WASHINGTON, Feb. 17, 2016 - Corn production has become much more energy-efficient since the early 1990s, according to a new report from USDA’s Economic Research Service.

“Ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s, to a substantial net energy gain in the present. And there are still prospects for improvement,” said the report, “2015 Energy Balance for the Corn-Ethanol Industry.”

Agriculture Secretary Tom Vilsack touted the results. “U.S. farmers continue to improve their efficiency in the production of corn for ethanol while the impact of ethanol production on corn production has become marginal,” he said. “Between 1991 and 2010, direct energy use in corn production has dropped by 46 percent per bushel of corn produced and total energy use per bushel of corn by 35 percent. Moreover, between 2005 and 2010, direct energy use fell by 25 percent and the total energy use by 8.2 percent per bushel.”

Vilsack said that “more energy is being produced from ethanol than is used to produce it, by factors of 2-to-1 nationally and by factors of 4-to-1 in the Midwest.”

The report also said there is “significant potential for a 30-fold improvement in energy balance by using biomass (stover)-powered refineries.”

Another study, released by the University of Missouri’s Food and Agricultural Policy Research Institute, found that a billion gallons of additional corn starch ethanol would increase the median U.S. corn price by 15 cents per bushel, excluding shortrun price impacts.

The review of 170 studies released since 2010 also found – based on limited data – that the additional corn starch ethanol would result in fewer livestock and higher livestock prices, and reductions in gasoline use in the United States “due to competition with ethanol and higher fuel costs, plus a partly offsetting rise in rest of world gasoline use.”

The studies that FAPRI looked at also suggest that “well under half of the increase in corn demand to make the additional ethanol is met with greater production, even giving time for supply to respond. Some studies estimate that the production increase offsets the increase in demand, but most do not.”

Study results were mixed on the effects on land use, some implying that a $1 per bushel higher corn price “can lead to millions of more acres allocated to corn or other crops in the U.S. and elsewhere in the world, some drawn from forest areas. Some studies focus on shortrun response with limited or no land use change. There are few observations and the range of estimates is sometimes quite wide.”

The report, “Literature Review of Estimated Market Effects of U.S. Corn Starch Ethanol,” was prepared by Wyatt Thompson, Jarrett Whistance and Hoa T.K. Hoang.


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