Grain demand to remain strong, ISU professor says
SHEFFIELD, Iowa -- Demand for corn will continue to be strong for the next 20 years, posing not only great opportunities for producers, but significant challenges, according to Dr. Charles R. Hurburgh Jr.
Besides the struggle to keep up with demand as the need for ethanol grows and standards of living improve in China and India, the industry will have to cope with great variability in weather and with significant workforce turnover, said Hurburgh, professor of agricultural engineering at Iowa State University.
Also, recent food safety legislation will result in much greater scrutiny of grain handling practices, he said.
Corn production has grown from 2 billion bushels per year 30 years ago to about 12 billion per year currently, but it’s still not enough, Hurburgh said, speaking in Sheffield to dealers of grain storage and handling equipment made by Sukup Manufacturing Co.
“We’re growing more grain and people are paying more for it. Worldwide, the demand for the product is real. We are still not keeping up with the pace of demand,” Hurburgh said.
The trend appears irreversible for many years, he said, in large part due to the demand for ethanol as an alternative to foreign oil. In 1980 there was practically no corn going to ethanol. Last year the total was 4.2 billion bushels, Hurburgh said. High gasoline prices will continue to drive strong demand for ethanol, he said. Regardless of politics or government programs, “The economy is telling us we need more alternative fuels.”
Corn yields have increased steadily, from 75 bushels per acre in 1970 to about 150 currently. By 2125 it could be about 230 bushels per acre, Hurburgh said, noting that the sharp increases in corn yield means there will continue to be great demand for bins and grain handling equipment.
And with the increasing emphasis on food security, it’s likely that storage on the ground will be phased out. Demand for large bins will be strong, requiring the equivalent of 14,000 additional 650,000-bushel (105’ diameter) bins by 2035, assuming a 4-bushel-per-acre-per-year increase.
At about $7 per bushel of corn, it’s expensive to cut corners on storage and lose grain to mold in outside storage, said Hurburgh, who also spoke in March at the Grain Elevator & Processors Society convention in Minneapolis. “I believe outdoor piles are a thing of the past.”
Another factor that will pose great challenges to the grain industry is the Food Safety Modernization Act, Hurburgh said. It will give the federal Food and Drug Administration broad power to inspect and monitor grain handling. “Grain handling, storage and drying is considered part of the supply chain” Hurburgh said. “I would expect that – not immediately, but eventually – (farmers) will get questions on cleanout of bins and management of bins.”
Grain handlers can prepare themselves for the coming scrutiny by cleaning up existing messes, starting on food safety plans, and documenting possible food safety problems. The food safety plan can be developed by creating a food safety team, creating a flow chart of handling operations, identifying hazards, developing a record-keeping system, and using data for improvements, Hurburgh said.
Overcoming workforce changes will take concerted effort, he said. Sixty percent of the U.S. workforce will retire in the next decade. That means there won’t be as many people with longtime agricultural backgrounds still on the job.
The industry will need to train more people through distance education, hands-on training, credentialing, two- and four-year degree programs, and applied research, he said.