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.

Estimates of Total Fuel Consumption in Transporting Grain from Iowa to Major Grain-Importing Countries by Alternative Modes and Routes, 1985

This study measured fuel consumption in transporting grain from Iowa origins to Japan and Amsterdam by alternative routes and modes of transport and applied these data to construct equations for fuel consumption from Iowa origins to alternative final destinations. Some of the results are as follows: (1) The metered tractor-trailer truck averaged 186.6 gross ton-miles per gallon and 90.5 net ton-miles per gallon when loaded 50% of total miles. (2) The 1983 fuel consumption of seven trucks taken from company records was 82.4 net ton-miles per gallon at 67.5% loaded miles and 68.6 net ton-miles per gallon at 50% loaded miles. (3) Unit grain trains from Iowa to West Coast ports averaged 437.0 net ton-miles per gallon whereas unit grain trains from Iowa to New Orleans averaged 640.1 net ton-miles per gallon--a 46% advantage for the New Orleans trips. (4) Average barge fuel consumption on the Mississippi River from Iowa to New Orleans export grain elevators was 544.5 net ton-miles per gallon, with a 35% backhaul rate. (5) Ocean vessel net ton-miles per gallon varies widely by size of ship and backhaul percentage. With no backhaul, the average net ton-miles per gallon were as follows: for 30,000 dwt ship, 574.8 net ton-miles per gallon; for 50,000 dwt ship, 701.9; for 70,000 dwt ship, 835.1; and for 100,000 dwt ship, 1,043.4. (6) The most fuel efficient route and modal combination to transport grain from Iowa to Japan depends on the size of ocean vessel, the percentage of backhaul, and the origin of the grain. Alternative routes and modal combinations in shipping grain to Japan are ranked in descending order of fuel efficiencies.