title: Industrial Uses of Agricultural Materials: Situation and Outlook Summary
author: USDA Economic Research Service
date: 29 June 1993
almanac-area: ers s-and-o
June 28, 1993
U.S. Industrial Uses of Agricultural Materials To Continue Rising
Recent scientific advances are reducing the costs of producing and processing
renewable resources into industrial products. These include advances that
make agricultural production techniques more environmentally benign. And the
advances in process engineering--especially in destructive distillation, steam
explosion, ultracentrifuges, and membranes--are making agriculturally based
products more competitive. The scientific gains, along with Federal and State
environmental regulations, and growing consumer preference for "green"
products, are increasing the industrial demand for agricultural materials.
Some analysts expect that over the next 3 years the amount of plant matter
used in industrial materials, excluding paper and natural rubber, could
increase by over 5 million tons, almost double that of 1990.
Given the national economic outlook, housing, textiles, and fabricating
metals--key users of agricultural materials--are likely to show above-average
growth, while printing and publishing--also key users--probably will show more
sluggish growth. Petroleum prices are forecast to rise slightly.
Over the next 4 years, production increases in ethanol, adhesives, and
biopolymers will pull up the industrial uses of starch and sugar. Cornstarch
is now relatively less expensive than starch from other sources, and has
captured most of the market. Translating the demand for starch into corn-
equivalents, industrial uses of corn are expected to increase about 140
million bushels to 795 million bushels by 1995\96--up roughly 8 percent per
Industrial rapeseed acreage is down, while crambe acreage has risen 150
percent from last year. Derivatives made from these oilseeds are used in slip
agents for plastic films, lubricants, and automatic transmission fluids.
Jojoba prices are down, and growers and processors are working to find new
uses for the oil. Animal- and plant-based oils are making inroads into
surfactant markets. Plus soy ink use continues to grow.
Biodiesel, which can be made from almost any animal or plant fat or oil, is
being commercially produced in Europe, and is being tested in the United
States as a possible means of meeting Clean Air Act Amendments' emission
standards. More testing is needed, but the results so far are favorable.
This year, over 3,800 acres of kenaf, a tropical fiber crop, are being
commercially grown in the United States. Kenaf is used for packing materials,
bond paper, horticultural mulches, potting mixes, seeding mats, animal litter
and bedding, and oil absorbents. Potentially, it could move into newsprint
and paperboard markets. Erosion-control products are promising to increase
the demand for natural fibers.
According to industry estimates, U.S. beef byproducts are worth $3 billion a
year, with most going for industrial uses. In 1992, almost 5.8 billion pounds
of inedible tallow was produced, and half was exported. During 1990-92, U.S.
production of inedible rendered products rose very slightly. Domestic use
slipped over 12 percent while exports rose nearly 13 percent. That partly
reflects a switch by U.S. consumers to liquid soap from bar soap.
New products that conserve forest resources are on the rise. They are made
from new technologies that produce paper, chemicals, and construction
products, often from recycled wood wastes and underutilized forest byproducts.
Biopulping and other advances in making paper are more efficient and generate
less chemical waste. New lumber composites are reducing the demand for old-
growth wood and offer improved performance and design characteristics.
Developing alternative sources of the drug taxol is limiting the long-term
opportunities to commercially farm the Pacific yew tree, but there may be some
opportunities for growing other species of yews. Some experts predict that in
3 years, taxol will be made from trees on commercially developed plantations,
laboratory semisynthesis, cell tissue culture, and fungal metabolites.
Guayule, a desert shrub native to the Southwest U.S., is a high-cost source of
natural rubber. But a new market may open up for medical gloves, condoms, and
other consumer items made from guayule-derived latex for people allergic to
hevea-based natural latex products.
Using two probable growth scenarios for starch-based biodegradable polymer
output to the year 2000, net farm income will increase slightly and total
government deficiency payments will decrease slightly as a result. However,
farm output will be largely unaffected. The analysis suggests that increased
support for biodegradable polymer research, development, and commercialization
would decrease government outlays and increase net farm income.
U.S. ethanol is now mostly made from corn. Future sources may include
cellulosic materials, such as short-rotation woody and grass crops.
Provisions of the 1990 Clean Air Act Amendments, aimed at controlling carbon
monoxide and ozone, are opening up new markets for ethanol along with its main
oxygenate competitor, MTBE. Ethanol's near-term demand growth as an oxygenate
will depend on regulations expected to be finalized this fall. Over the long
term, ethanol has the potential to be a cost-competitive feedstock for
oxygenating ethers (ETBE) as well as an alternative fuel.
The first two issues of this S&O are primarily funded by the Department of
Energy's Office of Industrial Technologies, USDA's Alternative Agriculture
Research and Commercialization (AARC) Center, and USDA's Cooperative State
Research Service, Office of Agricultural Materials.
Special articles are "The Effects of Expanding Biodegradable Polymer
Production on the Farm Sector" and "Ethanol's Evolving Role in the U.S.
Automobile Fuel Market." Printed copies of Industrial Uses of Agricultural
Materials: Situation and Outlook will be available in 2 weeks. For details,
call Lewrene Glaser or Greg Gajewski at (202) 219-0085. The text of the
report will also be available electronically. For details call (202) 720-
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