Out-of-state corn buyers are snapping up Iowa's record harvest, which some experts say could eventually lead to a shortfall for ethanol producers.
The U.S. Department of Agriculture's most recent crop production report from earlier this month, showed Iowa farmers harvested a record 2.44 billion bushels of corn from a record 13.95 million acres.
That corn is funneling out of the state fast. Roger Ginder, an Iowa State University Extension economist, credits a weak U.S. dollar for strong exports and for corn users being more aggressive in stocking their inventories.
Ginder said concerns over a storage shortage haven't held, because farmers and grain elevators have built additional space in recent years. He also said strong demand for last year's crop cleaned out many places, leaving plenty of room for this year's bulk.
Despite higher prices for Iowa crop, demand is strong because end-users of corn are making money, according to Roger Fray of the Ralston-based West Central Cooperative.
"There is rapid movement of corn bound for poultry producers in the mid-South, California dairies, west Texas feedlots and Texas Gulf Coast ports," Fray said. "It's been a very traditional grain marketing pattern for Iowa."
He said ethanol producers are also buying corn, which is helping sales for elevators that are located close to plants. With 28 ethanol refineries, Iowa produces almost one-third of the nation's ethanol.
But the swift out-of-state shipping could possibly result in a shortfall of corn needed for ethanol production next summer, said Charles Hurburgh, an ISU professor of agricultural and biosystems engineering.
"Stay tuned," he said. "This could be an interesting development when ethanol plants are looking for corn to make fuel in July."