Biofuels To Incite Grain Demand Shift

The burgeoning biofuels market is soon to spark a demand shift affecting grains and soy, one analyst said Tuesday at the Dow Jones Indexes-AIG Mid-Year commodity outlook event at the Chicago Board of Trade. “This is going to have a tremendous dislocation on grain demand,” said Dan Basse, President of AGResource Co.

“I fear we’ll be ending up in somewhat of a food fight between the fuel industry and the food industry,” Basse said.

“The world needs to produce about 1.4-1.6 billion bushels (of corn) each and every year to keep up with the demand trends,” he said. This corn demand will likely increase next year, he noted. An additional 4.5 million acres of corn will be necessary in 2007 to meet U.S. corn ethanol demand, Basse said, and over 10 million acres in 2008.
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