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Serving: IN

Ethanol Plant List Grows

How many get built will impact corn demand.

Participants at the 2007 Indiana Farm management Tour who visited the stop at Clunette Elevator in Clunette heard Chris Hurt talk quite a bit about the importance of ethanol to the corn market, both in the U.S., and particularly in Indiana. Hurt is a Purdue University ag economist who is following the ethanol situation closely.

There are nearly 40 plants on the list, with the state map dotted with potential plants, Hurt notes. However, he's already aware of some on his list that aren't likely to be built. But everywhere he goes, he hears of others rumored to be in some stage of formation.

Right now, there are 10 to 12 that are under construction or close to beginning construction. That could have a big impact on the Indiana corn market in '08, Hurt says. It will mean paying close attention to demand on the '08 crop as things shape up.

Weather from here on out will likely be the major factor in what happens to corn prices for the '07 crop, he notes. But the demand for ethanol as more plants open up will become more apparent in '08. New plants are also being built or planned in other Midwestern states, not just here in Indiana.

What Indiana has done is come from nearly nowhere, with one plant, New Energy at South Bend, to a leadership position in biofuels in three years, says Becky Skillman, Lt, Governor and Secretary of Agriculture, interviewed recently ion WIBC radio in Indianapolis. She notes that state government is trying to stay one step ahead, and is now shifting incentives for new plants to those that would utilize some form of cellulose to make ethanol. Cellulose products used as ingredients could include corn stalks, switchgrass, wood chips and a whole host of other possibilities.

There are actually a couple of plants near the end of Hurt's list that are noted as cellulose plants. Obviously, those are just under investigation. As far as the ag economist knows, there are still no cellulose plants under commercial operation making ethanol in the U.S., as of yet.

Corn isn't the only crop where biofuels could make an impact as early as next year, Hurt notes. The Louis Dreyfuss plant underway at Claypool, Ind., announced to be the biggest soy biodiesel-producing plant in the world when ground was broken, is expected to use a million bushels of soybeans a week, company spokespersons told Hurt.

"Yet they only plan to have two million bushels of storage on the property," he says. "So basically they will run with a 14-day supply. That means that they will be scheduling with someone to deliver product as they need it."

That one plant alone could use about 20% of all the soybeans that Indiana produces in the entire state annually, he notes. At least two other smaller soy biodiesel plants are already operating in Indiana.

Hurt's bottom line was clear- pay attention to what's happening with ethanol and biodiesel. Usage demand could start to show up as early as next year here in Indiana.

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