12/19/06 Wheat "collateral damage" in biofuels

Farm and Ranch December 19, 2006 Where does wheat fit in the move to biofuels? Ross Korves, an independent economic policy analyst who spoke at the recent Pacific Northwest Grains Conference in Portland, said wheat is not in the midst of this bio-energy boom which focuses primarily on corn ethanol plants. He says you might consider wheat "collateral damage" though because it will be impacted. Korves: "And the bottom line is that corn wants to pull acres from anywhere it can. Soybeans are the first ones but it is going to pull from wheat." Korves told northwest grain producers that wheat was losing acres when corn was two dollars and soybeans were five. Korves: "What will happen at $3.50 and $6.50. From an economic standpoint either the price wheat goes up or you keep losing those acres." Korves says the acreage battle will be primarily in the Plains states but northwest growers will be affected as corn prices go up which also pulls up wheat prices. Korves: "But if the wheat in the U.S follows, the price of wheat in the world follows and a whole bunch of other people in the world get in the wheat business. So you are caught between real rock and a hard spot here." Korves sees Russia, the Ukraine and the "Stans" as producing more wheat. Korves: "My pitch here is that, and here again biotechnology in wheat is a few years away if you started tomorrow morning an aggressive program it would take three or four years to make a difference. But if you look where some of your competitors are going to be long term, they are countries that are probably not going to adopt technology at a real rapid rate so you would have a leg up on them." I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.