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Hershey Mired In Chocolate Mess
Carl Gutierrez, Forbes
The high price of corn is punishing chocolate maker Hershey, which on Thursday cut its earnings expectations as the result of rising demand for ethanol.
Neither corn nor its distillate ethanol are directly tied to the confectioner’s products, but soaring animal feed costs are pushing up dairy prices. Hershey cited an April 20 projection from the U.S. Agriculture Department that dairy prices would rise this year as a reason for its reduced outlook. The company, which earned $559.1 million last year, thinks that will grow by 4% to 6% this year, down from its April forecast of 7% to 9%.
(10 May 2007)
Ethanol seen chomping into corn crops
The surging fuel ethanol industry will gobble up 27 percent of this year’s U.S. corn crop, challenging U.S. farmers’ ability to satisfy food, feed and fuel demand, the U.S. government said Friday.
Even with its projection of a record 12.46 billion-bushel corn crop this year, the Agriculture Department said U.S. stockpiles will run low going into the next crop year when voracious ethanol demand will rise again.
(11 May 2007)
USDA economist projects 58 percent growth in ethanol production
Alan Zibel, Associated Press
An anticipated 58 percent jump in corn-based ethanol production next year will not boost food prices enough to harm consumers, the Agriculture Department’s chief economist said Friday.
The economist, Keith Collins, projected that 118 U.S. ethanol plants will produce 9.3 billion gallons of ethanol for the crop year ending August 2008, up from the 5.9 billion gallons expected for the current crop year.
“This is just amazing; that’s a huge increase,” Collins said at a briefing with reporters.
After hovering around $2 a bushel for a decade, corn prices have nearly doubled in the last year, pumped to near records by the ethanol plants that have sprouted up around the country amid new enthusiasm for alternatives to foreign oil.
U.S. food prices are up more than 7 percent this year, according to government data, in part because of higher costs for animal feed. But Collins said the increase is mainly due to other factors, including bad weather that harmed fruit and vegetable production and low levels of Australian wheat crops.
(11 May 2007)