Who can afford corn? Almost no one, Purdue economist says

Noblesville Daily Times (Indiana)
Written by Press Release
Thursday, 26 June 2008

WEST LAFAYETTE, Ind. - Inexpensive and abundant corn helped move the ethanol industry onto the alternative fuels fast lane. With corn prices now at record highs, demand outpacing supply and crop losses inevitable with the Midwest floods, ethanol production could soon be stalled, a Purdue University Extension agricultural economist said.

As corn prices continue climbing, fewer ethanol producers can afford the feedstock, said Chris Hurt. In turn, domestic livestock producers and foreign buyers are finding it more difficult either to pay the high prices or obtain the grain they need, he said.

"The ethanol industry is struggling to pay for corn that has reached the $7 a bushel level," Hurt said. "So the ethanol industry may also experience losses and might not be able to bid the price. That will depend on what oil prices and, therefore, ethanol prices, are.

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