Think Tank Warns of Low Ethanol Demand Estimates

Economist Lester Brown of the Earth Policy Institute says the government has greatly underestimated how much corn the ethanol industry will demand.

The ethanol industry will demand much more corn than the government has estimated, according to Lester Brown, founder of the Earth Policy Institute, a Washington-based environmental think tank.

Brown says ethanol production will demand nearly twice from the 2008 harvest as much corn as current government estimations, possibly resulting in higher food prices due to shortages of livestock feed.

The Renewable Fuels Association is a source of figures on ethanol production and corn demand for many observers, and the Association's President, Bob Dineen, defends his group's lower estimates. Dineen says that some of the plants factored into the Earth Policy Institute data are still in the planning stages and may not be built.

The Earth Policy Institute data has ethanol distilleries demanding 5.5 billion bushels of corn from the 2008 harvest, based on 116 existing ethanol plants, 79 under construction and 11 undergoing expansion, and 200 more plants expected to be complete by September 2008.

A February government report estimated ethanol plants would demand 2.4 billion bushels of corn.

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