Corn, globalization, and an election in Iowa

[phantom power]

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Since mid-September, the Wall Street Journal reports this morning, the price of corn has risen 55 percent. The reason: a surging demand for ethanol. The result: corn farmers are delighted, but livestock farmers who depend on corn for animal feed are grumbling, and packaged food producers may soon see their profits tighten as the price of a key ingredient in just about everything ramps up.

The ramifications don't stop there: consumers worried that the price of milk, steak, corn flakes and Coca Cola might rise can take heart that corn subsidies paid by the federal government to prop up low prices, currently to the tune of 8 billion dollars annually, might fall, to as little as 2 billion.

Let's put aside the question of whether it makes any sense for corn-based ethanol to be the booming biofuel of choice in the American economy (most likely, it doesn't.) In the big picture, the surging hunger for ethanol is a response to rising oil prices, which has been propelled by tightening supply and rising demand, worldwide. It is, in short, a global story. Economic growth in China is pushing up the price of corn in Iowa, even if ethanol produced in Iowa isn't going directly to Shanghai.

http://www.salon.com/tech/htww/2006/11/06/iowa_corn/index.html

[Dead_Parrot]

1. Look on the bright side:

With all that cheap ethanol, you'll be able to drive further and shop around to get the best prices.

:silly:

[phantom power]

2. Yeah, our future's so bright, we've gotta wear shades.

You know, it's all going to really get traction as the global drought continues to squeeze us. Looks like Australia may be the first industrialized nation to really get hit hard. Have fun with that, John "La!la!la!" Howard....