maxiner, editor o the KiplingerAgricultural Letter

100110120130140150160170180

9 7 - 9 8 9 8 - 9 9 9 9 - 0 0 0 0 - 0 1 0 1 - 0 2 0 2 - 0 3 0 3 - 0 4 0 4 - 0 5 0 5 - 0 6 0 6 - 0 7 0 7 - 0 8 0 8 - 0 9 0 9 -1 0 1 0 -1 1 1 1 -1 2 1 2 -1 3 1 3 -1 4 1 4 -1 5 1 5 -1 6

Source: USDA, ERS; NCGA

U.S. Corn Yield, 10-Year History and Trend

Source: USDA, ERS; ProExporter Network Note: 08-09 Demand Figures from ProExporterNetwork; growth is absolute, 98-99 to 08-09

300040005000600070008000900010000110001200013000

9 8 - 9 9 9 9 - 0 0 0 0 - 0 1 0 1 - 0 2 0 2 - 0 3 0 3 - 0 4 0 4 - 0 5 0 5 - 0 6 0 6 - 0 7 00 8 - 0 9 7 - 0 8

m i l l i o n b u s h e l s

All Other DemandsEthanol Demand

Ethanol Use vs. All Other Corn Uses

Other corn demand categories such aslivestock production and exports haveshown limited uture growth—meaningthat increased corn supplies will result inmore corn available or biouels production.Demand or corn in the livestock and poultrysector has been relatively at in the last 10marketing years. The amount o raw eldcorn ed to livestock is expected to declineslightly as more corn is displaced by distillersgrains, a co-product o ethanol production.Furthermore, the amount o corn used orhuman ood processing has been at—andcorn exports have trended up only slightly.Even as corn use or ethanol has risendramatically over the past 10 years, Americanarmers have continued to be the world’s topexporter o corn—satisying the demands o oreign customers. Corn exports have stayedsteady or expanded slightly and, throughexports o distillers grains, the ethanol sectoris helping satisy oreign demand or high-protein, high-energy livestock eed. TheUnited States exported about 2.4 millionmetric tons o distillers grains in 2007. Those who say ethanol production is takingood away rom humans orget there are twotypes o corn grown in the United States.

Corn demand or ood and eed is leveling of.