Higher corn yields to boost ethanol

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The United States is headed for a corn output boom over the years ahead that will increase supplies available for ethanol production, the head of an industry chamber said this week.

The robust growth of the ethanol sector in recent years has altered the structure of the U.S. corn market and ethanol producers now consume about 40 percent of the crop, sparking criticism that food supplies are at risk.

National Corn Growers Association Chief Executive Rick Tolman said corn use in ethanol will eventually rise from current 5.0 billion bushel although "there will be a plateau for a time."

"We've had reduced (corn) production in the last two years, but as we are able to increase production and work on new technology, I think it will continue to grow," he told reporters in Buenos Aires during a tour of Southern Cone farm areas.

"It will follow technology. As we produce more corn per acre, we'll have a certain amount of that go toward fuel production," said Tolman, head of the Missouri-based chamber.

He expects U.S. corn yields to climb to an average 300 bushels per acre by 2030, almost double current yields. "That's going to allow us significantly more opportunity to grow," Tolman said.

Thomas Dorr, head of the U.S. Grains Council, said the ethanol boom is not cutting into the amount of corn available for food.

"The corn being used for ethanol in the United States is corn that was never going to have been produced," said Dorr, who also spoke to reporters in Buenos Aires.

"When the global economy began its stunning growth in the 1990s as a result of the fall of the Iron Curtain, there was an increase in the demand for energy. That fostered the corn industry's interest in producing for that market," Dorr said.

"Had that growth in demand not occurred, we would probably not have the production capacity that we have today," he added. "We would not have capitalized that technology and corn prices would probably be substantially higher."

(Editing by David Gregorio)



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