Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets, 2007

Projections of U.S. ethanol production and its impacts on planted acreage, crop prices, livestock production and prices, trade, and retail food costs are presented under the assumption that current tax credits and trade policies are maintained. The projections were made using a multi-product, multi-country deterministic partial equilibrium model. The impacts of higher oil prices, a drought combined with an ethanol mandate, and removal of land from the Conservation Reserve Program (CRP) relative to baseline projections are also presented. The results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices will increase enough to cover the feed cost increases. Retail meat, egg, and dairy prices will also increase. If oil prices are permanently $10-per-barrel higher than assumed in the baseline projections, U.S. ethanol will expand significantly. The magnitude of the expansion will depend on the future makeup of the U.S. automobile fleet. If sufficient demand for E-85 from flex-fuel vehicles is available, corn-based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices. The direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1% over baseline levels. Results of a model of a 1988-type drought combined with a large mandate for continued ethanol production show sharply higher crop prices, a drop in livestock production, and higher food prices. Corn exports would drop significantly, and feed costs would rise. Wheat feed use would rise sharply. Taking additional land out of the CRP would lower crop prices in the short run. But because long-run corn prices are determined by ethanol prices and not by corn acreage, the long-run impacts on commodity prices and food prices of a smaller CRP are modest. Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of cornbased ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.

2009 Iowa’s Rail System Background Prepared by the Office of Systems Planning December 2010

Iowa’s Rail Environment Iowa’s rail transportation system provides both freight and passenger service. Rail serves a variety of trips, including those within Iowa and those to other states as well as to foreign markets. While rail competes with other modes, it also cooperates with those modes to provide intermodal services to Iowans. In 2009 Iowa’s rail transportation system could be described as follows: Freight Iowa’s 130,000-mile freight transportation system includes an extensive railroad network, a well-developed highway system, two bordering navigable waterways, and a pipeline network as well as air cargo facilities. While rail accounts for only 3 percent of the freight network, it carries 43 percent of Iowa’s freight tonnage. A great variety of commodities ranging from fresh fish to textiles to optical products are moved by rail. However, most of the Iowa rail shipments consist of bulk commodities, including grain, grain products, coal, ethanol, and fertilizers. The railroad network performs an important role in moving bulk commodities produced and consumed in the state to local processors, livestock feeders, river terminals and ports for foreign export. The railroad’s ability to haul large volumes, long distances at low costs will continue to be a major factor in moving freight and improving the economy of Iowa. Key 2008 Facts • 3,945 miles of track • 18 railroads • 49.5 million tons shipped • 39.7 million tons received • 2 Amtrak routes • 6 Amtrak stations • 66,286 rail passenger rides Key Rail Trends • slightly fewer miles being operated; • railroads serving Iowa has remained the same; • more rail freight traffic; • more tons hauled per car; • higher average rail rates per ton-mile since 2002; • more car and tons hauled per locomotive; and • more ton miles per gallon of fuel consumed. Iowa’s rail system and service has been evolving over time relative to its size, financial conditions, and competition from other modes.