October 11, 2008

US ethanol industry to cut corn use by 100 million bushels

US ethanol producers will reduce corn consumption by 100 million bushels in the 2008-09 marketing year, the USDA said Friday.

The USDA, in its new prediction, said "reduced gasoline consumption is expected to slow the expansion of blending modestly over the coming months."

Ethanol producers are now expected to blend 4 billion bushels of corn into ethanol during the 2008-09 corn marketing year, which began Sept. 1. The USDA forecast in last month's World Agricultural Supply and Demand Estimates report was for consumption of 4.1 billion bushels of corn.

There will be more corn produced this year for the 2008-09 marketing year, though, the USDA said Friday after raising its forecast. US farmers are now predicted to produce 12.2 billion bushels of corn, up from USDA's September forecast of 12.072 billion bushels.

Higher forecast yields are behind the new, increased production estimate, the USDA said. The national average corn yield was raised to 154 bushels per acre, up from 152.3 bushels per acre.

"Yield prospects improved in the central Corn Belt, central Great Plains and upper Mississippi Valley as September rains brought much needed moisture to the region," the USDA said in a separate Crop Production report, also released Friday.

The new 2008-09 carryout forecast has been raised to 1.154 billion bushels, up from last month's forecast of 1.018 billion bushels.