On Tuesday USDA released its August World Agriculture Supply and Demand Estimates (WASDE) report. For corn, the report confirmed recent private estimates that the U.S. is on track to produce a record crop. The 2014 corn crop is estimated at 14.032 billion bushels. That is 172 million bushels higher than the previous record established in 2013 and new corn yield records are expected to be set in eleven different states. The report estimates 5.075 billion bushels of corn will be used to produce ethanol and its co-products, such as corn oil and distillers grains.
Ending stocks are projected to be 1.808 billion bushels, up 7 million bushels from July and the highest level of carryover stocks since 2005. Producer prices for the 2014 corn crop are projected to average $ 3.55 to $ 4.25 per bushel.
In response to the recent announcement by the USDA, Tom Buis, CEO of Growth Energy released the following statement: “It is clear from this report that the food versus fuel debate over the U.S. renewable fuel policy can be put to bed. Our farmers have once again proven we can produce abundant quantities of high quality food, feed, fiber and renewable fuel.
“Trying to blame the ethanol industry for high food prices makes great headlines, but is not supported by the facts. A 2013 World Bank study has proven that crude oil prices are responsible for 50 percent of the increase in global food prices since 2004. Meanwhile, the restaurant industry is reporting record-breaking profits— $683.4 billion forecasted in 2014, according to the National Restaurant Association (NRA). Additionally, the NRA reported that the restaurant industry has a 47 percent share of the food dollar. The American farmer, however, receives less than $0.18, and of that about three pennies go to corn.
“Furthermore, the June Consumer Price Index for food is up 2.3 percent over June, 2013. While food prices are rising at nearly the same rate as the overall index – up 2.1 percent year over year – the cereals and bakery products category, which includes consumer grain products declined 0.3 percent while meat products rose by 7.5 percent.
“It is downright disingenuous to see the executives of restaurants like Carl’s Jr., Wendy’s and White Castle perpetuate misinformation that corn prices are causing increased food costs. In fact, the decline in grain prices has reduced global food costs to a six-month low according to the United Nations.
“It is time to stop attacking a homegrown American industry that is creating jobs, improving our environment and mitigating climate change, all while decreasing out dependence on foreign oil and fossil fuels. It is time that the facts, not rhetoric drive the debate and today’s WASDE report should finally end these ridiculous claims. This report makes clear that the American farmer can fuel America and feed the world.”