U.S. Agriculture Dept. Predicts Slowdown in Corn Use for Ethanol
WASHINGTON, D.C. --- For the second consecutive month, the U.S. Agriculture Department is scaling down its estimate of how much of this year's corn harvest will be used to produce ethanol fuel.
Last Friday, the department trimmed its estimate by 100 million bushels, the Des Moines Register reported. The adjustment reflects falling ethanol prices. In fact, a small plant in North Dakota has announced plans to temporarily close.
At the end of 2006, the price of ethanol was $2.50 a gallon. The price is now at about $1.50, according to the Dallas Morning News.
The USDA now estimates that U.S. farmers will harvest 13.3 billion bushels of corn this year. Of that, 3.2 billion bushels is expected to be used to produce ethanol.
Some analysts are now pushing for Congress to pare down corn subsidies and offer greater support to projects that produce ethanol from such alternative sources as switchgrass.