How the U.S. Biofuels Industry Relates to Indiana

While the state of Indiana is poised on the leading edge of the emerging biodiesel market, according to a study commissioned by the Indiana State Department of Agriculture, it also needs to anticipate the effects of a spike in ethanol production.

“We have identified the production and use of biofuels as a key strategy to pursue at the Indiana State Department of Agriculture,” remarked Lt. Governor Becky Skillman, who also serves as Secretary of Agriculture and Rural Development. “As we move forward in growing this new sector of our economy, it is important that we have all the facts needed to make informed decisions.” The study confirms that Indiana has the corn supply to support ethanol production in a time when more production is needed. Indiana’s corn production currently meets a variety of needs: 5 percent of the crop goes to ethanol production, 17 percent to Indiana’s livestock industry, 29 percent to other processing and 49 percent for export and residual use. Corn from Illinois, Iowa, Minnesota and Nebraska is all used at a higher rate in ethanol production (from 19 to 27 percent), with far less corn going to other processing (from 1 to 11 percent). “Indiana has a strong, dedicated food and industrial processing sector that uses a significant quantity of corn, which likely will not change much in the future,” said Indiana Agriculture Director Andy Miller. “Therefore, we need to plan for and avoid any unintended consequences that a sharp increase in ethanol production might have on our livestock feed costs and export markets.” Indiana recently announced its first biodiesel production plant and will be opening the fourth B20 Soy Biodiesel Public Pump. The study also notes there could be other advantages in biodiesel if well-coordinated research programs at the state and national level between agricultural and energy agencies are carried out. “Our state is in a strong position to fill this gap because Indiana’s soybean growers and Purdue University already lead the way in funding and carrying out research projects,” said Miller. The report, “The Structure and Outlook for the U.S. Biofuels Industry,” was prepared by Informa Economics.

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