This year's corn crop is not big enough to meet the entire consumption base that has been built.

Prices will have to be high enough to convince some end-users to reduce consumption from current levels. Can the pork industry compete with other end-users? asked Purdue University economist Chris Hurt.

"The answer is complex and will depend on many factors, including how small the U.S. corn crop is and production in the southern hemisphere this winter," he said. "Ultimately, the question is how high corn prices have to be to get a sufficient number of end-users to reduce consumption."




"Clearly, use of 400 million bushels of a limited corn supply to produce ethanol to be exported to countries like Brazil is far beyond the intent of Congress in the 2007 energy legislation that established the current RFS," Hurt said.

The short corn supply increases the odds that some end-users, including the animal industries, will appeal to the EPA to consider exercising the emergency clause to reduce ethanol mandates for 2012, he added.

Without a reduction in mandates, the cutback in corn usage will primarily be thrust upon the non-fuel sectors represented primarily by the domestic animal sector and corn exports.

There has been a general assumption that foreign customers would reduce consumption as prices rise. However, in 2007-08, foreign customers increased purchases.