Thread: Ethanol

Here's an article that sums of some of the reasons for the increases in the cost of a bushel of corn (and other commodities) and that changes that have been made recently. This issue has been noted in the crude oil thread but only slightly. The increased growing/harvesting of ethanol has also caused wheat to increase. If you think this thread should be in the "Clinton/Green" thread, let me know.

Siphoning off corn to fuel our cars

As farmers feed ethanol plants, a costly link is forged between food and oil

April. 30, 2008

CHARLES CITY, Iowa - Erwin Johnson picks up a clump of the dark, rich soil that he has farmed for 35 years, like his father and grandfather before him. In a few months, this flat expanse of northern Iowa will be crowded with corn ready to be trucked to market.


A year ago, that market got a little closer -- and a lot better. Instead of sending his corn to a barge company to be shipped down the Mississippi River for export, Johnson now loads it into an open truck and sends it two miles up the gravel road to a hulking new ethanol distillery that he can see from his field. The plant is paying him $5.50 or more a bushel, more than twice as much as Johnson could get just a couple of years ago.
"This is a fantastic time to be farming," Johnson says. "I'm 65, but I can't quit now."

Across the country, ethanol plants are swallowing more and more of the nation's corn crop. This year, about a quarter of U.S. corn will go to feeding ethanol plants instead of poultry or livestock. That has helped farmers like Johnson, but it has boosted demand -- and prices -- for corn at the same time global grain demand is growing.

And it has linked food and fuel prices just as oil is rising to new records, pulling up the price of anything that can be poured into a gasoline tank. "The price of grain is now directly tied to the price of oil," says Lester Brown, president of Earth Policy Institute, a Washington research group. "We used to have a grain economy and a fuel economy. But now they're beginning to fuse."

Link: Siphoning off corn to fuel our cars - Washington Post - MSNBC.com