Agricultural biofuels : current issues

A new study of agricultural biofuels shows that global yields of crop-based feedstock production are overestimated by 100% for many crops, and up to 150% for some, bringing some sobering news to the booming industry of ethanol and biodiesel producers.

Seeing this remarkable performance of the US biofuel industry, a Senior Research Analyst at RNCOS commented that it will not be wrong to say that the global ethanol industry is centered around the US. Moreover, the US is expected to lead the global ethanol production in future. The main reasons behind this projection, says the analyst, are the long-term government intervention (Renewable Fuels Standard policy) and setting up of more ethanol plants. Besides, continuous rise in domestic ethanol demand will encourage domestic producers to keep adding to the production volume in coming years.

The role of biofuel policies in the food-price hikes has become particularly controversial. The rapid increase in demand for and production of biofuels, particularly bioethanol from maize and sugarcane, has had a number of effects on grain supply-and-demand systems. Expanded production of ethanol from maize, in particular, has increased total demand for maize and shifted land area away from production of maize for food and feed, stimulating increased prices for maize. Rising maize prices, in turn, have affected other grains. On the demand side, higher prices for maize have caused food consumers to shift from maize (which is still a significant staple food crop in much of the developing world) to rice and wheat. On the supply side, higher maize prices made maize more profitable to grow, causing some farmers to shift from rice and wheat (and other crop) cultivation to maize cultivation. These demand- and supply-side effects have tended to increase the price of rice and wheat and other crops.

Apart from ethanol, the research report "US Biofuel Market Analysis" provides comprehensive information on market trends prevailing in the US biodiesel sector also. It exhaustively evaluates the biofuel industry, with segment-wise discussion on ethanol and biodiesel and identifies the major success areas. The study also highlights the main driving forces in the US biofuel market to help clients understand the leading-edge opportunities present in the industry.