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this situation, corn grain use for ethanol cannot fall below the previous year's use. This results in biomass filling all increases in ethanol production because it can produce ethanol cheaper than corn grain.

Because ethanol is the dominant bioproduct that can use either biomass or corn grain, its feedstock allocation determines market prices. In instances where the iterative solution results in a price that brings in slightly more biomass than is necessary to fill ethanol demand, the excess is used in electricity production.

Distiller's dry grains from ethanol production and soybean meal from biodiesel production are integrated within the model to evaluate how their quantities and prices affect the final market equilibrium. For every bushel of corn grain (56 pounds) used in ethanol production, 18.3 pounds of distiller dry grains are produced. It is assumed that distillers dry grains substitutes for livestock corn grain demand. One ton of distillers dry grain displaces 35.71 bushels of corn feed demand (Bullock, 2006).

Credit from the market revenue of distiller's dry grains to the production of ethanol reduced total production costs of ethanol. The market price of distiller's dry grains is estimated by the following equation:

is the price per ton of distillers dry grains, and is the price per bushel of corn grain.

For every bushel of soybeans (60 pounds) used in biodiesel production, 45.5 pounds of soybean meal are produced. The soybean meal byproduct enters into the POLYSYS soybean product module where price are endogenously determined. The revenue from the sale of soybean meal is credited to the production of biodiesel and acts to reduce the total production costs.

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Guide to Alternative Fuels

Guide to Alternative Fuels

Your Alternative Fuel Solution for Saving Money, Reducing Oil Dependency, and Helping the Planet. Ethanol is an alternative to gasoline. The use of ethanol has been demonstrated to reduce greenhouse emissions slightly as compared to gasoline. Through this ebook, you are going to learn what you will need to know why choosing an alternative fuel may benefit you and your future.

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