USDA Corn/Ethanol Supply and Demand Projections

Some interesting numbers from the USDA’s monthly World Agricultural Supply and Demand Report.  For the first time (I think), ethanol will be the largest consumer of corn (by sector) in the U.S.  In the past, feed for livestock has been the largest consumer.  Here are the numbers…

Feed: 37.7%

Food, seed, and industrial: 10.6%

Ethanol: 38.1%

Exports: 13.6%

Because of the heavy flooding in the corn belt this spring, supplies should be pretty tight this year, and we can expect this to push up prices for corn.  For those interested in the food/fuel debate, the strong domestic ethanol demand for corn alongside these supply disruptions could have interesting implications.

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3 Responses to USDA Corn/Ethanol Supply and Demand Projections

  1. Paul says:

    Concerning potential impact on world supply/demand & land use change, these guys have this to say:
    The use of corn for ethanol production in the United States quintupled between 2001 and 2009, generating concerns that this could lead to the conversion of forests and grasslands around the globe, known as indirect land-use change (iLUC). Estimates of iLUC and related ‘food versus fuel’ concerns rest on the assumption that the corn used for ethanol production in the United States would come primarily from displacing corn exports and land previously used for other crops. A number of modeling efforts based on these assumptions have projected significant iLUC from the increases in the use of corn for ethanol production. The current study tests the veracity of these assumptions through a systematic decomposition analysis of the empirical data from 2001 to 2009. The logarithmic mean divisia index decomposition method (Type I) was used to estimate contributions of different factors to meeting the corn demand for ethanol production. Results show that about 79% of the change in corn used for ethanol production can be attributed to changes in the distribution of domestic corn consumption among different uses. Increases in the domestic consumption share of corn supply contributed only about 5%. The remaining contributions were 19% from added corn production, and –2% from stock changes. Yield change accounted for about two-thirds of the contributions from production changes.

    Thus, the results of this study provide little support for large land-use changes or diversion of corn exports because of ethanol production in the United States during the past decade.

    © 2011 Society of Chemical Industry and John Wiley & Sons, Ltd

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