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Less Corn Bad News For Ethanol Industry
By Mr Ethanol | April 4, 2008
Medill Reports:
More trouble is in store for the already ailing ethanol industry based on a government report released earlier this week.
The United States Department of Agriculture forecasts there will be 8 percent fewer acres of corn planted this year compared with last year, which will likely raise the price and further squeeze ethanol producers, industry experts said.
“This doesn’t really bode well for anybody who’s a purchaser of corn right now,” said Ann Gilpin, an analyst at Chicago-based Morningstar Inc., who covers Decatur, Illinois-based ethanol producer Archer Daniels Midland Co.
The USDA report said American farmers expect to plant 86 million acres of corn this year, 7.6 million acres fewer compared with last year. Even so, the number of acres of corn projected to be planted this year is the second-highest since 1949.
Adding to the squeeze is the United States’ dwindling corn reserves, which are the lowest they have been since World War II, Gilpin said. At the beginning of the 2007 growing season, the U.S. had 1.3 billion bushels of corn on reserve, compared with nearly 2 billion bushels in 2006 and 2.1 billion in 2005, according to data from the USDA. These reserves are increasingly being used for ethanol production or being exported, said Ty Kalaus, a statistician at the USDA. More.
Photo: Dani Simmonds.
Topics: Agriculture, Ethanol, Industry, News |
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