Biofuel mandates would make corn shortfall costly, experts say

[OKIsItJustMe]

http://www.news.illinois.edu/news/10/0324corn.html

Biofuel mandates would make corn shortfall costly, experts say

3/24/10 | Jan Dennis, Business & Law Editor | 217-333-0568; [e-mail]

CHAMPAIGN, Ill. — Grocery shoppers face hefty price increases if bad weather withers a U.S. corn crop that is now tethered to grain-intensive renewable fuel mandates, a new University of Illinois study warns.

A corn shortage, coupled with surging demand to meet government-ordered ethanol standards, could push cash prices to $7 a bushel, the study found, squeezing livestock producers and driving up prices for meat, milk, eggs and other farm staples.

Economists Darrel Good and Scott Irwin say federal policymakers need to forge solutions now to cushion the blow of a shortfall that history shows is a matter of when and how severe, not if.

“We believe everybody will be better off with a reasoned, well thought-out response if a crisis would occur rather than rushed, short-term solutions as the crop is burning up,” Irwin said.

...

[BrklynLiberal]

1. Perhaps if they would stop using it to make HFCS, things would improve.

[OKIsItJustMe]

3. Not as much as you might think

http://www.corn.org/foodseed.htm

[BrklynLiberal]

5. Even tho I am reluctant to trust those figures too much, as they are 4 years old and produced by the

corn industry, that chart still shows that HFCS represents the greatest use of corn besides its use as fuel.

Where does livestock feed fit in there...is that cereals and other products?

Increasing the cost of feeding livestock also increases the prices of those foods.

[OKIsItJustMe]

6. While not as specific as you might like

Here's an interesting graph:
http://www.ers.usda.gov/briefing/Baseline/crops.htm

...



Domestic corn use grows throughout the projection period, largely reflecting increases in corn used in the production of ethanol. Global economic growth underlies increases in U.S. corn exports.

• Most ethanol production in the United States currently uses corn as the feedstock, with close to a third of total corn use expected to go to ethanol production in 2009/10. The tax credit available to blenders of ethanol and the 54-cents-per-gallon tariff on imported fuel ethanol are assumed to remain in effect through the end of the projection period.


• While expansion in the ethanol industry continues, smaller gains for corn-based ethanol are projected over the next 10 years. This result reflects only moderate growth in overall gasoline consumption in the United States, limited potential for further market penetration of ethanol into the E10 (10-percent ethanol blend) market (the blend wall), and the small size of the E85 (85-percent ethanol blend) market. In the latter years of the projections, production of ethanol for fuel accounts for 34-35 percent of total corn use and corn-based ethanol production exceeds 9 percent of annual gasoline consumption.


• Feed and residual use of corn bottoms out in the initial years due to reduced meat production and increased feeding of distillers grains, a coproduct of dry mill ethanol production. Feed use rises through the rest of the projections as meat production picks up and growth in the availability of distillers grains slows with the reduced pace of corn-based ethanol expansion.


• Food and industrial use of corn (other than for ethanol production) is projected to rise over the next decade. Use of corn for high fructose corn syrup, glucose, and dextrose increases at less than half the rate of population gain, limited by consumer dietary concerns and other changes in tastes and preferences. Other food uses of corn are also projected to rise more slowly than the increase in population. Starch use of corn responds to industrial demand, rebounding as the U.S. economy recovers and then continuing to rise faster than population through the rest of the projections.


• U.S. corn exports rise in response to stronger global demand for feed grains to support growth in meat production. Nonetheless, the U.S. share of global corn trade drops below 60 percent by the end of the projections.

...

[JackintheGreen]

2. Whatever happened to Shrub's switch-grass initiative? n/t

[OKIsItJustMe]

4. Producing ethanol from corn is well understood

Celulosic ethanol production is still in its infancy.

http://bioenergy.ornl.gov/fileresources/news/4829df87-24d9-41cc-8c71-318d31296891.pdf

[JackintheGreen]

8. Well understood, maybe

but highly inefficient as a source of biofuel. I'd have to make some logical assumptions and run some numbers, but in the long run the money spent subsidizing corn and converting it into biofuel could be better spent researching alternatives.

One suggestion: raze Florida to the ground and plant the whole desolate mess with sugarcane. It might not provide enough biofuel, but it would get rid of Florida. :evilgrin:

Florida DUers, you can all move in with me while you find a new state to live in.

[OKIsItJustMe]

10. Sorry, I didn't mean to advocate for corn ethanol

The fact remains that we know how to do it. (Just ask the folks who brew Jack Daniels.)

[Nihil]

11. Yep, the brewing part is easy ...

> (Just ask the folks who brew Jack Daniels.)

... it's the distillation afterwards that makes *all* the difference!
:toast:

[JohnWxy]

7. 2009 was a bad weather year. Wet conditions slowed harvest. Yet, 2009 was a record year

for corn and soy bean harvests.


http://corncommentary.com/category/usda/"> USDA Nov 2009

Weather Taking Toll on Corn

By Cindy
Posted: November 10, 2009
USDA lowered its forecast for 2009 corn production in the latest report out today, due to lower yields. Despite the decrease, yields are still expected to be a record and production is still expected to be the second highest on record.

~~
~~

Within the Corn Belt, forecasted yields in Minnesota and Wisconsin increased, while Illinois, Iowa, and Michigan yields decreased.

High moisture, low test weights, and mold issues are getting to be major concerns throughout the Midwest. According to USDA, just 37 percent of the corn had been combined as of Sunday, compared to 82 percent average and even well behind last year’s slow harvest which was 69 percent complete at this time in 2008.
(more)

I couldn't find it now, but a portion of the 2009 crop ended left in the field as moisture and inability to harvest it rendered it ruined.


USDA - Jan 2010: 2009 Crop Year is One for the Record Books, USDA Reports

WASHINGTON, Jan. 12, 2010 – U.S. farmers produced the largest corn and soybean crops on record in 2009, according to the Crop Production 2009 Summary released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).

Corn production is 13.2 billion bushels, 1 percent above the previous record of 13 billion bushels set in 2007, and 9 percent higher than 2008. Corn yields reached an all-time high in 2009 at 165.2 bushels per acre, eclipsing the previous record of 160.3 bushels per acre set in 2004. Planted area, at 86.5 million acres, is the second highest since 1949, behind 2007’s 93.5 million acres.

(note: while production was up 9%, 2009 planted area was down 7.5% from the next highest planted area in 2007)

And THAT was in a bad weather year!

[Fledermaus]

9. The last energy bill capped the amount of corn available for fuel.

Corn is no longer the only feed stock and thats a good thing.

Allot can be learned from the Brazilian history of ethanol. Their first attempt was almost a failure.