WEST LAFAYETTE, Ind., Dec. 11 (UPI) -- Corn used for ethanol production could exceed the U.S. Department of Agriculture estimate this year due to low prices, a University of Purdue economist said.
The department has set a target of 4.9 billion bushels of corn for ethanol production.
The 2013 corn crop, however, has produced near-record yields, which will push prices lower, the university said in a news release.
In November, for the first time, the U.S. Environmental Protection Agency proposed a reduction in ethanol use, cutting the amount needed for gasoline and diesel fuels from 18.15 billion gallons to 15.21 billion.
Ethanol made from corn, the EPA reduction suggested, would be cut from 14.4 billion gallons to about 13 billion.
Three months into the market year, however, "there is growing evidence that corn usage for ethanol can reach, and even exceed, 4.9 billion bushels," Purdue Extension agricultural economist Chris Hurt said.
"We have to remember that RFS [renewable fuel standard] volumes are a minimum and production of renewable fuels can always be higher," Hurt said.
Hurt forecast gasoline consumption to be nearly 133 billion gallons in 2013 and slightly less in 2014.
"This means ethanol consumption will need to be about 13.2 to 13.3 billion gallons -- a number that is above the EPA proposal and would require almost 4.9 billion bushels of corn," he said.
Reducing ethanol standards was considered bad news for farmers and environmental groups that see ethanol use as one way to slow global warming.
Low prices could also spur exports, Hurt said.
"While it is still too early to make accurate predictions of trade volumes, net exports in the range of 400 million to 550 million gallons of ethanol might be likely," Hurt predicted.
"If so, that could add 150 million to 200 million additional bushels of corn use for ethanol," he said.
"These two markets would mean that corn usage could reach 4.95 to 5 billion bushels of corn usage from the 2013 crop -- higher than USDA's current estimate."