CA Farmers Turning to Corn for Ethanol

By Published On: February 9, 2007

California farmers are responding to the state’s growing thirst for ethanol in its gasoline by preparing to plant more corn this spring. Observers expect the corn to displace tomatoes, potentially ricocheting through food markets to raise the price of salsa for the chips consumed during next year’s Super Bowl game. Amid a growing buzz about biofuels within the state’s agriculture industry, Richard Matteis, California Grain and Feed Association executive vice-president, said there’s an “uptick” in planting crops for ethanol. “One farmer tore out citrus and plums to grow corn.” The crop switch is in response to new ethanol production capacity that has come on line, as well as more plants on the drawing board. Anecdotal accounts by seed growers suggest that California farmers may increase corn production by some 30 percent in 2007 in response to growing demand from ethanol production plants, said Dave Kranz, California Farm Bureau Federation spokesperson. Even after the increase, however, California would still be considered a small producer of the grain. The state ranks 28th nationally as a corn producer, according to Kranz, with about 150,000 acres of the grain under cultivation. Most corn is grown in the Central Valley and San Francisco Bay Delta areas. The impact of new corn acreage is expected to ripple through agricultural product markets, said Kranz. A lot of it is expected to be grown on land now devoted to tomatoes used to make salsa, spaghetti sauce, and other canned products, he said. So just as the boost in corn prices to around $4 per bushel is raising the price of tortillas, as well as feed for dairy and chicken farms, expect the rising demand of ethanol plants for the grain to boost the price of tomato products later this year. Ethanol is not the only fuel causing farm product displacement. Biodiesel makers, for instance, also are interested in partnering with Central Valley growers to produce crops, such as soybeans and canola, to supply their plants, according to Lisa Mortenson, Community Fuels chief executive officer. Matteis noted that California land is not necessarily well suited for biofuel crops. Nuts, fruits, and vegetables are more profitable for farmers here, so it is unlikely that many growers will shift production to supply the biodiesel industry, he speculated.

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