Corn use for ethanol up 33% in 2008-2009 – USDA

09 May 2008 18:37  [Source: ICIS news]

HOUSTON (ICIS news)--US ethanol plants will consume 33% more corn in the 2008-2009 agricultural year than in the 2007-2008 season, the US Department of Agriculture (USDA) predicted on Friday.

In its first set of projections for the coming crop year, USDA forecast that 4bn bushels of corn would be used as ethanol feedstock in 2008-2009, up from a revised estimate of 3bn bushels for 2007-2008.

That consumption would represent 33% of the 12.125bn bushels expected in the 2008-2009 harvest, up sharply in relative terms from a 23% share of 13.074bn bushels in the previous farm season.

USDA also projected that the average farm price for corn would be $5.00-6.00/bushel (€3.25-3.90/bushel), up from $4.10-4.40 in 2007-2008.

The surge in prices for corn and other agricultural commodities, as well as ammonia and other fertilizers, has triggered a backlash against the US ethanol industry. The industry in turn maintains that crude oil prices are a bigger factor than biofuels in food costs.

The US ethanol industry has been fostered by political support and government subsidies for years, but many in Congress are now calling for a lowering of aggressive official targets for ethanol production.

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By: Stephen Burns
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