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News and analysis on the global poultry
and animal feed industries.
on March 19, 2012

Animal feed to overtake fuel as biggest use for corn

Ethanol stockpiles up, federal requirements set to peak in 2015

Animal feed is projected to overtake fuel as the biggest use for corn because ethanol demand is slowing as farmers produce a record crop, according to reports.

The BGOV Barometer, which shows the proportion of the corn harvest going into ethanol in the year ending Aug. 31, 2013, is forecast to fall to 35 percent of the crop from 40 percent, according to the U.S. Department of Agriculture. Animal feed was overtaken by ethanol in 2011 and 2012. “Ethanol growth should slow down, so if we get increased production, then this will lower the food-versus-fuel debate for awhile,” said Bruce Babcock, an energy economist at Iowa State University in Ames, Iowa.

A 45-cent-per-gallon tax credit given to ethanol blenders and a 54-cent-per-gallon tariff on ethanol imports expired at the end of 2011, while ethanol stockpiles are at record levels. Federal requirements for ethanol use are increasing at a slower pace and are set to peak at 15 billion gallons in 2015, according to the Renewable Fuels Association in Washington. Production in 2011 was 13.9 billion gallons.

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