Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
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