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Purdue economist: Ethanol facilities may wait for corn
By MICHELE F. MIHALJEVICH
Indiana Correspondent

AUBURN, Ind. — Construction of ethanol plants in Indiana may have to slow temporarily to allow corn production to catch up, a Purdue University agricultural economist said last week.

“We can’t continue to build plants like this in the short run,” said Chris Hurt. “We need to have a slowing down of the interest. Because states around us are also interested in ethanol, we can’t just go get corn out of Iowa anymore if we’re having a shortfall. That’s old agriculture.”

Hurt spoke February 28 at the 6th Annual Tri-State Conservation Tillage Expo in Auburn. About 320 farmers and others interested in agriculture attended.

The number of ethanol plants in Indiana either open, under construction, in the planning stages or possibly under consideration is about 24, Hurt said.

“This isn’t to say that all of these plants will get built,” he said. “But we now have a new use for our corn in Indiana.”

If all of these plants were built, they would use more corn than Indiana produced in 2006, he said.

“We’d leave no corn to feed the animals or for food,” he said. “And we know that’s not going to happen.”

“This is not meant to be discouraging. But the reality of the marketplace is we’re not able to expand corn production quickly enough to do this in the next couple of years.”

Some farmland could become available if the USDA changes the rules for land currently in conservation reserve programs, he said. Even with that, ethanol producers should strive for realistic but steady growth, he said.

“A 3 percent to 4 percent growth rate each year is reasonable,” Hurt said. “We’re going to have fuel and we’re going to have food. You have to find a balance between the two.

“You’re looking to have controlled and sustainable growth, versus going into a boom and bust cycle,” he said.

U.S. ethanol production is expected to be about 11 billion gallons by mid-2008, Hurt said. Last year, production was 5 billion gallons.

In order to meet the demands of production, research continues on alternative forms of ethanol, such as cellulosic ethanol, Hurt said. “I don’t see cellulosic ethanol being available before 2010. They’re (alternative forms of ethanol) just too expensive right now.”

3/8/2007