Study: Extension of ethanol tax credits would boost corn production

JEFFERSON CITY, Mo. -- Extending federal ethanol tax credits would help significantly boost corn production, a new study from the University of Missouri finds.

According to a report released by MU's Food and Agricultural Policy Research Institute, indefinitely extending the 45-cent tax credit for biofuel blenders and the associate 54-cent tariff on ethanol imports would increase the domestic production of ethanol from corn starch by 1.2 billion gallons per year. The increased fuel production would use an additional 440 million bushels of corn.

Based on these findings, FAPRI predicts growing area for corn would be expanded by 1.7 million acres, while soybean area would fall by 800,000 acres.

The ethanol tax credit and tariff are set to expire at the end of the year. Earlier this month, Missouri Senators Claire McCaskill and Roy Blunt both voted against a bill in the U.S. Senate that would have brought an abrupt end to the ethanol tax credit. Both senators said the system for subsidizing biofuel blenders should be adjusted, but not simply eliminated.