Ethanol Industry Responds to Corn Harvest Report

The United States Department of Agriculture (USDA) released its final report on the total 2010 corn crop and supply and well as its updated estimates of corn use. The total 2010 corn production was 12.45 billion bushels, the third largest crop in U.S. history.

There were some unanticipated changes in the report as well. First, the corn yield was lower – 152.8 bushels per acre but overall, this is still the 4th highest. The reduction in yield was offset by the addition of 100,000 harvested acres. Second, the USDA increased its demand forecast to 4.9 billion bushels for the marketing year that runs from September 1, 2010 through August 31, 2011. This should equal ethanol production of nearly 13.5 billion gallons. When taking into account the contribution of distillers grains and other feed co-products of ethanol production, USDA lowered its livestock feed usage by 100 million bushels.

Ending stocks of corn were reported at 745 million bushels, down from last month’s report.

The Renewable Fuels Association (RFA) took time to analyze the report and determine how it may impact the ethanol industry. They stated, “While not as large as originally thought, the 2010 corn crop is quite robust considering the challenges much of the Corn Belt endured. With the 4th highest yields and 3rd largest crop on record, American farmers once again demonstrated their ability to produce a safe and abundant corn supply.”

RFA also noted that USDA kept their ethanol production estimates for the 2010/2011 marketing year in line with industry expectations. The organization also thinks it highly unlikely that the USDA will reverse their numbers in the future, especially in a higher direction due to the constraints of the E10 blend wall and the anticipated slow adoption of E15 ethanol blends.

Although domestic corn supplies are lower than the record supply achieved last year, global supplies of food grains like rice and wheat, grains most often used for human consumption, remain strong. RFA believes this report will “undoubtedly be like catnip for speculators that will predictably seek to drive commodity markets higher.” They based their theory on the fact that this very scene played out before in 2007/2008 when all commodities, led by oil, soared to unsustainable levels. RFA predicts “enthusiastic Malthusians and other doomsday prognosticators will use this report to blame biofuels for food insecurities that have existed for decades.”

RFA concluded, “The fact remains global supplies of grains remain sufficient to meet needs. Instead of casting blame, we should be investing in technologies that will help farmers in developing nations improve their productivity. We should also focus more intently on helping developing nations invest in renewable fuels and other technologies that mitigate climate change impacts and incentive more efficient and productive farming practices.”

CEO Tom Buis of Growth Energy added, “Today’s report, while smaller than expected, is still the third largest corn crop on record and proves once again the tremendous capability of American farmers to meet our growing demand for food, feed and renewable fuel – even during challenging growing conditions. There is plenty of potential to produce more, both here and worldwide. American farmers have shown time and time again their ability to meet the demands of the marketplace.”

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0 responses to “Ethanol Industry Responds to Corn Harvest Report”

  1. If every driver added one gallon of E85 to their tank every fill up we would use every drop of ethanol produced in this country and our dependence on foreign oil would further decline. I know people who add ethanol to their tank every time they fill up. Tests have shown that any vehicle can use more than 10% ethanol. They start by adding one gallon of E85 and then fill up the rest of the tank with regular E10. Just add the ethanol side of the equation. One gallon of E85 + thirteen gallons of E10 (85 + 130) = 215. Since you used a total of 14 gallons, divide 215 by 14 and you get 15.35 or 15.35% ethanol. Others add two gallons of E85 (2 x 85) + twelve gallons of E10 (170 + 120) = 290. 290 / 14 (total gallons of fuel) = 20% ethanol. Depending on what year vehicle you have, you may be able to use up to E50. You can add more each time until your check engine light comes on. When this happens you know you hit the limit for that car’s computer. Just add a gallon or so of E10 to bring the mix back to just below the level that set the engine light off. Most vehicles 2004 or newer will reset the engine light automatically. Others will have to have a code cleared and most auto parts stores are happy to do it for you and that light will not come back as long as you stay within your limits. Whether that be 2, 3, 4, 5, 6, 7, 8 or more gallons of ethanol each time you fill up. You will have to experiment with your vehicle. Remember if the check engine light comes on, there is nothing wrong with your vehicle. It just saw too much oxygen and it responded how it was suppose to. Just blend the ethanol mixture back down to what is acceptable for your vehicle and below that mark and don’t let the parts store talk you into buying a replacement part, because there is nothing wrong with the part you have. No need to buy an expensive flex fuel kit or bigger fuel injectors to run ethanol. Many people do the above without any modifications to their vehicles and their vehicles have over 150,000 miles and still run great.

  2. Due to ethanol’s high octane rating , it is not fair to compare E85 to E10 basic. It must be compared to E10 super premium fuel.
    E85 (105 octane) is around $2.30 a gallon.
    E10 (86 octane) is around $3.00 a gallon.
    E10 (91 octane) is around $3.30 a gallon.

    3 gallons of E85 (105 octane), plus 8 gallons of E10 (86 octane)
    (3 x 105) + (8 x 86) = 1003
    (315) + (688) = 1003
    1003 / 11 (total gallons of fuel) = 91.18 octane

    3 gallons of E85 plus 8 gallons of E10
    (3 x E85) + (8 x E10) = 335
    335 / 11 (total gallons of fuel) = E30.45

    (3 x $2.30) + (8 x $3.00)
    ($6.90) + ($24.00) = $30.90
    $30.90 / 11 (total gallons of fuel) = $2.81 a gallon for 91.18 octane, E30 fuel.
    That is almost 50 cents a gallon less than the pump price of 91 octane.

    E0 has around 115,000 BTUs with an 86 octane rating.
    E0 blended with 15% MTBE had around 111,300 BTUs with an 86 octane rating.
    E10 has around 111,100 BTUs with an 87 octane rating.
    E30 has 103,300 BTUs with an 93 octane rating.
    E50 has 95,500 BTUs with an 99.5 octane rating.
    E85 has 81,850 BTUs with an 105 octane rating.
    E100 has 76,000 BTUs with an 113 octane rating.

  3. I have filled my car 10 to 20 times with 5 gal of E85 and 6 to 7 gals of E10. My car (2001 Saturn L200 with a 2006 used/new to me engine) just loves it. I get 30 to 31 miles per gal. That is better than straight E10!

    I hope the Environmental Police Agency doesn’t come to arrest me.

    Drive safely.