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Corn ethanolThe availability of ethanol and biodiesel at the fuel pump is becoming more prevalent. Rising fuel prices, environmental concerns, pressures for oil independence, and Federal energy policy are creating a strong market for renewable energy.

Bioenergy is renewable energy derived from biological sources, to be used for heat, electricity, or vehicle fuel. Biofuel derived from plant materials is among the most rapidly growing renewable energy technologies. In the United States, corn-based ethanol is currently the largest source of biofuel as a gasoline substitute or additive, and recent energy legislation mandates further growth of both corn-based and advanced biofuels from other sources. Growing biofuel demand has implications for U.S. and world agriculture.

ERS is approaching bioenergy issues in several ways:

  • Providing market analyses;
  • Monitoring the state of the agricultural system and rural communities;
  • Developing projections of commodity supply, demand, and retail food prices; and
  • Conducting in-depth research on policy-relevant topics.
Market Analysis

Next-Generation Biofuels: Near-Term Challenges and Implications for Agriculture (May 2010)

This report assesses the short-term outlook for production of next-generation biofuels and the near-term challenges facing the sector. Near-term sector challenges include reducing high capital and production costs, acquiring financial resources for precommercial development, developing new biomass supply arrangements, many of which will be with U.S. farmers, and overcoming the constraints of ethanolís current 10-percent blending limit with gasoline.

Also featured in the June 2010 issue of Amber Waves.

Colombia: A New Ethanol Producer on the Rise? (January 2009)

This report discusses Colombiaís sugarcane-based ethanol industry. While ethanol production has the potential to expand to more than 1 million gallons by in 2010, it is unlikely that Colombia could export ethanol because domestic production is insufficient to meet nationwide requirements that gasoline contain a 10-percent ethanol blend.

Ethanol Co-Product Use in U.S. Cattle Feeding: Lessons Learned and Considerations (April 2009)

Increased livestock-feed market for ethanol byproducts has switched the perception that these byproducts have little value to one of the ethanol industry making grain-based “co-products” that have market value separate from the primary products.


Impacts of Ethanol Expansion in the United States


Cover of ERS report ERR-86, titled Ethanol and a Changing Agricultural LandscapeEthanol and a Changing Agricultural Landscape (November 2009)

The Energy Independence and Security Act (EISA) of 2007 established specific targets for the production of biofuel in the United States. Until advanced technologies become commercially viable, meeting these targets will increase demand for traditional agricultural commodities used to produce ethanol, resulting in land-use, production, and price changes throughout the farm sector. This report summarizes the estimated effects of meeting the EISA targets for 2015 on regional agricultural production and the environment. The economic and environmental implications of displacing a portion of corn ethanol production with ethanol produced from crop residues are also estimated.

Corn fieldFull Throttle U.S. Ethanol Expansion Faces Challenges Down the Road (Amber Waves, September 2009)

The Energy Independence and Security Act of 2007 specified an ambitious agenda to significantly expand biofuel use in the United States, with an increased emphasis on “second generation” cellulosic biofuel. However, challenges in both supply and demand may limit future growth in the industry, ranging from the development of new cellulosic biofuel production technologies to the development of supporting infrastructures at every step along the way from the field to the pump.

Farmer shoveling corn kernelsIncreasing Feedstock Production for Biofuels: Economic Drivers, Environmental Implications, and the Role of ResearchPDF file, 2.31MB (December 2008)

The implications of increased demand for feedstocks to meet the Nation's biofuels goals are uncertain. Questions include what types of feedstocks will be used, at what prices, grown where, and with what implications for greenhouse gases and sustainability? A report released by the interagency Biomass Research and Development Board addresses these issues, including analysis of scenarios for specific biofuel targets with alternative assumptions about key variables like crop productivity and input prices.

See the related Amber Waves article, Growing Crops for Biofuels Has Spillover Effects (February 2009).

An ethanol plantThe Economics of Biomass Feedstocks in the United States: A Review of the LiteraturePDF file (October 2008)

A review by the Biomass Research and Development Board of economic studies available through the end of 2007, which is intended to support further economic research on expanding the production of renewable fuels.

full grocery cartCorn Prices Near Record High, But What About Food Costs? (February 2008)

The effect of higher corn prices on U.S. retail food prices are examined by analyzing price trend data from 1987-2007 and the price responsiveness of corn-dependent food to cost changes. The results show ethanol's impact on retail food prices depends on how long the greater demand for corn raises farm corn prices and the extent to which higher corn prices are passed through to retail.

Global Impacts of Biofuels


Produce at a marketRising Food Prices Intensify Food Insecurity in Developing Countries (February 2008)

The use of food crops for biofuels, coupled with greater food demand, has reversed the path of declining price trends for several commodities. For highly import-dependent or highly food-insecure countries, any decline in import capacity stemming from rising food prices can have challenging food security implications. Food aid, a key safety net source, has stagnated during the last two decades, and its share has declined relative to total food imports of low-income countries.


Additional ERS Research


Bioenergy Briefing Room

With interest in renewable energy sources intensifying, the ERS online briefing room provides links and information on commodity supply and demand, retail food prices, and impacts of bioenergy development on the food/farm sector.

One section of the briefing room, Market Analysis, contains links to data sources (primarily for the United States) from USDA.  Links to data from other government sources, such as U.S. Department of Energy and U.S. Department of Commerce, universities, and international organizations that publish data and information  on production, use, prices, and trade of biofuels, their feedstocks, and coproducts are in the Related Links section. The sources focus on grain-derived ethanol (because cellulosic ethanol is not yet widely manufactured or commercially available in the United States) and biodiesel derived from oils, fats, and greases.

Agricultural Baseline Projections Briefing Room

An online presentation of USDA's February 2010 longrun (10-year) projections for the agricultural sector for 2010-19. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

  • See U.S. Biofuels in the Summary of Projections chapter for USDA's long-term projections for U.S. ethanol.
  • See the box on Demand for Biofuel Feedstocks in the Agricultural Trade chapter for information on international developments on biofuels.
  • The Renewable Energy Systems and Energy Efficiency Improvements Program, also known as Section 9006, was created as part of the Energy Title in the 2002 Farm Bill. It provides grants and loan guarantees to farmers, ranchers and rural small businesses.

Bioenergy Information From USDA


USDA Foreign Agricultural Service, Office of Global Analysis, Trade and Biofuels Analysis Division provides global biofuels data and analysis, articles and presentations.

USDA Renewable Energy—News and information about USDA's renewable energy activities.

USDA Office of Energy Policy and New Uses—USDA office responsible for developing and coordinating Departmental energy policy, programs, and strategies.

National Institute for Food and Agriculture, Small Business Innovation Research: Biofuels and Biobased Products. This grant programís objective is to promote the use of biofuels and non-food biobased products by developing new or improved technologies that will lead to increased production of industrial products from agricultural materials.


Sign up for e-mail notices of bioenergy-related research and analysis from ERS


For more information, contact: Janet Perry and Margriet Caswell

Web administration: webadmin@ers.usda.gov

Updated date: June 17, 2010