The ethanol revolution has arrived. While the future has many uncertainties, it is clear that a sufficient number of ethanol plants are currently being built to already call this a revolution that will change the nature of corn demand and corn price relationships.
While the Western Corn Belt continues to build the most new facilities, the Renewable Fuels Association currently list nine new facilities east of the Mississippi River under construction or expansion (http://www.ethanolrfa.org/industry/locations/). These include one in Wisconsin, two in Illinois, three in Indiana, and three in Michigan. In addition, these states plus Ohio have a number of additional plants that have been announced, but not yet under construction.
Capacity at the new plants currently under construction is estimated at nearly 500 million gallons of ethanol per year, requiring about 175 million bushels of corn. With more plants to come, that number will grow. As an example, six new plants may be in production in Indiana by 2008. These will require additional corn equivalent to about 18 percent of the state’s current production.
The ethanol revolution has raised concerns in the animal industries of the Eastern Corn Belt and the Southeastern U.S. In particular, how much will corn prices rise as a result of these large new corn demands? and can animal industries get enough value back from the feed product to offset the potentially higher corn prices?
Cattle Network
News
Discussions
Resources
Members
The ethanol revolution has arrived. While the future has many uncertainties, it is clear that a sufficient number of ethanol plants are currently being built to already call this a revolution that will change the nature of corn demand and corn price relationships.
