US group says ethanol helps extend corn supply

14 October 2008 21:54  [Source: ICIS news]

HOUSTON (ICIS news)--The US ethanol industry - although a major consumer of corn - also helps extend US corn supply by producing large quantities of livestock feed, the Iowa Renewable Fuels Association (IRFA) said on Tuesday.

The statement is part of an ongoing campaign by the US ethanol industry to fend off critics, who claim that growing demand for corn by US ethanol makers is driving up the cost of food.

The campaign includes TV ads that began airing in the last week of September.

The IRFA said it is too often overlooked that one third of every US bushel of corn processed into ethanol results in livestock feed that goes back into the market.

“US ethanol plants produce enough grains to feed all the cattle in Texas, Nebraska, Kansas and Colorado,” the IRFA said, quoting data from the Renewable Fuels Association (RFA).

According to the RFA, ethanol mills in the US produced 23m tonnes of livestock and poultry feed last year, or nearly three times the amount of wheat, sorghum, barley and oats that was fed to US livestock in 2007/08.

The RFA claims livestock feed produced by ethanol makers displaced about 1bn bushels of corn in 2007/08, an amount equivalent to roughly 15% of total corn use for feed, the association said.

The US Department of Agriculture (USDA) estimates the US ethanol industry will use 4bn bushels of corn in 2008/09, about one third of a projected corn crop of 12bn bushels in the period.

However, the RFA claims that figure is “misleading” because it does not take into account the impact of livestock feed co-product on net corn usage.

Based on its estimate, which accounts for the impact of livestock feed, the RFA says US ethanol makers will use only 2.9bn bushels of corn in 2008/09, or 23% of total projected corn usage.

In 2007, the US produced a record 13.1bn bushels of corn, 3bn of which was used to make ethanol, according to the USDA.

The US is the world’s largest ethanol producer with 10.7bn gal/year of capacity as listed by the RFA.

For more on ethanol visit ICIS chemical intelligence
Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels

By: William Lemos
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