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January 27, 2012

 

US sees ethanol output boost on higher corn yields

 

 

The US is headed for a bumper corn output in the years to come, which will increase the stocks available for ethanol manufacture, the head of an industry chamber said Thursday (Jan 26).

 

The robust growth of the ethanol sector in recent years has altered the structure of the US corn market and ethanol producers now consume about 40% of the crop, sparking criticism that food supplies are at risk.

 

National Corn Growers Association Chief Executive Rick Tolman said corn use in ethanol will eventually rise from current five billion bushels although "there will be a plateau for a time."

 

"We've had reduced (corn) production in the last two years, but as we are able to increase production and work on new technology, I think it will continue to grow," he told reporters in Buenos Aires during a tour of Southern Cone farm areas.

 

"It will follow technology. As we produce more corn per acre, we'll have a certain amount of that go toward fuel production," said Tolman, head of the Missouri-based chamber.

 

He expects US corn yields to climb to an average 300 bushels per acre by 2030, almost double current yields. "That's going to allow us significantly more opportunity to grow," Tolman said.

 

Thomas Dorr, head of the US Grains Council, said the ethanol boom is not cutting into the amount of corn available for food.

 

"The corn being used for ethanol in the US is corn that was never going to have been produced," said Dorr, who also spoke to reporters in Buenos Aires.

 

"When the global economy began its stunning growth in the 1990s as a result of the fall of the Iron Curtain, there was an increase in the demand for energy. That fostered the corn industry's interest in producing for that market," Dorr said.

 

"Had that growth in demand not occurred, we would probably not have the production capacity that we have today," he added. "We would not have capitalised that technology and corn prices would probably be substantially higher."

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