The Government Accountability Office (GAO) forecasts a significant change in the U.S. corn market due to the burgeoning ethanol industry. By 2012, around 30% of the corn crop is slated for ethanol production, marking an increase from the current 27%. This surge in ethanol production, predicted to reach 11.2 billion gallons, is set to escalate corn prices, impacting the livestock feed market and, consequently, consumer meat prices.
To meet the growing demand for ethanol, additional corn cultivation will be necessary. This expansion could involve converting pastureland and idle areas into cornfields, shifting from other crops, and potentially limiting corn exports or its availability for livestock feed. The GAO warns of environmental risks if land reserved for conservation is used for corn cultivation.
Amidst these developments, the Bush administration and Congress are promoting a drastic increase in ethanol production. They are optimistic about future scientific breakthroughs enabling more cost-effective ethanol production from materials like corn stalks and wood chips, reducing the dependency on corn.
The report also sheds light on the limitations of E85 fuel. Despite ethanol burning more efficiently than gasoline, vehicles using E85 experience a significant reduction in fuel efficiency. Presently, E85 is mostly available in the Midwest, with around 1,100 stations offering it out of 180,000 nationwide.
This shift towards ethanol production presents a complex scenario for U.S. agriculture, balancing energy needs with agricultural resources and environmental considerations. Source : wisconsinagconnection