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Indiana officials: Ethanol, pork trades can co-exist
By NANCY VORIS
Indiana Correspondent

INDIANAPOLIS, Ind. — Indiana’s biofuels industry is, well, exploding. Since May of 2005, state officials report there are:

•Nine new ethanol plants and three biodiesel plants completed or in some phase of development
•500 new jobs in the making
•$13 million going into local farmers’ pockets
•$975 million going to capital investment

In January 2005, the state had no public E85 pumps, compared to 30 public pumps today and a commitment of 19 more to open across Indiana.

But the rapid growth of the ethanol industry has some economists worried that Indiana’s corn industry won’t hold up given the present demand for livestock feeds and the fact that state officials want to double pork production.

Lt. Gov. Becky Skillman and Indiana State Department of Agriculture Director Andy Miller released an economic study recently examining the compatibility of the state’s bioenergy and livestock strategies.

“The information in this report reinforces that we are on the right track in Indiana,” said Lt. Gov. Skillman, who also serves as the Secretary of Agriculture and Rural Development. “Using conservative estimates, Hoosier farmers will produce enough corn on average to meet our goal of producing 1 billion gallons of biofuels and doubling Indiana’s pork production.

“I am also pleased to see the report affirm that ethanol demand will be a major factor in the state’s economic future and a key driver of Indiana corn markets.”

The report is the result of ongoing research of ISDA’s bioenergy and pork strategies, as well as the department’s new livestock strategy. It analyzed corn supply under two yield-growth assumptions: a 25-year trend line and a 10-year trend line. Even with the aggressive growth of ethanol production, Indiana would continue to be “a net exporter of our grains,” Skillman said.

Miller said the livestock and biofuels industries are excited about ISDA’s strategies, but are understandably cautious about corn supplies as both segments are expanding. “This study clearly states what we have seen in our continuing analysis: There is enough corn in Indiana to support our goals,” he said.

The report also looked at the impact on livestock and grain producers.

“Livestock farmers could see variation in their feed prices depending on future corn acres and yields, the quality of by-products produced and their ability to include distillers’ grains efficiently in their rations,” Miller said. “But if future corn acres and yields increase, it could stabilize feed prices. Grain farmers will have more options to market their corn, and they will see significant changes in competition among markets.”

Finally, the report identified areas that could make Indiana’s ethanol industry more competitive with petroleum fuel:

•Maximizing the ethanol yield from each bushel of corn
•Increasing local demand for ethanol by-products, such as dry distillers’ grain solids
•Improving the quality and consistency of ethanol by-products to increase their value
•Reducing production costs by improving manufacturing processes

This farm news was published in the June 7, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

6/7/2006