Larkin Martin, chairman of the Federal Reserve Bank of Atlanta Chairman and a seven-generation farmer, discusses the advantages her background has on her view of the economy, energy's impact farming, and ethanol.
"As a farmer, we've responded to high commodity prices, and I'm told that ethanol off-take of corn is one of the reasons the corn prices are up," Martin said. "I'm also told that it's not the majority reason. The majority of the off-take is coming from increased demand in expanding economies around the world, and their consumption of meat. Corn is the main ingredient that goes into that product, so for a multitude of reasons, demand for corn globally, and ethanol is part of that, is up." (Watch the video for the full interview with Larkin Martin.)
Martin does think that renewable fuels will be part of the solution to filling the country's energy needs.
"Besides corn grain [for ethanol production], we could use the stalk, or wood products, or switch grass, or all the other things you hear talked about. That process, if it becomes commercially viable, and I hope that it will, will be a much bigger part of our energy solution," she said.
Higher corn prices have made it a good time for farming, but there are also higher costs for fertilizer and energy, she said.
"The variations in our profitability have a lot to do with things we can't control, but there are also some issues," she said. "The volatility in these commodity markets are difficult for farmers to manage. We don't always get a chance to sell our crops at the highest prices. They're available on the boards, but basis changes for us delivering the real product to elevators, and it can be a real challenge. We don't hit the highs, but on balance, with normal yields, prices are good."