Can We Rely On Ethanol And Biodiesel To Drive Market Demand?

Cattlenetwork.com
03/01/2010 09:49AM

The biofuels market has some significant challenges. If you are making farm management decisions, farm marketing decisions, farm land purchases, or anything that depends on premium commodity prices stemming from ethanol and soy-diesel, should you carry out those plans? After all, the tax credit for biodiesel has expired, and ethanol is being challenged by California policy and the EPA climate change policy. Do you bet on ethanol and biodiesel at this point?

Yes, you do, say USDA’s economists, who assembled a long term projection for corn and soybean oil use in biofuels. The projection was released recently at USDA’s Outlook Forum and estimated world and US energy prices, biofuels production, and the quantity of feed grains and oilseeds being processed for biofuels. Kansas State University ag economist Dan O’Brien analyzed the USDA projects in his report on the Outlook Forum in mid-February. While USDA economists assumed that policies in effect last fall would continue in place, they projected that demand for biofuels would continue and the value of agricultural commodities and cash receipts for farmers would continue to grow through 2019.

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