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24 Aug 2012 - Truth Is Stronger than Fiction... The Ethanol Story

The cut in corn production and the resulting higher price in this drought year of 2012 has put ethanol back into the spotlight. Unfortunately, it has brought back in-fighting inside the agricultural community with livestock and poultry producers calling on the EPA to reduce the RFS Mandate for ethanol so that corn prices will come down and, hopefully, reduce feed costs.

It has also given the outright, life-long critics of ethanol, who for whatever reason would like to do away with the bio-fuels industry, ammunition. Unfortunately, they don’t use truth or facts in the argument they use to put down ethanol. I have tried for years to tell my readers and listeners that when we take ethanol out of a bushel of corn, we get a lot more product from that same bushel; but the message doesn’t seem to get through, or maybe is deliberately ignored.

So this week, I am turning to David Kruse, who writes for the CommStock Report, for his analysis:

“One of the inaccurate statements is that 40% of corn production goes to ethanol so that ethanol uses more corn than is left for feed. The 40% statistic comes from how USDA reports corn usage on the balance sheet. USDA doesn’t differentiate between the co-products in the ethanol process relative to corn consumed.

The ethanol industry makes corn oil, distiller’s grain and ethanol from the 40% of the corn attributed to the industry. Corn oil can have several uses. Distiller’s grain is the second largest feed-stuff produced in the U.S. behind corn and ahead of soybean meal. Iowa Senator Charles Grassley did a good job explaining these facts when he said that when the other co-products are deducted from the corn used by the ethanol industry, only 20% of the corn supply is processed into the ethanol component.

Senator Grassley noted that with the distiller’s grain contribution to the feed supply, 43% of the corn crop goes to feed with only 20% to ethanol. That doesn’t sound the same as ‘40% of the corn crop goes to ethanol’ delivered in an alarmed TV voice.”

Thank you, David Kruse of the CommStock Report for making the point in an understandable way, and a note to ethanol opponents, let’s get the facts straight and then, let’s use those facts.

My thoughts on Samuelson Sez.