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Alternative 2010 Corn Production Scenarios and Policy Implications

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The quantity of U.S. corn used for domestic ethanol production has grown rapidly in recent years, driven by mandated production levels of renewable biofuels, tax credits for ethanol blenders, and a tariff on imported ethanol. The United States Department of Agriculture (USDA) estimates that corn use for ethanol production increased from 1.603 billion bushels during the 2005-06 marketing year to 3.677 billion bushels during the 2008-09 marketing year. Use during the 2009-10 marketing year that started on September 1, 2009 is projected at 4.3 billion bushels. After appropriately adjusting the amount of corn used for ethanol by the production and feeding of the co-product distillers grains, net use of corn for ethanol production has increased from about 1.07 billion bushels in the 2005-06 marketing year to a projected 2.88 billion bushels in the current marketing year. Ethanol use accounted for 9.5 percent of total use in 2005-06 and a projected 22 percent in 2009-10.

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