Less Corn = Higher Ethanol Prices. And The Sun Will Rise in the East Tomorrow.
Higher corn prices could soon be passed on to those filling their cars up with ethanol, says CNNMoney. The increasing cost of growing corn, along with favorable prices for other crops such as soybeans could fuel a decrease in corn production. Even though ethanol is heavily subsidized, it has contributed to the rise in corn prices, which has hurt poultry, beef and pork companies who use corn to feed their animals. But a decrease in corn production would also be bad news for the corn-juice industry. According to the Renewable Fuels Association, the number of ethanol plants has increased from 50 in 1999, to 134 today, with more plants on the drawing board. Given that, on average, a 100m gallon-per-year ethanol plant consumes about 33 million bushels of corn, more ethanol plants and less corn could spell trouble ahead. The decreased supply could drive corn prices even higher, which would offset any possible “advantages” corn-based ethanol was supposed to offer.