According to an article in Agrimoney, growth in U.S. corn ethanol production is expected to stall due to reduced predictions on this year’s corn harvest along with the fact the industry has basically reached the blend wall. Also a factor has been record high corn prices which have already caused a few plants to stop production.
Goldman Sachs has estimated that corn use by the ethanol industry will increase 50m-100m bushels in 2011-2012 while Rabobank believes the number could be up to 130 million bushels. On the flip side, the International Grains Council (ICG) predicts corn usage by the industry will stay steady with demand from foreign biofuels producers also slowing.
“After rising sharply in recent years, corn used for the manufacture of fuel ethanol is forecast to show very little growth [worldwide],” the said IGC.
Today, the ethanol industry has surprised the livestock industry as the largest consumer of corn.
Despite lower corn harvest forecasts for this year, what is predicted will still be one of the highest harvests on record. However, the IGC still anticipates weakening production prospects for corn and cut its world corn output forecast by 10m tonnes to 849m tonnes. The corn crop is expected to reach around 12.9 billion bushels.