World Grain - April 2013 - 68

FEATURE: FACTORS IMPACTING FEED COSTS

rest of the world. However, high-priced
crude oil and an uncertain oil supply
could quickly increase biofuel production, resulting in increased competition
for the world’s grain and oilseeds.
The report said fuel demand will
depend on crude oil prices and policy
decisions focused on reducing greenhouse gases.
“If future biofuel production comes
from grasses and other non-food crops as
speciﬁed in current U.S. energy legislation, it will still impact food and feed crop
production due to the competition for limited world cropland and possible reduced
forage for beef and dairy animals,” it said.
In the next three to seven years, provided U.S. corn yields return to their longer-term upward trend, corn supplies for
the feed and livestock industries appear
likely to be more adequate than in the
past few years, according to the report.
Government ethanol blending mandates

in the U.S. will increase annually to 2015,
but at a much slower rate than in the last
few years, capping at 15 billion gallons.
That prospect, along with the near-saturation of the domestic ethanol market likely
will slow the growth in corn demand in
the next three to ﬁve years.
“After two consecutive low-yield
years in 2010 and 2011, resumption of
the long-term upward trend in yields
would mean more readily available
corn supplies for the feed industry in
the three- to eight-year horizon,” the
report said. “However, a number of key
longer-term questions remain.”
China appears to be an emerging corn
importer in response to rapid growth of
consumer incomes and dietary shifts away
from grain consumption to more animalbased protein. In February 2012, USDA’s
10-year global model projected that China
will import 9 million tonnes of corn in
2016-17, up from an estimated 5 million

tonnes in 2011-12. The USDA model
projects that China’s corn imports will
double between 2016-17 and 2021-22.
“With much slower expected growth
in U.S. corn-starch ethanol production
through 2022, the long-term upward
trend in U.S. corn yields would be expected to result in adequate supplies to
meet expanding Chinese demand and
increased supplies for the U.S. feed industry,” the report said. “If U.S. and/
or major foreign grain yields are below
normal, however, the inelastic demand
for biofuel likely will lead to sharply
higher feed costs and reduced nonethanol utilization. The U.S. livestock
industry likely would bear the brunt of
much of the required cuts in use in the
event of short-crop conditions.”
It also will be important for the feed
and livestock industries to monitor the
development of biobutanol. Several
U.S. ethanol plants have announced that

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