Center for Advanced BioEnergy Research, University of Illinois at Urbana-Champaign

Thursday, June 30, 2011

Purdue University Ag Economist: Ethanol Mandate Means Corn Demand Less Responsive to Price

Grainnet (Biofuels Journal)
Date Posted: June 29, 2011

West Lafayette, IN—Federal law that helped jump-start the ethanol industry in the United States also is shifting normal supply-and-demand forces within commodities markets, said a Purdue University agricultural economist.

Not quite four years after Congress passed the Energy Independence and Security Act in 2007, markets are struggling to meet both the law's renewable fuels standard and grain demands from the livestock, food and export sectors, said Wally Tyner, an energy policy specialist.

About 27 percent of the nation's corn crop must be devoted to ethanol this year to meet the federal mandate, leaving other corn users to compete for the remaining 73 percent.

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