The thing about revolutions is that they never stop when it is convenient or desirable for merely one faction of the movement.

You need not be long-in-tooth to see that the move toward biofuels represents a change in agricultural fundamentals for the Midwest. Ethanol plants are chewing up corn at mind boggling rates. To count the number of plants in operation is to aim at a moving target, but as of this writing, the total was something like 105 plants in operation with 42 under construction and a handful of plant expansion projects. Currently operational plants produce better than 4 billion gallons. Plants under construction or expansion are expected to bring another 3 billion gallons to the total. That means the industry will reach the federal Renewable Fuel Standard mandate of 7.5 billion gallons annual production long before the 2012 target date. In fact, we’re likely to see that level of production in 2008.
Of course, even aggressive expansion of ethanol capacity is dwarfed by the nation’s annual 140-billion-gallon gasoline demand, but just meeting part of that need will change the countryside.

In 2005, some 1.4 billion bushels of corn were devoted to ethanol production. That represented 13 percent of the crop. Such demand will have obvious effects on crop rotation, with more corn after corn and quite possibly more retiring CRP acreage brought into crop production.

In 2006, total U.S. corn acres reached about 80 million. The Food and Agricultural Policy Research Institute suggests we’ll see 83 million acres of corn in 2007, the increase at the expense of soybean acreage. But longer-term projections from FAPRI point toward a 90-million-acre corn demand by 2010. That’s 7 to 10 million acres of corn to carve out of existing crop rotation or new ground.

How is it done? Price, of course. USDA economist Keith Collins claims that to reach 90 million corn acres, corn prices need to be $3.10 to $3.20. At those prices farmers will borrow more ground from soybeans, bring corn to new geography and bring some land out of CRP.

A look at the price boards as I write this shows the market telling producers to go for it.
But will we need 90 million acres by 2010? And if we do, for how long? The thing about revolutions is that they never stop when it is convenient or desirable for merely one faction of the movement. Corn growers and Midwest row croppers in general are glad for the demand brought on by corn-based ethanol. Yet, the biofuel revolution depends on a set of complicated variables including world oil price, domestic tax structure, farm programs, tariffs, engine technology and ethanol production technique.

At a recent renewable energy conference in St. Louis, I had the opportunity to listen to venture capitalist Vinod Khosla explain his vision for biofuels. Khosla is fanatic about corn-based ethanol being a stepping stone for a “biohol” future for U.S. energy. Emphasize “stepping stone.” Khosla would like to see subsidies paid to corn farmers removed as well as removing import tariffs on ethanol. He believes that for the revolution to be successful, the end product must be ubiquitous and cheap. Ultimately, he believes ethanol will get that way through advances in cellulosic ethanol production—extracting alcohol from stalks of corn stover and switchgrass rather than the starch and sugar of seed crops. Critics of cellulosic ethanol extraction say that the process has yet to reach profitable efficiency. That’s familiar sounding, isn’t it? I recall the same being said about corn-based ethanol a decade ago.

So will we need the 90 million acres of corn? Depends on how much of the movement is a corn-based revolution and how much is a biofuel evolution.