Summit Notebook

Audio – Why farmers like corn better than soybeans

Verasun Chairman and CEO Don Endres says he doesn’t see soybeans taking the lead from corn in production of biofuel, despite the high prices of corn.

“From a farmer perspective … the economic benefit, in most cases … a corn acre is a better acre,” he said. “We looked at the biodiesel model for soybean based plants, their margins are very tight today.”

Audio – Pay a penny more for corn flakes? “Big deal.”

Demand for corn-based fuel, such as ethanol, might increase corn prices — but there would not be a significant hit to the consumer, says Iowa Renewable Fuels Association President Monte Shaw.

“A 12-ounce box of cornflakes costs $2.79, but there’s less than a penny’s worth of corn in it. So let’s say that corn goes from $2 to $4, well you’ve just changed the price of cornflakes from $2.79 to $2.80. Big deal.”

However, Shaw acknowledged that “If you are the livestock industry and we have a bad weather year, there could be some issues there.”

Shaw was speaking in a phone interview at the Reuters Global Biofuels Summit 2007.

He also gave his views on how the Bush administration could give ethanol a boost.

Audio – Biodiesel futures 3-5 years away?

A Chicago Board of Trade official said on Tuesday he would expect that biodiesel could have its own futures contract in 3-5 years.

“But these things aren’t necessarily linear, either. government incentives could come into that market and it could expand much quicker than we think,” said Dave Lehman, managing director and chief economist, business development at CBOT.

He added that the distiller’s dry grain market could see a futures contract even before biodiesel. Distiller’s dry grain is a by-product of corn-based ethanol production.