|
| | ||
| ||||
| ||||
| ||||
| HOME | ABOUT US | CONTACT US | SUBSCRIBE | NEWSSTAND LOCATIONS | ||||
| ||||
|
|
| | |
Wisner says ethanol is most dramatic change ever in ag country Tuesday, June 26, 2007
Agri News staff writer
ROCHESTER, Minn. -- Iowa's Robert Wisner argues that ethanol is the most dramatic change to ever occur in the agriculture sector.
Ethanol is consuming 2.15 billion bushels of corn, said Wisner, an Iowa State University economics professor, speaking at the recent National Farm Management Conference. The plants under construction will consume another 2 billion bushels and plants soon to be built will eat up another 0.2 billion bushels, for a total of 4.35 billion bushels or about 30 percent of the nation's corn crop.
A footprint that large will have impacts. Consumers will see the impact of ethanol in higher food prices, Wisner said. The ethanol-fueled corn prices will pull more acres into corn production in Argentina and Brazil. More corn storage space will be needed in the United States, along with more tank cars for ethanol movement and agronomic research for growing corn-on-corn.
This fall's harvest will need 40 percent to 50 percent more storage space because of the indicated increase in corn acres, Wisner said. There are 3.5 to 4 times more bushels per acre of corn to handle, dry, store and transport compared with soybeans.
The jump in corn acres was fueled by an ethanol boon that has its roots in the 1990 Clean Air Act, said Doug Tiffany, a research fellow in agricultural energy production and use at the University of Minnesota. The act set RFG and oxygenated gas standards. MTBE and ethanol were the two oxygenates of choice.
When MTBE began showing up in ground water and Congress refused to grant liability protections, ethanol became the oxygenate of choice. MTBE was phased out in 2006. Ethanol is now 5 percent of the nation's gasoline supply, Tiffany said.
The industry is coming off two very profitable years, Tiffany said, and that success has attracted outside investment.
In Iowa alone, there are 34 plants planned, but not yet under construction. Thirty plants operate in the state. Ethanol has been manufactured in Iowa for 30 years, Wisner said, but its rapid growth of the last year is unprecedented.
Tiffany predicts the industry will continue to expand until profits are diminished by higher capital and operating costs. Plants are already seeking cost controls by turning to coal and biomass to replace high-priced natural gas, he said. Wisner predicts ethanol plant growth will continue in 2009 and 2010, but profits will be less in the next 18 months than in the previous 18. |
| | |
| |
Copyright 2008 Agri News
All Rights Reserved
