Global demand and supply considerations are equally important.
This week, the USDA will release a couple of very important reports about the supply of corn currently being stored in America as well as the planting intentions of farmers for the upcoming growing season. No matter the reporting, critics of ethanol production will pounce on the reports as a more “proof” that ethanol is raiding supplies of corn and driving up the price of food.
This fictional food vs. fuel debate is one that has plagued America’s ethanol industry from the beginning, and it threatens to derail the continued growth and evolution of the industry. This faux debate is as important to future ethanol producers as it is to existing ethanol producers. And, those looking to capitalize on starch-based ethanol’s public relations struggles need to be cognizant of the fact that if current ethanol producers fail, next generation ethanol producers will be next on the hit list.
But first, let’s discuss some of the facts around American ethanol production and the use of corn. Producing 2.8 gals. of ethanol requires just one-third of every bushel of corn entering and ethanol facility. Another third of the bushel is refined into a highly valuable livestock feed that is resold into the livestock feed markets. The remaining third of each bushel is converted to carbon dioxide which some plants capture and sell to soft drink bottlers and dry ice manufacturers.
To read the entire article, link here.
For additional information, check out Ethanol Uptick And Corn Use Examined. Read Troy Marshall's column, Ethanol Subsidies -- The Gift That Keeps On Giving.