High Grain Prices Threaten Viability of Ethanol

Biofuels growth hit by soaring price of grain
Fiona Harvey, Kevin Morrison and Mark Mulligan, Financial Times, February 22 2007

High grain prices are threatening the nascent biofuels industry ...

Corn prices reached another 10-year high for the second successive day when it touched $4.31 a bushel, up five cents on the day. But the doubling of corn, a main feedstock for US ethanol producers, over the past year at a time when oil prices are at the same level they were 12 months ago has raised questions over the viability of the biofuels industry without heavy government support. ...

Brazil is the world’s biggest producer of ethanol, and its industry will be unaffected by high grain prices because its producers use sugar cane rather than wheat. Converting sugar to ethanol is more efficient than using wheat, and Brazilian companies are widely acknowledged to be the world leaders in efficient techniques to convert sugar cane to fuel. ...

 

Comments

[amazingdrx]

Yep, bought a corn burner to save money? Forget it.

Fuel farming will never bring the cost per driving mile to financially beleaguered families down. Only plugin cars can do that.

And only plugin cars can help stop global climate change. Fuel farming only destroys the land that could sequester carbon.

[Aaron]

I'm actually interested in whether or not the higher price for corn due to ethanol saves consumers and the government money due to reduced subsidy costs. We spend billions of dollars per year subsidizing agricultural products, and then spend even more money to store or throw away the surplus.

[Kit P.]

Aaron, I heard on NPR that American farmers will not be getting any corn subsidies because the price is above the limit. Furthermore, the savings for the government is greater that the PTC for ethanol. We will be hearing more about this and it will be interesting to see if farmers plant more corn without damaging the environment.