U.S.: Policy shift needed to break ethanol blend wall and boost corn prices, says NCGA

NCGA says with year-round, nationwide access to fuels with 15% ethanol blends, corn use in ethanol could increase by 50% at full implementation.

The National Corn Growers Association’s chief economist says policy change is needed to lift the ceiling on ethanol production and create additional demand for farmers.

Krista Swanson tells Brownfield corn used for ethanol has been mostly stagnant since 2010.

“We’re sort of at this, what we call the 10 percent blend wall, and without some regulatory changes to allow for higher blends, the industry is sort of just stuck where it’s at,” she shares.

Over the next decade, USDA forecasts corn use in ethanol to stay near the current 5.6-billion-bushel level and near the current share of total corn use.

Swanson says allowing E-15 usage year-round or higher blends could be one of the most immediate pathways to create additional demand for corn.

“Even with a one percent increase, we could be looking at 486 million additional bushels of corn use in ethanol,” she projects. “With today’s motor gasoline use, that’s 2.4 billion bushels at a full implementation.”

She points to the bipartisan, bicameral Nationwide Consumer and Fuel Retailer Choice Act as a way to quickly create more market-driven demand, but says hurdles remain in finding a legislative vehicle for it to be passed.

Tags: corn, Production, ethanol, demand, National Corn Growers Association