Des Moines Register
10-26-06
Biofuels could change the appearance of corn
By ANNE FITZGERALD
REGISTER AGRIBUSINESS WRITER
Ames, Ia. - Corn raised by future Iowa farmers could look more like the corn
produced by their ancestors, with more substantial stalks, biofuels industry
experts said Wednesday.
As investment in biomass-based, or cellulosic, ethanol production grows, so will
demand for crop residue. At the same time, corn-based ethanol production will
continue to drive demand for grain. Look for university and private sector
researchers to develop corn hybrids that yield more of both, said speakers at a
symposium focused on the impact of biorenewable energy on the rural economy.
"There is a demand for corn like we've never seen before, and I think we will see
demand for cellulosic biomass like we've never seen before," said Robert
Brown, director of the Office of Biorenewables Programs at Iowa State
University and a speaker at the event.
Annual U.S. ethanol production has quadrupled since 2000 to 4.5 billion gallons,
and that number is expected to double by 2008, said John Miranowski, an ISU
professor of economics. By 2015, U.S. ethanol production will reach 15 billion
gallons while commercial production of biomass-based ethanol is expected to be
widespread, he said.
Iowa has emerged as the nation's leading producer of corn-based ethanol. Now,
business, university and government leaders are seeking ways to ensure the
state has a leading role in cellulosic ethanol production as well. They believe the
bioenergy business will be key to the state's future.
"I've never seen things change so fast in such a short period of time in the
Midwest, and especially in Iowa, in agriculture," said Miranowski, who also spoke
at the two-day event, which was co-sponsored by the Federal Reserve Bank of
Chicago, the Iowa Department of Economic Development and the Iowa Bankers
Association.
The economic impact of producing 1.6 billion gallons of ethanol in Iowa, as the
state is expected to do in 2006, looks like this: $4.6 billion in sales, $220 million
in personal income and 6,000 jobs.
"When we double that or triple that, we will have a sizable impact on the
economy, jobs-wise and sales-wise and income-wise," Miranowski said.
He predicted that some sectors could be hurt by the growing industry. Corn
production may take cropland from soybeans, for instance, making soy products
more costly. Higher corn prices, driven up by demand from ethanol plants, could
increase costs for many livestock feeders.
"The intersection of agriculture and energy is going to be a disruptive event," said
David Miller, director of research and commodity services for the Iowa Farm
Bureau Federation. That "can be good or bad, but it is going to be disruptive."
"The energy markets are magnitudes larger" than agricultural markets, he said.
"We're like the dog that chased the car. We caught it. We caught the car. Now,
what do we do?"
Others cautioned that there would be shake-ups as the biorenewables industry
grows, particularly if crude oil prices fall below $50 per barrel and remain there.
"Then we have some problems," Miranowski said.
But for now, the outlook is bullish for biorenewables, he said.
"It's hard to lose, even if (oil) prices change," Miranowski said, "because a lot of
(ethanol plants) are being paid off so quickly."
Reporter Anne Fitzgerald can be reached at afitzgerald@dmreg.com or (515)
284-8122