Corn Crop (and grain ethanol) Suffering

The latest U.S. Drought Monitor has been issued and it still does not look good for much of the U.S. and half of the state of Wisconsin. Drought conditions have worsened in much of the country, however, a lot of the heavy rains that fell in the Ohio Valley, the Deep South, and the Gulf Coast states over the last few days has not been fully incorporated into the statistics so there might have been some significant improvement in spots – improvement that is not yet incorporated into the interactive map. With the expansion in drought over the last week, I think this is the most drought I have seen covering the U.S. since the inception of the weekly report.

In Wisconsin, there is no caveat to the most recent drought depiction because the southern part of the state has not received any appreciable rain in the past week. There has been very little rain in the northern half of the state either, but ample rain from earlier in the Summer means things are still green and growing around Marathon county and further north. In the south the crops are “almost done/dead” for the season and if rain doesn’t fall this weekend or early next week south of Marathon county, it will probably effectively be the end of the growing season for un-irrigated crops, because it looks like some dry weather for the area late next week and perhaps another couple hot days in the 90s around the 20th of July.

Considering that most of the country is experiencing some degree of drought, I am surprised by the latest USDA corn crop estimate. The latest estimate is for 146 bushels per acre harvest this year which is a significant drop from the previous estimate of 166 bushels per acre, but it is still higher than the average yield of a decade ago, which was around 129 bushels per acre. The last time drought was so widespread across the nation was 1988 and during that year the national corn yield was only about 85 bushels per acre. So why is the corn crop still expected to be so high this year even though it is the most widespread drought in many years? Technology. Here is a good article discussing the modern biotechnology and hybrid technology that helps corn grow in poor conditions. Not only has biotechnology helped corn yields, increased and smarter irrigation methods keep corn (and other grains) growing in dry areas of the country and areas that suffer from periodic lack of rain. I know quite a few people that do not like GMO foods (and for valid reasons) but you cannot deny how biotechnology at least keeps the food flowing. If grain yields were as low as 1988, we would be in much more of a world of hurt.

One industry that could be in a world of hurt if the drought continues and corn yields continue to drop is the ethanol industry. The economic (and AGW) case for using food (corn/grains) to make fuel for our polluting cars has been tenuous at best over the last few years. If the corn yield goes down anymore (and the price of corn continues to rise), it could make grain ethanol production grind to a halt. For which I would say – it is about time. Maybe if people start going hungry in this country, there will be more pressure to drop the ethanol mandate and any subsidies that go along with it. I hate to talk so negatively about an industry that is filled with a lot of honest and well-intentioned people, but grain ethanol just has to go. It had its test run. The numbers don’t add up in most scenarios. Some other people have mentioned the same thing.

Not only is the price of corn going up, but the price of oil is coming down, which means even other more potentially beneficial and economically sound biofuel production will get hurt. Even NASA’s investment in new biofuel production could get the axe, I suspect. I wonder if we would be much better off (if the government HAS to spend money) if the government just bought solar panels and installed them at various facilities across the entire nation. Instead of scandalous crony investments in businesses like Solyndra or new loans to money-losing ethanol and biofuel start-ups, why not spend those billions of dollars buying and installing solar panels. Several billion dollars could buy a lot of megawatts.

Have a nice Thursday! Meteorologist Justin Loew.

 

 

Posted under Ag Weather, Alternative Energy, Drought

This post was written by jloew on July 12, 2012

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