Here's what the industry pressure group said, via the Des Moines Register:
...Corn use for ethanol will reach a record 4.95 billion bushels, up 50 million bushels from a previous estimate, the USDA said. Corn used for ethanol has climbed from 3.7 billion bushels two years ago to 4.95 billion bushels for this year’s crop.-from the article "Corn up 23 cents on tight stocks report"
Ethanol producers have been put on the defensive about their role in corn consumption and the report Wednesday and the market reaction is likely to revive the food versus fuel debate.
The Renewable Fuels Association put out a statement shortly after the USDA report was issued, saying “many will use strong ethanol demand as the rationale to drive the price of corn futures as high as the market will bear.
“In turn, this will likely cause ill-informed industries and talking heads to pronounce U.S. ethanol production as the root cause of food inflation the world over,” the RFA added....
And here's Agrimoney:
Ethanol producers may be making trouble for themselves
America's ethanol producers should enjoy the good times while they last.They are in clover at the moment, processing corn into record quantities of the stuff.And potentially at healthy margins too. Ethanol plants appear, cannily, to have bought their corn supplies in advance last year, before prices really took off, the US Department of Agriculture said on Wednesday, explaining the gap between growers' receipts from the grain and the "substantially higher" cash market bids.However, there are good reasons to think that times for the industry might be about to get tougher.Role reversalSome are financial. One reason America's corn ethanol producers are enjoying a boom is that, unusually, they are more competitive than Brazilian rivals which make the biofuel from sugar.If corn prices look steep, at their highest in more than two years, remember raw sugar is near a 30-year high.However, that dynamic, which has allowed America's corn ethanol producers to usurp Brazilian peers on export markets, may reverse.Indeed, futures markets indicate pricing power returning to sugar ethanol mills, which can buy their raw material for March next year 22% cheaper than they can get it for delivery next month.That's more than twice the discount that corn ethanol plants can count on, to judge by Chicago prices.Tax factorBut other hurdles will require more than canny hedging.The industry's favourable finances are supported by tax perks - a blender's tax credit, besides the market protection offered by levies slapped on ethanol imports.However, the clock is ticking for these benefits. They are due to run out at the end of this year, when reinstating them may not be so easy as it was last time they lapsed, in December.Even in the few weeks since, food prices have risen up the world agenda, questioning the morality of tying up so much productive farmland for an industrial purpose....MORE