Friday, May 18, 2007

Ethanol Growth to be Strong in Coming Years

One USDA economist is predicting tremendous growth in ethanol over the next few years:

U.S. Department of Agriculture Chief Economist Keith Collins said he
expectsexpansion to continue to be "explosive," slowing only until the demand by
thegasoline industry for the oxygenate that ethanol provides has been fully
met. Collins, who spoke to Dow Jones Newswires in an interview Wednesday,
believesthe ceiling for ethanol production growth in the U.S. will be 13 billion
to 14billion gallons per year unless significant changes made in the level
ofethanol used in gasoline.

But the continuation of the fuel vs food debate continues:

But some food prices have already gone up because livestock producers
havebeen forced to pay more for corn-based feed as the ethanol industry buys
moreand more corn off the market. USDA's Collins said Wednesday that "the
poultry industry has been able topass on their higher feed costs in the form of
higher consumer prices. Retailprices of poultry have been going up ... pretty
strongly in the first part of2007 ... " National Chicken Council Chief
Economist Bill Roenigk said Thursday in aprepared statement: "The diversion of
corn into ethanol and away from animalfeed has already driven up the cost of
feeding chickens by 45% and has led toprice increases for wholesale customers
and for consumers."

No comments: