Drought Consequences to Biofuels Unknown Right Now

Audio provided as a service to farm broadcasters by the Agricultural Marketing Resource Center.

Audio with Dr. Robert Wisner, Iowa State University Extension Ag Economist.

Suggested Lead: Earlier this month - USDA dropped its corn production forecast by 20-bushels per acre. Weekly crop condition reports continue showing the corn crop condition has deteriorated more and more during this drought - which Iowa State University Extension Ag Economist Dr. Robert Wisner says is as extensive as the drought in the 1930’s…tape

Cut #1        :37            O.C…”year ahead.”

And Wisner says for ethanol that means reduced processing margins, increased prices and some cut back on corn processed for ethanol. Everything seen with the corn crop right now - Wisner says the drought won’t be a positive influence on the general profitability of the biofuels industry. He says there are two key variables that will influence the industry’s bottom line…tape

Cut #2        :29            O.C…”octane enhancement.”

The other factor - according to Wisner - is the excess RINs - Renewable Identification Numbers - that accompany each gallon of ethanol produced…tape

Cut #3        :18            O.C…”of ethanol.”

Wisner says it’s a wait and see situation to see how it all unfolds and its impact on ethanol prices and processors. Monthly ethanol and biodiesel profitability charts are available in the Renewable Energy Newsletter of the Agricultural Marketing Resource Center at Iowa State University at www.agmrc.org.