This is an excerpt from EERE Network News, a weekly electronic newsletter.

March 07, 2007

Corn Ethanol Production Increased 25 Percent in 2006

Photo of an industrial site featuring several distillation columns.

The ethanol fuel industry experienced rapid growth in 2006.
Credit: Chris Standlee

The U.S. ethanol fuel industry produced 4.86 billion gallons of ethanol in 2006, a 24.3 percent increase over the previous year, according to data released on March 5th by the Renewable Fuels Association (RFA). The figure is a slight downward adjustment from RFA's initial estimates of 5 billion gallons of ethanol production in 2006. According to RFA, demand for ethanol reached 5.4 billion gallons in 2006, exceeding the supply by 11 percent. To meet that demand, some 653 million gallons of ethanol were imported, two-thirds of which were shipped directly from Brazil. Currently, 114 ethanol plants located throughout the United States have the capacity to produce more than 5.6 billion gallons of ethanol fuel per year. Another 78 facilities under construction and seven expansions underway will boost the industry's capacity to more than 6 billion gallons of ethanol fuel per year. See the RFA press release.

While the increased ethanol production is pushing up corn prices and making it more profitable for farmers to grow corn, it also worries ranchers, chicken farmers, and others that depend on corn feed to raise animals. According to the National Chicken Council, the demand for ethanol had already raised the wholesale price of chicken by six cents per pound back in January. Meanwhile, the cattle industry is expected to be less profitable in 2007. At a trade show in early February, analysts warned that any impact on the 2007 corn crop "could have particularly drastic consequences, because even a strong corn crop will be hard-pressed to meet current demand." These concerns emphasize the need for the ethanol industry to expand to cellulosic biomass feedstocks. See the press releases from the National Chicken Council and the National Cattlemen's Beef Association.