Wallaces Farmer

Yields increase while most markets idle. Biofuels are the exception and are again poised for growth, bringing profitability to farmers and clean air to consumers.

3 Min Read
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Two billion bushels of carryout means two billion bushels of profit potential remains untapped from the 2019-2020 growing season. This surplus grain is not due to expanding agricultural fields. Innovation on existing land has enabled yields to increase year after year. 


The USDA's September Market Outlook forecast assumes an average yield of 178.5 bushels per acre, up from last year's 167.8. In a healthy market, increasing yields would be a good thing for farmers. However, the USDA also forecasts a 2020-21 year-average corn price down from recent years.


For generations, yields have outpaced demand for grains, which has led to overproduction. In turn, grain values have dropped below the cost of production, leaving little to no margin in agriculture. With declining profits and increasing carryovers, there is little room for farmers to invest in existing and emerging technologies to create a better, healthier environment.            

                
The potential of agriculture to combat the climate crisis is just beginning. Plants like corn soak up carbon dioxide, the main greenhouse gas contributing to climate change, from the atmosphere and store it in the plant above and below ground. Practices like no-till farming, planting cover crops, precision ag and other techniques that reduce soil disturbance all improve the carbon sequestration capacity of the soil. Because agriculture makes up about 40% of the land in the U.S., investing in technologies to turn this land into a carbon sink is arguably the most powerful tool we have in the critical fight against climate change. 


But how can we return agriculture to successful operations to lead the fight against climate change?


In the early 2000s demand for corn, soybean and wheat from exports and most other markets remained stagnant. Biofuels were the exception. As the domestic market for corn from the biofuels industry grew, it soaked up enough surplus grain to balance the commodity markets and help make agriculture profitable. Total gross farm income grew from $241.7 billion in 2000 to 41% of the U.S. fuel supply to 10%, replacing harmful petroleum with cleaner, bio-based fuel. But since then, growth has stalled, yields have continued to rise, values have declined and farm incomes have been cut in half.

 

With challenges like unpredictable weather patterns, international trade wars, regulatory uncertainty at home and now a global pandemic, to say it is harder than ever to be an American farmer would be a vast understatement. It is even harder to be a profitable American farmer. Watch this video to learn more about how biofuels can help! 



Farmers need successful operations to invest in more Earth-friendly practices, and to do so, they need strong markets for their crops. Luckily, biofuels are once again poised for growth. If the U.S. increased biofuel in the fuel supply from 10% to 15% nationwide, it would result in a market of almost 2 billion bushels of additional corn demand for the American farmer. This is two billion bushels of additional profit for American farmers and a greater volume of cleaner fuel for consumers. At POET, we're working on getting higher blends of biofuel into the marketplace so that our industry can grow right along with increasing yields and our product can help clean the air and improve human health. 


To bolster the domestic market for grain and return to successful ag operations, we need consumers to understand the environmental, economic and health benefits of fueling their vehicles with biofuels.


Help do this by sharing this article and learn more about how biofuels are the key to successful agriculture, and successful agriculture can change the world at poet.com/ag.

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