Annual Report of Highway Division Highway Research and Development in Iowa for the Fiscal Year ending June 30, 2005

The Highway Division of the Iowa Department of Transportation engages in research and development for two reasons: first, to find workable solutions to the many problems that require more than ordinary, routine investigation; second, to identify and implement improved engineering and management practices. This report, entitled Highway Division Highway Research and Development in Iowa, is submitted in compliance with Sections 310.36 and 312.3A, Code of Iowa, which direct the submission of a report of the Secondary Road Research Fund and the Street Research Fund respectively. It is a report of the status of research and development projects, which were in progress on June 30, 2005; it is also a report on projects completed during the fiscal year beginning July 1, 2004, and ending June 30, 2005. Detailed information on each of the research and development projects mentioned in this report is available in the Research and Technology Bureau in the Highway Division of the Iowa Department of Transportation.

The Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, November 2006

The ongoing growth of corn-based ethanol production raises some fundamental questions about what impact continued growth will have on U.S. and world agriculture. Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn-based ethanol production would reach 31.5 billion gallons per year, or about 20% of projected U.S. fuel consumption in 2015. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. Wheat markets would adjust to fulfill increased demand for feed wheat. Corn exports and production of pork and poultry would all be reduced in response to higher corn prices and increased utilization of corn by ethanol plants. These results should not be viewed as a prediction of what will eventually materialize. Rather, they indicate a logical end point to the current incentives to invest in corn-based ethanol plants.