The Feasibility of Further Ethanol Expansion
AbstractOver the course of the last few years ethanol production has expanded at an incredible pace, putting strain on corn markets and transportation systems throughout the Midwest. Driven by the government subsidy and profit possibilities, firm entry rates have spiked. Previous to 2006-2007 the ethanol industry had been consuming feedstock dedicated to export, so little effect was felt by food markets. After 2007 ethanol’s demand for corn will begin to weigh on food markets as reduced supply drives up prices. Corn supply is fast becoming a binding constraint to the ethanol’s growth rate. The feasibility of its further expansion hinges upon the growth and technological advances of corn production, along with the ability of the industry to function profitably without the subsidy.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 4066.
Date of creation: 10 Jun 2007
Date of revision:
ethanol; biofuel; corn;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-07-27 (Agricultural Economics)
- NEP-ALL-2007-07-27 (All new papers)
- NEP-ENE-2007-07-27 (Energy Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baker, Allen & Zahniser, Steven, 2006. "Ethanol Reshapes the Corn Market," Amber Waves, United States Department of Agriculture, Economic Research Service, April.
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