E15 approval could lower corn exports

Stock and Land
BY JACQUI FATKA
21 Aug, 2010 04:00 AM

IN THE past year in the US, the Environmental Protection Agency has been evaluating a waiver request to increase ethanol levels blended into the gasoline supply to 15 per cent (E15).

For the ethanol industry, E15 is the only way to remain competitive as production capacity nears maximum use levels. However, there is growing concern from the livestock and food industries about the effect on prices if too much corn is used for ethanol.

As the ethanol industry has expanded over the past five years, many predicted that corn exports would suffer.

In a full analysis of supply and demand outlooks under higher ethanol blends, Dan O'Brien, extension grain economist at Kansas State University, plugged in the US Department of Agriculture's 10-year baseline outlook for yields, acres and usage and found that if corn is allocated away from traditional uses and more toward ethanol use, the export market will drop.

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