Bioenergy Group Blames Severe Drought, Not Ethanol, for Driving up Corn Prices

Severe drought conditions and a reduced harvest are likely to drive corn prices up in short order, not the fact that a portion of America’s corn crop is used for ethanol production.

Ethanol producers are also adjusting their output under these extreme weather conditions. According to the Commodity Research Bureau, U.S. ethanol production in the past three reporting weeks fell by a total of 6.8 percent to a nine-month low at the end of June.

“More of the Wisconsin corn crop is still used for animal feed and consumption than for ethanol production,” says Josh Morby, executive director of the Wisconsin Bio Industry Alliance. “And what many people fail to realize is that while a portion of the corn grown by American farmers is used for ethanol production, a co-product of that process is dry distillers grains (DDGs), which is also used as a nutrient-rich animal feed.”

According to the University of Minnesota, approximately 3.2 to 3.5 million metric tons of DDGs are produced in North America each year, which are in turn sold primarily to farmers as livestock feed.

One bushel of corn is equal to 56 pounds. When used for ethanol production, one bushel of corn produces 2.8 gallons of ethanol and 11 pounds of distillers grains, a feed not only used by American livestock farmers but that is also exported to farmers around the world.

“Ethanol production is not to blame for increased corn prices,” says Morby. “This is purely a weather-related situation, in which drier-than-normal and warmer-than-normal conditions have hit the Corn Belt and many Wisconsin farmers.”

The Wisconsin Bio Industry Alliance is a diverse group of businesses, environmental groups and statewide and local organizations that have come together to build both public and legislative awareness of the Bio Industry in Wisconsin.
 
For more information about the Alliance, or to find out how to join, please visit our website: http://www.wisconsinbioindustry.com.