USDA: Biofuel use in U.S. will see spike in next few years, then drop

The USDA has released its estimate on how biofuels fit into the U.S. long-term energy and crop sectors. Cattle Network has lifted the biofuel-specific parts of the report (or you can download the PDF here).
The upshot of the USDA's overview is that biofuel use in America will continue to grow, especially over the next two-three years. After 2010, ethanol growth will be "more moderate," and will make up eight percent of the annual gasoline use in the U.S. by 2012. Yes, this ethanol is expected to be mostly corn-based, which will drive up corn prices and increase corn acreage. Because ethanol demand is inelastic (unresponsive to price changes), the USDA says that, "increased price variability and market volatility are likely."

Biodiesel, on the other hand, will peak even earlier: this year or next. In 2009-2010, slower growth is projected, and things level off after 2010. The USDA projects a high of 700 million gallons of biodiesel a year, less than two percent of total highway diesel fuel.

Details more germane to cattle farming (e.g., corn for feed) are available at the Read link.

[Source: USDA, Cattle Network]

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