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Impact of Ethanol on Dry Bean Acreage James E. Byrum July 2007

Impact of Ethanol on Dry Bean Acreage James E. Byrum July 2007. Corn Demand for Ethanol will Continue to Impact Planted Acreage for Several Crops in 2008 and Beyond. NEBRASKA Ethanol Plants 13 Operating Plants 14 Plants Under Construction

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Impact of Ethanol on Dry Bean Acreage James E. Byrum July 2007

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  1. Impact of Ethanol on Dry Bean AcreageJames E. Byrum July 2007

  2. Corn Demand for Ethanol will Continue to Impact Planted Acreage for Several Crops in 2008 and Beyond

  3. NEBRASKA Ethanol Plants 13 Operating Plants 14 Plants Under Construction 1,645 MGPY* Production of Ethanol 660 Million Bushels of Corn per Year Annual Corn Production 1.18 Billion Bushels * (MGPY) Million Gallons of Production per Year

  4. MICHIGAN Ethanol Plants 4 Operating Plants 4 Plants Under Construction 430 MGPY* Production of Ethanol 172 Million Bushels of Corn per Year Annual Corn Production 289 Million Bushels * (MGPY) Million Gallons of Production per Year

  5. NORTH DAKOTA Ethanol Plants 4 Operating Plants 1 Plant Under Construction 260 MGPY* Production of Ethanol 104 Million Bushels of Corn per Year Annual Corn Production 155 Million Bushels * (MGPY) Million Gallons of Production per Year

  6. U.S. ETHANOL PLANTS 118 Operating Plants 79 Plants Under Construction 2007 Corn Production Estimate: 12.3 Billion Bushels

  7. CORN PRICES* • 1990 2.21 • 2000 1.90 • 2006 3.46 • 2007 3.30 July 20, 2007 3.10 * Dollars per Bushel

  8. CORN • StateCost/Acre1 Yield2 Price3Revenue4Profit4 • MN 325 166 3.10 - 3.80 515 - 630 190 - 305 • MI 325 150 3.10 - 3.80 465 - 570 140 - 245 • CND 240 100 3.10 - 3.80 310 - 380 70 - 140 • END 290 110 3.10 - 3.80 341 - 418 51 - 128 • NE 350 159 3.10 - 3.80 493 - 604 143 - 254 • 1 Estimated land values, dollars per acre; MN 150, MI 150, CND 60, END 110, NE 160 • 2 Bushels per acre • 3 Dollars per bushel • 4 Dollars per acre

  9. SOYBEANS • StateCost/Acre1 Yield2 Price3Revenue4Profit4 • MN 215 45 8.40 378 163 • MI 215 38.5 8.40 324 109 • CND 130 35 8.40 294 164 • END 180 40 8.40 336 156 • NE 230 50 8.40 420 190 • 1 Estimated land values, dollars per acre; MN 150, MI 150, CND 60, END 110, NE 160 • 2 Bushels per acre • 3 Dollars per bushel • 4 Dollars per acre

  10. DRY BEANS • StateCost/Acre1 Yield2 Price3Revenue4Profit4 • MN 295 16.5 25 - 30 412 - 495 117 - 200 • MI 250 18 25 - 30 450 - 540 200 - 290 • CND 210 12 25 - 30 300 - 360 90 - 150 • END 240 13 25 - 30 325 - 390 85 - 150 • NE 350 21.5 25 - 30 537 - 645 187 - 295 • 1 Estimated land values, dollars per acre; MN 150, MI 150, CND 60, END 110, NE 160 • 2 Bushels per acre • 3 Dollars per bushel • 4 Dollars per acre

  11. MICHIGAN CropProfit* Corn 140/245 Soybeans 109 Dry Beans 200/290 * Dollars per acre

  12. CENTRAL NORTH DAKOTA CropProfit* Corn 70/140 Soybeans 164 Dry Beans 90/150 * Dollars per acre

  13. EASTERN NORTH DAKOTA CropProfit* Corn 51/128 Soybeans 156 Dry Beans 85/150 * Dollars per acre

  14. Nebraska CropProfit* Corn 143/254 Soybeans 190 Dry Beans 187/295 * Dollars per acre

  15. CROP YIELDS* Dry Beans • 1976 14.25 Cwt./Acre • 2006 17.71 Cwt./Acre Corn • 1976 69 Bushels per Acre • 2006 143 Bushels per Acre *Average of MN,CA,CO,NE,MI,ID and ND

  16. OTHER CROPS • Farmers Like Wheat This Year • Decent Yields • Excellent Quality • Easy Harvest • Low Cost of Production • Great Prices

  17. OTHER CROPS • Soybeans • Great Prices • Strong Demand • Lower Cost of Production • Easy to Grow • Lower Harvest Volume (Bushels)

  18. OTHER CROPS • Dry Beans Are Not Out of Favor • Good Prices • Good Looking Crop • Strong Demand • Low Cost of Production

  19. CONUNDRUMS… • Farmers This Year Generally Were Not Able to Take Advantage of Great Commodity Prices • Contracted Earlier • Missed the Market While They Will Do Fine, Not As Well As We Would Like to Believe

  20. CONUNDRUMS… • Fertilizer • High Fertilizer Prices Are Scaring Farmers (and the Trade) • Availability is an Issue, and Well Known • Other Markets Will Not Go Away! • Wheat • Dry Beans • Soybeans

  21. PROJECTIONS • Corn Prices Have to Move Upward Before Spring • High Fertilizer Prices Will Cause Farmers to Shy Away From Corn in 2008 • Wheat, Dry Beans and Soybean Acreage Will Stay Stable, and Possibly Increase

  22. PROJECTIONS • Farmers Will Want To Maintain a Crop Rotation • Workload at Planting and Harvest • Prices Will Dictate Acreage • Better Manage Weather • Pest and Resistance Management They Will Want To Maximize Production and Profit Per Acre

  23. FUTURE ? • Ethanol Produced from Corn will not go Away • Corn Demand will Continue to Grow • Corn yields will Continue to Increase • All Commodity Prices will Rise • Competition for acres • “Sympathy” with Corn Prices

  24. FUTURE • To Secure Dry Bean Acres, Prices will Have to go up and Stay Strong • This is a world-wide phenomenon, not limited to the U.S.

  25. Questions or Comments?

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