US Corn Reserves Expected To Fall To 15-Year Low On Rising Demand From Ethanal Producers

[Purveyor]

Rising demand for corn from ethanol producers is pushing U.S. reserves to the lowest point in 15 years, a trend that could lead to higher grain and food prices this year.

The Agriculture Department on Friday left its estimate for corn reserves unchanged from the previous month. The reserves are projected to fall to 675 million bushels in late August, when the harvest begins, or roughly 5 percent of all corn consumed in the United States. That would be the lowest surplus level since 1996.

The limited supply is chiefly because of increasing demand from ethanol makers, which rose 1 percent to 5 billion bushels. That's about 40 percent of the total crop.

But the increase didn't alter the agency's overall estimate, mostly because livestock producers are expected to scale back their corn purchases.

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http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/04/08/national/a060140D56.DTL

[KamaAina]

1. Please explain to me why we're using potential food for fuel

instead of other types of biomass? :shrug:

[FiveGoodMen]

2. Corn industry lobbying, I think

[louis-t]

3. Decrease corn syrup in foods 10%

Better for health, use less corn. The other idea involves not forcing popcorn on everyone. Selling 55 gallon drums of popcorn at the movies where half ends up on the floor is such a waste.

[golfguru]

4. What? You going against the powerful Ethanol lobby?

Ethanol...it is hydro carbon burning. Why is it better than gasoline for
atmosphere?

Ethanol...one of the reason food prices are going up is corn is a big part of animal
and chicken feed. Not to mention human consumption.

Ethanol...Is a loser from energy equation. The amount of energy you get from burning
Ethanol is not much more than what it takes to grow corn and process it into Ethanol.
Sugar cane is more efficient but we don't have the climate or soil Brazil has.

Ethanol...cars get less mileage per gallon than gasoline and it runs hotter which
shortens engine life.

[orangeapple]

5. RFS

"Under the "Renewable Fuel Standards" (RFS) provision of the Energy Independence and Security Act of 2007, Congress has mandated that petroleum refiners blend increasing amounts of corn ethanol into the nation's gasoline supply. In 2010, roughly 12 billion gallons of corn ethanol will be required to be blended in the U.S., displacing 6.5% of the gasoline supply while using about 30% of the corn crop. This number is mandated to increase to 15 billion gallons by 2015.

Corn ethanol is subsidized in the form of the $0.45/gal Volumetric Ethanol Excise Tax Credit (a.k.a. "blender's credit") that refiners receive for purchasing corn ethanol to meet their requirements under the RFS mandates. This credit ensures that a refiner will actually purchase the ethanol rather than pay a penalty of non-compliance."

It doesn't make sense economically, environmentally, or thermodynamically. Obviously a political solution.
Only Congress could figure out how to ruin your boat motor and make your taco more expensive in the same step. :)