In today’s monthly World Agricultural Supply and Demand Report (WASDE), corn use for ethanol production was projected 50 million bushels lower based on the new Grain Crushings and Co-Products Production report recently released by the National Agricultural Statistics Service (NASS), citing “a higher rate of conversion than previously assumed” as the reasoning for the adjustment.
“What is most remarkable about this supply and demand report is the light it sheds on a topic of great concern to U.S. corn farmers – recognition of the growing efficiencies in the ethanol industry,” said National Corn Growers Association (NCGA) President Chip Bowling, a Maryland corn farmer. “For many years, we have strongly asserted that the ethanol industry continues to improve and those productivity gains should be taken into consideration. With the simple justification offered for the analysis, USDA made a great step forward in showing its growing appreciation for the advances made in ethanol production and, thus, the ever-increasing benefit it offers Americans.”
While USDA estimates for corn use in ethanol production were lowered by 50 million bushels, the overall drop was partially offset by higher than expected production over the winter months. The demand decline was more than offset by projected increases in demand for corn from the export and feed and residuals markets of 50 million bushels each.
Projected ending stocks were lowered by 50 million bushels in light of the other adjustments. Average farm price estimates were raised by five cents at the midpoint to $3.50 to $3.90 per bushel.