January 13, 2011
USDA sees ethanol sector using more corn for fuel in 2011
The US ethanol industry is now forecasted to use 100 million more bushels of corn than previously estimated this year, USDA said Wednesday (Jan 12).
Ethanol producers are now seen consuming 4.9 billion bushels of corn in the 2010-11 marketing year, which is roughly 39% of all the corn that farmers will harvest, USDA said in its monthly World Agricultural Supply and Demand Estimates report.
A month ago, USDA was predicting 4.8 billion bushels of corn would go into ethanol in the 2010-11 marketing year, which began September 1.
Congress approved in December a one-year extension of an ethanol subsidy package that contains a 54-cent-per-gallon tariff on imports. Also, gasoline producers get 45 cents in credits for every gallon of ethanol they blend into the fuel.
Much of that corn used by ethanol producers eventually goes back into livestock feed and, therefore, back into human food production, in the form of distillers dried grains, or DDG, an industry spokeswoman said Wednesday (Jan 12).
DDG are a byproduct of ethanol and also a cheap and nutritious food source for animals, the spokeswoman said.
USDA also raised its forecast for corn production this year and lowered its prediction for corn going into livestock feed, lessening the supply impact of increased ethanol consumption, USDA said. But government economists still said in the January report they expect overall ending stocks to decline.
"Ending corn stocks for 2010-11 are projected 87 million bushels lower at 745 million [bushels]. The stocks-to-use ratio is projected at 5.5%, the lowest since 1995-96 when it dropped to 5%," USDA reported.