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  • From: CAVM AT aol.com
  • To: CAVM AT aol.com
  • Subject: [Market-farming] U.S. corn-based ethanol production reaches crossroads, study says
  • Date: Fri, 18 May 2007 07:45:45 EDT

U.S. corn-based ethanol production reaches crossroads, study says
 
By Tom Johnston on 5/18/2007 for Meatingplace.com
 
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
.

The full study is available at ISU's Web site by clicking here.




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  • [Market-farming] U.S. corn-based ethanol production reaches crossroads, study says, CAVM, 05/18/2007

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