USDA Chief Economist Office Examines Ethanol’s Complex Impact

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October 30, 2015

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by Susanne Retka Schill (Ethanol Producer Magazine) USDA’s Office of the Chief Economist just released a comprehensive report on ethanol. The 87-page report, “U.S. Ethanol: An Examination of Policy, Production, Use, Distribution, and Market Interactions,” examines the complex interaction of ethanol production with agricultural markets and government policies.

In the forward, USDA Chief Economist Robert Johansson, explains the report “intends to bring clarity to the complex interaction of ethanol production with agricultural markets and government policies. While there are many other ethanol studies available, this report is unique in that it centers on the pivotal role that ethanol plays in the crop and feed markets.”

Following a comprehensive overview of policy development and ethanol industry growth, the second chapter, the lengthiest of the report, covers the interaction between ethanol, crop and livestock markets. Those familiar with the USDA’s World Agriculture Supply and Demand Estimates reports will recognize the data sets pulled into this report. The 30-page section attempts to discuss every arena where the growth in ethanol had an impact, balanced with a discussion on the many other factors in play at the time. Multiple tables and graphs showing trends from 2000 to the present illustrate the many interacting elements of the ag sector: corn acres, yields, production and utilization in multiple sectors, along with exports and world production.

An examination of the changes in crops and forages discusses not only ethanol’s influence, but the influence from other factors and changes from the continued concentration in the livestock and poultry industries and other factors.

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Other chapters provide detailed analyses on ethanol production costs, profitability, processing technology and infrastructure. Also examined are the economics of blending ethanol into gasoline and federal and state policies related to ethanol. The chapters provide a historical review of the development of the ethanol and supporting industries, such as grain storage, and the evolution of distribution and transportation systems. READ MORE Download study

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