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Tuesday, June 06, 2006

U.S. Ethanol Consumption Now Consumes Over 1/5th of Total Corn Production

Slightly more than 20% of the forecasted 10.55 billion bushels of corn to be produced in the US this year (about 2.15 billion bushels) will go toward the production of fuel ethanol, according to the US Department of Agriculture’s most recent World Agricultural Supply and Demand Estimates (WASDE). The use of corn for ethanol production is growing quickly with the 2006 forecasts representing a 34% increase over the previous year.

At 2.15 billion bushels, corn use for ethanol now matches for the first time projected exports of corn from the U.S., also forecast to be approximately 2.15 billion bushels in 2006, a 6% increase over 2005.

The USDA corn crop forecast of 10.55 billion bushels is 5% lower than last year’s production, Green Car Congress reports. Total corn supply, at 12.8 billion bushels, is down 3% as the smaller corn crop is only partially offset by higher beginning stocks.

Projected 2006/07 corn use is forcasted to expand 6% to a record 11.6 billion bushels. The increase in exports is due, according to the USDA, to reduced foreign competition and lower global feed-quality wheat supplies:

The 2006/07 global coarse grains outlook includes slightly lower production, increased consumption, and lower ending stocks. Smaller coarse grain crops in the United States more than offset higher foreign production. Production increases are significant for Argentina and EU-25. Global coarse grain trade is up slightly while consumption is up 2.7 percent. China’s corn stocks continue to fall; global corn ending stocks drop 29 percent to 92 million tons, the lowest in more than 20 years.

We seem to be nearing the maximum point for ethanol production from corn. I'm not a market economist, nor an agricultural expert (and feel free to comment if you are), but it doesn't seem like ethanol productionc an consume too much more of our corn crop. Maybe the share of corn used for ethanol will climb upwards of 40-50%, but even then, with the glut of new ethanol production plants in the pipeline, it won't take long before that happens. How much of our corn are we willing to divert to ethanol production?
[A hat tip to Green Car Congress]


Heiko said...

I think 90% could be dedicated to ethanol production, and corn production could double.

Americans don't eat corn (some corn syrup sweeteners aside), they eat meat.

Ethanol plants also produce dried distillers grain, which can be used for animal feed.

I haven't got hard numbers, or analysis, ready to support the above estimates. They are my "gut feeling", not an entirely uninformed guess, but still a poorly supported one.

Heiko said...

A quick google gave a nice reference:

They project 5.5 billion bushels for ethanol by 2015/16.

That will then be a bit over a third of that year's corn production, it'll be about half of last year's corn production.

They also think that'll be achieved with minimal increases in land use.

And they point out that in 1931 109 million acres were planted with corn, compared to 81.6 million last year, while simultaneously production went from 2.2 billion to 11 billion bushels.

So, it looks like my guess is about right. Getting land use up to the 1931 level, together with expected yield increases would about double corn production. And as most is for feed use and exports and ethanol already and HFCS and other uses only make up 13% of current usage, getting to 90% of doubled production by 2015/16 looks quite feasible in principle.

Compared to last year's 4 billion gallons, the reference suggests 18 billion gallons in 2015/16 from 5.5 billion bushels of corn.

Dedicating 20 billion bushels would yield some 60 billion gallons of ethanol.

Whether it's desirable to use any extra land, and the biotech to get continued yield improvements, etc. is another story,

but I find it a bit misleading to claim that ethanol from corn could never contribute significantly, because "even if we used all corn for ethanol it would only replace 20% of gasoline".

We can pretty much use all corn for ethanol in principle without any American having to starve (or even having to reduce their excessive calorie intake), and last year's corn production is hardly the all time limit.

And over 40% of current, gargantuan US gasoline consumption is hardly insignificant.

Anonymous said...

Jesse, please get a hold of me in some way and tell me your mailing address - the one I have expires June 17th :o)


Anonymous said...

Quit sell off our ag ground for housing starts, use land wisely before it is to late. We need more freedom from foreign oil than we need country homes which we can not afford. They won't take care of the homes with no job or fuel anyway.