Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
      
   
   
   
   

Agricultural News


Markets, Not Mandates, Shape Ethanol Production According to KC Fed

Thu, 06 Dec 2012 10:27:38 CST

Markets, Not Mandates, Shape Ethanol Production According to KC Fed
The 2012 drought has reignited the food versus fuel debate. In the latest issue of the Main Street Economist, Federal Reserve Bank of Kansas City economist Nathan Kauffman explores ethanol mandates and market-based demand for ethanol, concluding that markets, not mandates, will shape future ethanol production and its use of scarce corn.


After cutting U.S. corn production below recent years’ consumption, the drought sparked a U.S. grain shortage and sent global food prices soaring. As the grain shortage intensified, pressure to relieve the shortage by easing ethanol mandates mounted. Escalating ethanol mandates under the Renewable Fuel Standard (RFS), which fueled the expansion of the U.S. ethanol industry, will soon exceed the amount of ethanol than can be used in current U.S. gasoline blends.


Though some industry participants believe that a waiver of the mandate could reduce ethanol production and relieve high corn prices, a request the EPA recently denied for the 2013 mandate, Kauffman explains that ethanol production may not decline significantly from a temporary waiver. The RFS mandates stipulate ethanol blending for the next decade. A temporary waiver would not relieve the pressure on current production to build credits to satisfy future mandates.


In addition, the ethanol industry has become more market-based as production has exceeded the mandates in recent years. If energy prices rise faster than agricultural commodity prices, ethanol profits could expand and production could soar regardless of mandated levels. Finally, ethanol is the primary octane enhancer and fuel oxygenate, and there are few alternatives for U.S. oxygenate blends. High crude oil prices relative to corn prices and the use of ethanol as an octane enhancing fuel oxygenate should drive ethanol production going forward.


Read the complete article by clicking here.



   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Expansion Partners to Heal the Harvester  Tue, 26 Oct 2021 11:55:46 CDT
  • Hilliary Communications to Launch $45 Million in Fiber-Optic Infrastructure Expansion in Rural America  Tue, 26 Oct 2021 11:48:59 CDT
  • Ralph Lauren Corporate Foundation and Soil Health Institute Unveil New U.S. Regenerative Cotton Program  Tue, 26 Oct 2021 11:34:52 CDT
  • Fire Weather Watch in Effect in Oklahoma Panhandle Ahead of Developing Storms  Tue, 26 Oct 2021 10:34:06 CDT
  • CattleFax CEO Randy Blach Says Inflated Prices are Here to Stay  Tue, 26 Oct 2021 10:23:01 CDT
  • Fanning joins OKFB as Economic Development Coordinator  Tue, 26 Oct 2021 10:02:07 CDT
  • Food Safety: The Dirty Truth About Shopping Carts  Tue, 26 Oct 2021 08:42:32 CDT
  • Evaluating Money Saved When Purchasing Feed on Cost per Unit of Protein and Energy Basis  Tue, 26 Oct 2021 08:30:04 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Beef council Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Tulsa Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.

       
       

    Search OklahomaFarmReport.com

    © 2008-2021 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.