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The impact of the ethanol boom on rural America


  • Jason Henderson


Since 2005, surging U.S. ethanol production has helped reshape the rural economy. Ethanol production has increased nonfarm activity in many rural communities. Moreover, increased ethanol production contributed to rising crop prices, increased net returns, and a jump in cropland values both nationally and regionally. However, rising crop prices cut livestock revenues by boosting feed costs. As a result, while ethanol proponents tout the benefits emerging from the ethanol industry, opponents rail against its adverse side effects. Although the expanding ethanol industry has made a sizable impact on the rural economy, that impact has not been as large as initially estimated.

Suggested Citation

  • Jason Henderson, 2009. "The impact of the ethanol boom on rural America," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Apr, pages 65-73.
  • Handle: RePEc:fip:fedlrd:y:2009:i:apr:p:65-73:n:v.5no.1

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    References listed on IDEAS

    1. repec:oup:revage:v:27:y:2005:i:2:p:164-180. is not listed on IDEAS
    2. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    3. Westhoff, Patrick C. & Thompson, Wyatt & Meyer, Seth D., 2008. "Biofuels: Impact of Selected Farm Bill Provisions and other Biofuel Policy Options," FAPRI-MU Report Series 37772, Food and Agricultural Policy Research Institute at University of Missouri.
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