USDA's predictions of corn use for ethanol and corn prices have
been met with some acceptance and plenty of criticism. The most
common criticism is that USDA's baseline projections are too
conservative, but some analysts think USDA's predictions are
well-informed. The current level of U.S. ethanol production
requires 2.15 billion bushels of corn annually, and the number
of ethanol biorefineries in the U.S. currently stand at 111,
plus 78 more under construction and seven undergoing expansion.
USDA has estimated that 3.7 billion bushels of corn will go into
ethanol production by 2008-09 and 4.0 billion bushels in 2010-1.
Analytical firm Credit Suisse says that USDA's estimation for
corn use predict about 9.3 billion gallons of ethanol production
by 2008-09, while the Renewable Fuels Association expects
ethanol production to expand to 11.4 billion gallons by
mid-2009. Credit Suisse also says in a research report issued
last week that USDA is being "overly conservative" with its
estimates on corn prices, which c