USDA report sheds light on supply and demand in ethanol industry

The U.S. Department of Agriculture (USDA) released a report last week, which showed that the amount of corn necessary to make a gallon of ethanol is less than previously believed.

“What is most remarkable about this supply and demand report is the light it sheds on a topic of great concern to U.S. corn farmers -- recognition of the growing efficiencies in the ethanol industry,” NCGA President Chip Bowling, a Maryland corn farmer, said.

The USDA estimates the corn use in ethanol production was lowered by 50 million bushels; however, the overall drop was partly balanced by higher-than-expected production during the winter months.

The decline in demand was more than offset by expected increases in demand for corn from the export, feed and residual markets, which were at 50 million bushels each.

Amidst other adjustments, projected ending stocks were lowered by 50 million bushels, and the average farm price estimates were five cents higher at the average of $3.50 to $3.90 per bushel.

“For many years, we have strongly asserted that the ethanol industry continues to improve and those productivity gains should be taken into consideration," Bowling said. “With the simple justification offered for the analysis, USDA made a great step forward in showing its growing appreciation for the advances made in ethanol production and, thus, the ever-increasing benefit it offers Americans.”

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U.S. Department of Agriculture

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