Ethanol demand ticks up in 2010

Purchasing.com
Dave Hannon and Tom Stundza -- Purchasing, 2/17/2010 12:33:37 PM

Ethanol industry is ramping up production to meet increased demand
A recent report from the U.S. Department of Agriculture (USDA) forecasts that ethanol demand will remain strong for an extended forecast period; as a result, corn demand and corn prices will remain high.

The USDA report says, "Although increases in corn-based ethanol production in the U.S. are projected to slow, ethanol demand remains high and affects production, use, and prices of farm commodities throughout the sector." The report goes on to say that "expansion in the U.S. ethanol industry is projected to continue, although the pace is assumed to slow from the rapid gains of the past several years."

The USDA maintains that corn is expected to remain the primary feedstock for U.S. ethanol production. And, according to the latest forecasts from the U.S. Department of Energy, projected ethanol production, which averaged 700,000 barrels/day in 2009, "increases to an average of 800,000 bbl/d in 2010 and 850,000 bbl/d in 2011." EIA forecasts that liquid fuel net imports (including both crude oil and refined products) will fall by 150,000 bbl/d in 2010 and then rise by 160,000 bbl/d in 2011, after having fallen by 1.42 million bbl/day during 2009."

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