Well, let's see.... corn hit $4.47 in mid 2009. Accounting for inflation, corn today should be a least $5.39 on the market. The price closed at $3.57 today and the December futures price is at $4.12. Sure doesn't seem that the corn market... and subsequent ethanol production.... is affected at all. Especially since corn is cheaper now, literally, and on an inflation adjusted basis than it was 10 years ago.
The markets always give us a clue on what the economic outlook is for various commodities. And the wet spring and flooding hardly made a difference, else there would be substantial futures pricing. So I guess it isn't the "fatal flaw" that you presuppose.
Originally Posted by fdcg27
Originally Posted by Mad_Hatter
Good read on the ethanol industry... enjoy....
"The Fatal Flaw in the Ethanol Industry"
One fatal flaw I can see coming is that ethanol production will likely decline over the next year due to low corn yields through much of the country as well as some fields that were never planted.
Much of the country saw an extremely wet spring which resulted in late planting or precluded any corn planting at all.
As a consequence, the surplus corn that the ethanol industry was intended to soak up won't be out there and every E10 dispenser I've seen includes the words "up to". Given the effective fifty dollar ceiling on oil, I'd expect most fuel sold as E10 to be closer to E0 and E15 to be about the same. E85 will likely cease to exist for at least a year or two. Also, many ethanol production facilities are owned by farmer's co-ops and many of these will likely end up in liquidation.
We can also look for sharply higher meat, poultry, egg and dairy prices next year as a consequence of tight feed supplies and therefore higher prices.
