As corn prices hit a record high of $6 a bushel this Thursday, I could not help but smile and shake my head at the predictable effects corn ethanol fuel demand has had on corn prices:
"For years, corn was cheap and fermentation processes for ethanol production came to completely dominate the biofuel industry in North America," Michael Jackson, president and chairman of Vancouver-based ethanol maker Syntec Biofuel, said this week. "Now, with corn prices well over $5 a bushel, corn ethanol economics have gone out the window."(AP Story)
Higher corn prices also cause other food prices to go up. Because corn is used as feedstock, the price of corn is linked to meat and dairy prices, meaning that higher corn prices also mean higher food prices in general.
Looks like corn based ethanol is still a pretty corny idea...