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U.S. Ethanol Production to Decrease From Current Levels to 67% Through 2010 (4.13.2009)

U.S. Ethanol Production to Decrease From Current Levels to 67% Through 2010

Press Release -- TOPSFIELD, MA -- April 13, 2009 -- The newly released Soyatech Biofuels Monitor for the First Quarter 2009 projects that the United States ethanol fleet will run at 67% of forecast industry nameplate capacity through 2010, based on data from the USDA that the 2010 U.S. corn crop will be essentially flat at 12.15 billion bushels.
The March 31, 2009 USDA Planting Intentions report, which provides the earliest indication of likely corn acreage for the upcoming growing season, estimated 85.0 million acres will be planted in corn this spring. Given an average growing year with 10-year trend-line yields of 157.3 bushels per harvested acre, corn production will be approximately 12.15 bn bushels.  

“At that level, given current corn demand estimates for food, feed and exports, there would be only 3.4 billion bushels of corn available from the 2009 corn crop for the 2010 production of ethanol, or enough to produce approximately 9.6 billion gallons. This is against forecast industry nameplate capacity of 14.4 billion gallons by the beginning of 2010 and an RFS mandate of 12.0 billion gallons,” said Hunt Stookey, Managing Director of HighQuest Partners, co-author of the study.

Over the past two years, the market has demonstrated that, when there is insufficient corn to meet all demands, ethanol production absorbs the shortfall. After running above 100% of industry wide capacity through 2006 and into early 2007, the ethanol industry has cut back production levels since the third quarter of 2007 to balance demand with available supply. For the first quarter of 2009, Soyatech estimates industry-wide capacity utilization was just 78% of average nameplate capacity (operating and idled).

According to Stookey, “The ethanol industry is benefiting from the current economic crisis which has reduced demand for livestock, dairy and poultry, thereby reducing competing demands for corn. Our forecasts are based on current livestock and poultry data and USDA production forecasts for 2009, with a partial recovery in 2010.  However a faster (or slower) recovery will mean less (or more) corn for the ethanol industry,” he added.

With the consulting support of its parent company, HighQuest Partners, Soyatech publishes the Biofuels Monitor each quarter, with an overview of industry data and marketplace commentary. A synopsis is available for
free download here. Soyatech also offers subscriptions to its complete Biofuels Monitor, a robust package that includes searchable database of ethanol and biodiesel production facilities. For more information, please visit www.soyatech.com.

About Soyatech, LLC
Soyatech (
www.soyatech.com) is a global media, marketing, and event company that assists food, oilseed, agri-business, and agri-transportation sector firms to assess and develop market opportunities through its publications, conferences, webinars, and widely used internet platform. Founded in 1985, the company publishes the annual Soya & Oilseed Bluebook, the industry’s leading source of information on oilseed and agribusiness companies and products, an industry-focused email newsletter (in daily and weekly editions), and Soyatech.com, the award-winning business-to-business online resource for the industry. Soyatech’s information services are referred to by tens of thousands of the world’s leading commodity, food and biofuels companies in over 100 countries every week. Soyatech, LLC is a wholly owned subsidiary of HighQuest Partners.

About HighQuest Partners LLC
HighQuest Partners (www.highquestpartners.com) is a management consulting and strategic advisory firm that helps executive teams around the world to make better informed decisions about their strategies, investments/m&a, and governance. Since 1992, HighQuest and its subsidiary SJH & Company have completed over 500 strategic assignments for strategic players and financial investors & their portfolio companies in the global grain, oilseed, food, agribusiness, biofuels, industrial, & financial services sectors.

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