By Marri Carrow
U.S. Grains Council
USDA-Chief-Economist-Joseph-Glauber-SpeakingU.S. agriculture exports are projected to be second-largest on record and surpass $100 billion dollars this year, second only to 2008 when agriculture exports surpassed $110 billion, Joseph Glauber, chief economist at the U.S. Department of Agriculture, told attendees of the U.S. Grains Council’s 50th Annual Board of Delegates Meeting.
“It’s a very big market,” he said.
The exchange rate is positive for U.S. exports, Glauber said, as the dollar versus export competitors’ currencies is favorable – and certainly better than the 2000-2003 period. He also referenced IMF data that showed the United States and Euro zone economies contracted in 2009 but recovering and turning positive this year and in 2011.
Glauber said there remains some question over how quickly the economic recovery will move forward – or whether it will falter. While sluggish growth continues in developed countries, developing countries like China and India are growing at a high clip. “We hope that continues … we need those economies to be strong,” he said.
Corn and Ethanol
While reviewing the status of the corn crop and how much of that crop goes to ethanol production, Glauber said it is important to realize that “we had a big transition” with the phase out of MTBE and a rapid increase of ethanol production from 2006 to 2008.
“The growth rate has tailed off a lot,” he said, and increases won’t be as large in the future as those seen during that period.
As the corn ethanol industry gets closer to a production capacity of 15 billion gallons – the threshold spelled out in the Renewable Fuels Standard – the growth of corn going to ethanol will slow down even further, he said, although there may be potential for corn ethanol to move beyond that 15 billion gallon limit. That depends on other factors, however, including corn ethanol being designated as an advanced biofuel and the ability of ethanol to get past a blend wall, which it is reaching already.
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