U.S. corn-based ethanol
production reaches crossroads, study says |
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By Tom
Johnston on 5/18/2007 for Meatingplace.com |
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Corn-based ethanol production in the United
States has reached a critical point, according to a major
study
Conducted by the Center for Agricultural and Rural
Development at Iowa State University, the study reveals that U.S. retail
prices already have increased $14 billion annually as a result of the
nation's energy woes, and may soar if crude oil and corn prices reach $65
to $70 per barrel and $4.42 per bushel, respectively.
Given crude
oil prices, the United States could produce as many as 30 million gallons
of ethanol by 2012, but at the expense of more than half the country's
corn, wheat and coarse grains, say industry experts.
"This study
clearly shows that we are reaching a tipping point, and that over-reliance
on corn-based ethanol to meet mandates would further drive up retail food
prices, reduce domestic meat and poultry production and erode our meat and
grain export markets," said J. Patrick Boyle, president and CEO of the
American Meat Institute, one of the study's
sponsors.
Projections
Assuming season-average corn
prices over a 10-year period increase to $4.42 per bushel, as compared
with $2 per bushel, the study makes the following projections:
- Beef: retail prices increase 4 percent; production down 1.6 percent;
and prices for distillers grains with solubles will closely track corn,
meaning price increases are nearly as significant for beef and dairy as
for hogs and poultry.
- Pork: production declines 9.2 percent; production costs increase 6.8
percent; retail prices increase 8.4 percent; and exports decline 21
percent, reversing 15 consecutive years of pork export growth.
- Poultry: broiler exports down 15 percent; turkey exports fall 6
percent; wholesale broiler prices increase 15 percent; retail prices
increase 5 percent; and domestic consumption falls 4 percent.
- Corn: U.S. planted acreage increases 44 percent to 112.5 million,
and corn exports decline 63 percent.
- Soybeans: Planted acres decrease from 75 million in 2006 to 57.3
million, and exports drop 33 percent.
- Wheat: Plantings decline significantly to 42 million acres, and
exports decline to 483 million bushels
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The full study is
available at ISU's Web site by clicking here. |
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