The American Farm Bureau's economists largely agree with USDA's recently released agricultural projections for crop acreage, but AFBF predicts more corn use for ethanol in 2008-09.
The USDA report shows 86 million planted acres of corn in 2007/08 and 89 million acres in 2008/09 versus 86.5 and 91 million projected by AFBF. A Farm Futures survey released in January estimated that producers plan to plant 88.4 million acres of corn this spring.
USDA and AFBF each estimate 71 soybean acres in 2007-08, compared to Farm Futures' estimate of 69.5 million acres.
Other crop acreage projections line up fairly closely as well, including wheat, with both USDA and AFBF predicting 60 million acres in 2007-08, and cotton, which USDA projects to cover 13.7 million acres versus AFBF's 12.5 million.
AFBF's estimates of ethanol production's demand for corn are somewhat higher than USDA's in 2007-08, at 3.5 versus 3.2 billion bushels of corn, figures which AFBF Senior Economist Terry Francl says does not make up a great difference at an equivalent of 8.8 billion gallons of ethanol by USDA's prediction and 9.6 billion gallons by AFBF's prediction.
In 2008-09, however, AFBF's economists see ethanol production reaching 13.5 billion gallons of ethanol, creating a demand for 4.9 billion bushels of corn. USDA figures on a more conservative 3.7 billion bushels for 10 billion gallons of ethanol.
"It could be that the two estimates may approximate the parameters for ethanol use in 2008/09, with the actual number to depend on subsequent corn and crude oil prices in the intervening period," Francl says. "The other sensitive variable will be legislation that supports the biofuels industry 3-5 years in the future."