Center for Advanced BioEnergy Research, University of Illinois at Urbana-Champaign

Tuesday, November 30, 2010

Corn and Soybean Availability for Biofuels in 2010-11
Agricultural Marketing Resource Center, Iowa State University
November 2010

Dr. Robert Wisner
University Professor Emeritus
Iowa State University

Corn use for fuel ethanol production has become the second largest source of demand for the U.S. crop, with total corn use for this purpose expected to be only about 10% less than its use for livestock and poultry feeding in the year ahead. About 35% of the expected total demand for U.S. corn is projected to be accounted for by ethanol. Similarly, use of soybean oil for biodiesel has become a sizeable source of demand for oil produced from domestic soybean crushings. With these large new sources of demand for two of the nation’s major crops, it is important for other users of these commodities as well as the biofuels industry to have a good picture of the adequacy of supplies for the year ahead. The adequacy question is especially important this year with extreme adverse weather in several important foreign grain and oilseed producing countries, and with low beginning stocks of U.S. soybeans as well as a relatively small reserve supply of corn for the start of the new marketing year. It also is heightened by the fact that U.S. government mandates require annual increases in the minimum fuel blending volume for ethanol and biodiesel that do not reflect feedstock market conditions. Any adjustment in these mandates would be expected only under extreme conditions, and would occur not through market processes but through political and administrative decisions.

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