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Last January, President Bush's State of the Union address noted that the United States is "addicted to oil." The comments were one of the biggest boosts to the domestic ethanol industry. Estimates put domestic production of ethanol at 5 billion gallons for calendar year. Despite near record crops, 2006 brought hefty prices to producers in large part because of the booming ethanol industry.
Past history held no comparison with last fall's rising corn prices despite stock levels. This bull market may bring $4 corn prices yet this year. However, analyst Logan Caldwell, Houston BioFuels Consultants, warns U.S. ethanol production capacity is forecasted to exceed U.S. ethanol demand sometime in the spring of 2007.
Several reports looked to pin down the profitable scenarios in ethanol. Some key ones include the following:
The Renewable Fuels Association reported that domestic October ethanol production tied the all-time high set in September 2006 by producing 333,000 barrels per day (b/d), according to data released by the Energy Information Administration. The U.S. ethanol industry was averaging 310,000 b/d of production through October, an annualized volume of 4.75 billion gallons. Industry estimates show ethanol production reaching 4.9 billion gallons for the year, an increase of more than 25% from 2005.
For the year, demand has averaged 339,000 b/d or more than 4.3 billion gallons. Total demand for 2006 will greatly exceed 5 billion gallons, more than one billion gallons over the requirement of the Renewable Fuels Standard.
Here's a look at some of the highlights for the year.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric.
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