Iowa Economist: Falling Ethanol Prices Mark 'Dangerous Time'

By DAVID ELBERT
Des Moines Register Business Editor

Neil Harl has started letting air out of Iowa's ethanol balloon, which has sent corn and farmland prices soaring.

"The end of the ethanol boom is possibly in sight and may already be here," Iowa State University's emeritus professor of economics told the New York Times recently.

"This is a dangerous time for people who are making investments" in ethanol, Harl added, citing a drop of more than 30 percent in spot market prices since May.

Industry insiders say the volatility is the result of growing pains.

The huge decline in ethanol prices is more of a "return to reality" than a market collapse, said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

Des Moines Register, Oct. 15, 2007