USDA ups forecasts for corn use in ethanol production

By Erin Voegele | November 05, 2018

On Nov. 2, the USDA released selected tables prepared for its upcoming USDA Agricultural Projections to 2028 report, which is scheduled for full release in February. One of the charts illustrates the USDA’s expectations for corn use in ethanol production.

The early release chart on U.S. feed grains shows the USDA has altered its long-term expectations for corn ethanol production over the past year.

The new chart shows 5.6 billion bushels of corn is expected to go to ethanol and byproducts production in 2017-’18, increasing to 5.65 billion bushels in 2018-’19, 5.7 billion bushels in 2019-’20 and 5.725 billion bushels in both 2020-’21 and 2021-’22. After that time, the USDA predicts a drop in the volume of corn going to ethanol production, with 5.7 billion bushels expected for 2022-’23. The reduction is expected to continue in 2023-’24 when 5.675 billion bushels of corn is expected to go to ethanol and byproducts production. The USDA predicts the fall will continue, with 5.625 billion bushels in 2024-’25, 5.6 billion bushels in 2025-26, 5.55 billion bushels n 2026-’27, 5.5 billion bushels in 2027-’28 and 5.45 billion bushels in 2028-’29.

In its most recent full agricultural projections report, which goes through 2027 and was released in February 2018, the USDA predicted 5.475 billion bushels of corn would go to ethanol and byproducts production in 2017-18. The newly released chart increases that forecast to 5.6 billion bushels.

When compared to the forecasts released in February, the USDA’s most recent forecasts also increase the amount of corn going to ethanol and byproducts for 2018-’19, 2019-’20, 2020-’21, 2021-’22, 2022-’23, 2023-’24. 2024-’25, 2025-’26, 2026-’27, and 2027-’28.

The newest forecast has increased corn use for ethanol and byproducts production by 125 million bushels for 2017-’18 and 2018-’19, 150 million bushels for 2019-’20, 200 million bushels for 2020-’21, 2021-’22, 2022-’23, and  2023-’24, 150 million bushels for 2024-’25, 2025-’26, 125 million bushels for 2026-’27, and 100 million bushels for 2027-’28.

The complete USDA Agricultural Projections to 2028 report is scheduled to be released in February. In addition to the tables released on Nov. 2, the full report will also include a discussion of commodity supply and use projections and projections for farm income and global commodity trade. The forecasts assume the Agricultural Act of 2014 will be extended and remain in effect through the projection period.

The early release charts can be downloaded from the USDA Office of the Chief Economist website.