Monday, November 5, 2007 - 2:55 PM
53-15

Near Term Developments in Corn Supply and Demand.

Geoff Cooper, NCGA - Director of Ethanol and Business Development, Chesterfield, MO 63005

With more than 115 operating biorefineries and dozens more under construction, the U.S. corn ethanol industry is booming. These biorefineries produced nearly 5 billion gallons of renewable fuel in 2006, and production is expected to reach 6.5 billion gallons in 2007. As a result of rapid capacity expansion, the amount of corn used for ethanol production is increasing dramatically. Corn use for ethanol more tripled between 2001/02 and 2006/07. Accelerated growth in corn use for ethanol has led critics to question the industry’s ability to satisfy demand for both renewable fuels and traditional uses like livestock and poultry feed, food processing and exports. Critics suggest the corn industry will face difficulty in meeting demand and growers will experience a dilemma of whether to supply customers in the feed, food and export markets or to supply the burgeoning ethanol industry. Some industry observers argue that grain markets should adhere to a hierarchical approach that emphasizes grain’s utility as food and feed. Studies by the National Corn Growers Association indicate that improvements in ethanol production technology and increased corn production will allow corn producers to meet or exceed demand. Productivity enhancements will come in the form of increased yields, incremental increases in corn acres, new technologies, and the displacement of corn in livestock rations by distillers dried grain, a co-product of ethanol.

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