USDA’s July World Ag Supply & Demand Estimates report, released July 12, indicated a milestone in U.S. corn history. According to the report, USDA estimated ethanol demand for U.S. corn, at 5.05 billion bushels in 2010/11, would exceed livestock feed demand (5.00 billion bushels) for the first time. USDA said the trend would continue in 2011/12, with 5.15 billion bushels of corn used for ethanol, and 5.05 billion bushels for livestock feed and residual use.
The Renewable Fuels Association begs to differ. According to RFA’s Matt Hartig, USDA’s calculations assume more than 14.1 billion gallons of ethanol production for the 2010/11 marketing year, based upon the industry
average of 2.8 gallons per bushel and the USDA estimate of 5.05 billion bushels of corn.
Hartig said actual U.S. ethanol production, based on weekly trends so far in 2011, puts calendar year 2011 ethanol production on pace for 13.7 billion gallons. Even with RFA’s more conservative ethanol yield from corn use at 2.77 gallon per bushel, total gross corn use in ethanol production would be less than 5 billion bushels in 2011.
Additionally, the USDA estimate fails to account for ethanol co-products of distillers grains, corn gluten feed and corn gluten meal, which RFA estimates returns approximately one-third of the corn into livestock feedstuffs. Based on those factors, RFA said total net corn use for ethanol will be 3.3 billion bushels, instead of USDA’s estimate of 5.05 billion bushels.
