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If only a quarter of proposed new Midwest ethanol plants come on-line, up to half of corn in Midwest states currently sent for export could be diverted to domestic ethanol production, according to a new report by the Institute for Agriculture and Trade Policy (IATP).

“Staying Home: How Ethanol Will Change U.S. Corn Exports,” by IATP’s Mark Muller and Heather Schoonover, looks at the stunning growth planned for ethanol plants in the Midwest and their potential impact on corn exports. The paper includes data on how corn exports for individual Midwest states could be impacted by new ethanol plants, including, Iowa, Nebraska, Minnesota, Illinois, Indiana, Wisconsin, Missouri, North Dakota, and South Dakota.

The reports recommends that in the next Farm Bill “policymakers should focus on building and diversifying opportunities for renewable fuels and energies; promoting farm practices and cropping systems that build soil health and improve water quality; and ensuring that farmers and rural communities benefit from these new opportunities.”

Read press release summary or check out the IATP site for the full report and video interview.

A prolific fungus found in eastern Russia and termites from Costa Rica are just two of the avenues being explored to get ethanol on the cellulosic superhighway.

A Business Week online article reports on some of the bio-breakthroughs that are promising more efficient ways to make ethanol.

Scientists are scouring China for strains of tall grasses and tinkering with plants’ genes to make better energy crops. They are collecting termites in Costa Rica, hoping to harness the bugs’ ability to digest cellulose. Several groups have studied a fungus discovered during World War II that ate up the Army’s cotton tents. Richard Hamilton, CEO of Thousand Oaks (Calif.)-based Ceres Inc., compares the progress to TV makers’ struggle to perfect flat-panel displays. The first few factories “will be godawful expensive, but we’re early on the learning curve. We’ve only scratched the surface of what a lot of us think is possible,” he says.


Read the whole article.

Business Week reports that the ethanol industry appears poised for another big year in 2007, as companies scramble to take advantage of continuing government subsidies and a growing political desire to reduce the country’s dependence on foreign oil.

But Wall Street investors who went pedal-to-the-metal during ethanol’s midyear IPO frenzy seem to be easing off the accelerator upon warnings of volatile commodity prices and a potential oversupply down the road.

Read full Business Week article.

Before adjourning Saturday, Congress approved legislation extending the 54-cent-per-gallon tariff on imported ethanol as part of the Omnibus Tax bill.

The tariff was set to expire in October 2007 but will continue to be imposed until January 2009.

The American Coalition for Ethanol praised the action to support domestic ethanol production.

Brian Jennings, ACE Executive Vice President said, “We are extraordinarily grateful for the bipartisan leadership which accomplished the extension of the tariff offset to January 1, 2009. This important action helps pave the way for continued growth and investment in rural communities and clean burning, homegrown, renewable fuel.”

Read AP report.

The Iowa Corn Growers/Corn Promotion Board has released a document addressing concerns about whether they will be able to produce enough corn to meet demand for ethanol.

One of the issues they address is the price of corn, which this year is expected to average about $3 a bushel, the highest it has been since 1995.

The corn growers point out that during the last decade Iowa’s corn farmers have too often had to rely on federal farm programs to break even because corn prices failed to keep pace with either production costs or ordinary inflation (see graph).

Like other Americans, corn farmers should be able to compete in the marketplace, sell their crops for a profit, and earn a living for their families without being faulted for corn prices being “too high.”

Read the document pdf file.

Iowa corn growers say they can meet the demand for both food and fuel.

Grower leaders from the Iowa Corn Promotion Board and Iowa Corn Growers Association held a media teleconference Friday to answer concerns about corn prices and supplies and the increasing demand for corn to make ethanol.

Bob Bowman, ICGA president, who farms in DeWitt, said the current uproar over corn supplies is nothing new: “We’ve seen this debate before, as recently as 1995/96. I’m no economist, but I can tell you that when we see strong demand and good prices, corn farmers respond with higher production.”

Both men agreed that the current healthy demand for corn and strong corn prices are good news for Iowa’s growers and the local economies they support because they give farmers an opportunity to be profitable in the marketplace.

Read more from ICGA.

Read the Associated Press report.