U.S. fuel ethanol and biodiesel production would be cut by 10 percent if Congress allows biofuel tax credits to expire this year, according to a new report from the Food and Agricultural Policy Research Institute at the University of Missouri, Reuters said.

The FAPRI report also said that corn and soybean prices would fall by an estimated 15 cents per bushel.

The 45-cent ethanol blenders tax credit and the 54-cents tariff on ethanol imports are scheduled to expire at the end of 2010. The $1-a-gallon biodiesel tax credit was allowed to expire at the end of 2009 and could be renewed in a bill pending in the Senate.

FAPRI said ethanol production would fall by about 1.5 billion gallons per year without the tax breaks.

Biodiesel would lose about 10 percent of its production without the tax credit, producing about 100 million gallons a year between 2012 and 2014, according to FAPRI.

(Reuters, March 9, 2010)

(http://www.reuters.com/…)

DTN: The U.S. biodiesel industry has virtually shut down production. Producers were struggling even before the $1 tax credit expired. A renewal of the tax credit for one year would be helpful, but it would probably lack a sufficient market signal for biodiesel to go full speed ahead. That's why there has been talk that both ethanol and biodiesel will join forces to push for a longer-term extension of those credits. (Todd Neeley)