March 2, 2007

USDA forecasts 50 percent ethanol jump
 

The Agriculture Department's top economist said Thursday that the amount of corn processed into ethanol would jump by 50 percent next year as demand for the transportation fuel rises.

Keith Collins, the USDA's chief economist, said the amount of corn processed into ethanol would reach 3.2 billion bushels in the crop year that begins September 2007. For the year ending August 2007, the amount of corn used to make ethanol is expected to hit 2.15 billion bushels.

Driving this change is the remarkable increase in corn prices as the market revalues corn from its traditional feed and food uses' to making ethanol, said Collins said, according to a written copy of his remarks from the USDA's annual agricultural outlook forum.

President George Bush has set a goal of using 35 billion gallons a year of ethanol and other alternative fuels by 2017 - a five-fold increase over current requirements.

The U.S., which currently has 114 ethanol plans in operation and 78 under construction, produced about 4.9 billion gallons of ethanol last year, according to the Renewable Fuels Association, an industry trade group. By comparison, the country consumes roughly 140 billion gallons of gasoline per year.

Shares of Archer Daniels Midland Co., the country's largest ethanol producer, rose 8 cents to close at $34.43 on the New York Stock Exchange, where shares of Verasun Energy Corp. declined 36 cents, or 2.1 percent, to close at $16.97. Shares of Aventine Renewable Energy Holdings Inc. slid 13 cents to close at $15.86.