Laserfiche WebLink
<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />'11!.!'Il4(''>? <br />UV.i.0-ww <br /> <br />the supply side, it will raise production costs and encourage both energy <br />conservation and different cul tural practices. But perhaps the most <br />noticeable impact of the energy situation on agriculture will be the demand <br />for grain for ethanol production to blend with gasoline to form gasohol. <br />Martin Abel of Schnittker Associates recently compl eted an analysis of the <br />long-range prospects for the demand for corn for ethanol production as part <br />of an overall analysis of the constant price growth in demand for U.S. farm <br />output. Abel concl uded that compared to the 60 mill ion bushel s of corn per <br />year used for ethanol production in 1978-79, that use of corn coul d <br />increase to between 20-40 mill ion metric tons per year by 2005. Abel's <br />upper estimate was used as a constant price component of the 'other use' <br />demand for corn. Thi s estimate was interpol ated back to 2000, 1990 and <br />1985 and it was held constant at its 2000 value to the year 2020. Corn <br />demand, therefore, reflects a significant ethanol industry which seemed <br />plausible at the time of study formulation in 1975-79 but is less likely <br />with prevailing federal policy in 1981. The final 'other use' demand for <br />corn is then determined in the model as elasticities of supply and demand <br />eliminate excess demand or excess supply to obtain equilibrium price, pro- <br />duction, and util ization for each projected year. <br /> <br />11-34 <br />