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Increased Grain Prices: Logistics Challenges

Extension In-Service March 23, 2011 Charles Hurburgh, Iowa Grain Quality Initiative Connie L. Hardy, Extension Specialist Chad Hart, Extension Grain Economist. Increased Grain Prices: Logistics Challenges. Corn Use. Source: USDA. Iowa Ethanol Production and Corn Usage. Gross Revenue from

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Increased Grain Prices: Logistics Challenges

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  1. Extension In-Service March 23, 2011 Charles Hurburgh, Iowa Grain Quality Initiative Connie L. Hardy, Extension Specialist Chad Hart, Extension Grain Economist Increased Grain Prices: Logistics Challenges

  2. Corn Use Source: USDA

  3. Iowa Ethanol Production and Corn Usage

  4. Gross Revenue from Soybeans can be less than Net Revenue from Corn (land cost excluded)

  5. Corn Yield Potential Overall = 2.1 bu/a/yr; Last 10= 3.5 bu/a/yr; Seed industry = 4-6 bu/a/yr; +400-500 million bu/year Nitrogen use: 1.0-1.1 lb/bu down to 0.7-0.8 lb/bu Source: Monsanto, June 2010

  6. Fast Export Growth, Slow Yield Growth 2%/yr, 3 bu/acre/yr Trend Export Growth, Fast Yield Growth 1%/yr, 5 bu/acre/yr

  7. 3 bu/acre/yr yield increase

  8. 5 bu/acre/yr yield increase

  9. Corn Drying Capacity Needs

  10. Summary • Corn production is increasing faster than traditional uses can absorb. • Increase 3-5 bu/a/yr = 350-500MM bu • Major economic growth is several areas. • Huge surpluses very quickly if …… • Systems thinking in policy planning: • Corn, soybeans, other grains together. • Growth connected with acreage balances and continued process improvements So….

  11. Summary - OpEd Grain is not the only natural resource increasing in price Natural resource prices, especially grain, are locked to energy prices (Dermot Hayes) Food has been cheap; some of the world can now outbid us. Production agriculture is becoming more concentrated but has 2-5X the economic relevance of just 4 years ago. Will production agriculture learn the leadership and influence skills that protect other low number but high economic impact industries? OIL! Etc. Who will stand with our core business? It can supply both food and fuel.

  12. Where To Find Us… www.iowagrain.org Analytical Programs Quality Management Systems www.grainlab.org

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