BioFuels Journal

Topsfield, MA—The newly released Soyatech Biofuels Monitor for the First Quarter 2009 projects that the United States ethanol fleet will run at 67% of forecast industry nameplate capacity through 2010, based on data from the USDA that the 2010 U.S. corn crop will be essentially flat at 12.15 billion bushels.

The March 31, 2009 USDA Planting Intentions report, which provides the earliest indication of likely corn acreage for the upcoming growing season, estimated 85.0 million acres will be planted in corn this spring.

Given an average growing year with 10-year trend-line yields of 157.3 bushels per harvested acre, corn production will be approximately 12.15 bn bushels.

"At that level, given current corn demand estimates for food, feed and exports, there would be only 3.4 billion bushels of corn available from the 2009 corn crop for the 2010 production of ethanol, or enough to produce approximately 9.6 billion gallons.

"This is against forecast industry nameplate capacity of 14.4 billion gallons by the beginning of 2010 and an RFS mandate of 12.0 billion gallons," said Hunt Stookey, Managing Director of HighQuest Partners, co-author of the study.

Over the past two years, the market has demonstrated that, when there is insufficient corn to meet all demands, ethanol production absorbs the shortfall.

After running above 100% of industry wide capacity through 2006 and into early 2007, the ethanol industry has cut back production levels since the third quarter of 2007 to balance demand with available supply.

For the first quarter of 2009, Soyatech estimates industry-wide capacity utilization was just 78% of average nameplate capacity (operating and idled).

According to Stookey, "The ethanol industry is benefiting from the current economic crisis which has reduced demand for livestock, dairy and poultry, thereby reducing competing demands for corn.

"Our forecasts are based on current livestock and poultry data and USDA production forecasts for 2009, with a partial recovery in 2010.

"However a faster (or slower) recovery will mean less (or more) corn for the ethanol industry," he added.

For more information, call 978-887-9959.

See Related Websites/Articles:

• Soyatech Biofuels Monitor
• Highquest Partners

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