The latest World Agriculture Supply and Demand Estimates report suggests that more corn may be used for ethanol than for animal feed, bringing forward concerns from groups like the National Chicken Council, who say that such numbers could set a worrying precedent.
The WASDE, from the U.S. Department of Agriculture, predict that 5 billion bushels of corn will be used for feed and related purposes in the 2010/2011 crop year, which runs through September, while 5.05 billion bushels will be used for ethanol and byproducts. The report marks the first time that ethanol usage will exceed feed usage, said Bill Roenigk, senior vice president and chief economist for the NCC. The disparity will grow in the 2011/2012 crop year, as 5.05 billion bushels are used for feed and 5.15 billion bushels go into the ethanol category, according to the USDA.
"Raising poultry and livestock as food for people is taking second place to putting ethanol derived from corn into America's gasoline tanks," said Roenigk. "The USDA's overall estimates of corn production are thought by many analysts to be somewhat optimistic. They expect that less corn overall will be produced. If that is correct, than even less corn will be available for poultry and livestock feed because the ethanol sector will always get enough to fulfill the mandate. Ethanol producers will always be able to outbid livestock and poultry producers because the fuel industry is required by law to buy ethanol."
WASDE accounts for the fact that the ethanol industry throws off a certain amount of byproducts, such as dried distillers' grain with solubles, which can be used as a feed supplement for livestock and poultry. However, it lacks the nutritional and energy values of corn. "Producers would rather have corn, but since sufficient quantities are not available at reasonable prices, they will use some DDGS to try to stay in business," said Roenigk.
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