Ethanol in MN is about returning some profit back to MN farmers on corn that no one wants any more. Other countries bought from other countries, not the USA until a last resort. As about as far from a port as physically possible, MN has a really bad basis corn price. We were getting $1.60 for our corn many years.
Livestock farmers openly laughed at grain farmers 'round here. Had that happen to me several times - grain so cheap to buy - ha ha.
Ethanol provides better air quality, and very slightly stretches our fuel supply.
Ethanol adds O2 which makes gasoline burn cleaner. It also adds a ton of octaine to the fuel, so the gasoline portion does not need to be refined as much. And despite all the hupla you hear from some corners, a gallon of ethanol burned as fuel saves about 1/4 to 1/3 of a gallon of perto fuels, so it _does_ increase the fuel supply taking into acount the fuel used to make it.
Without the E10 fuel blend, you would have less fuel available, and prices would be even higher right now.
Farmers themselves put up money to build & develop the ethanol industry up here. We did not change the national (Chicago Board of Trade) price of corn very much at all - not all that much corn is being used for ethanol. We _did_ change the local basis quite a bit. Used to be we got 50 cents, even 70 cents less than the CBOT price for our corn. Now we are closer to 30 cents under. That has helped corn farmers here in MN, while not really changing the price of corn in Texas, or New York. It is the _local_ basis prices that change with ethanol plants being in the area.
The CBOT prices have changed because of 3 things. Speculators; world demand; and the greatly lowered USA dollar value. Ethanol has not had much at all to do with this price change - other than infuencing speculators some.
Without ethanol, we would have slightly lower feed prices because speculators would be only slightly less heated up over grain markets.
We would have higher fuel costs, because there would be 3% or so less gallons of fuel available. And our gasoline would yield slightly less per barrel of crude - needs more refining. And there would be less fuel options, more central control.
The one big main central thing affecting both food & fuel prices is the devalued dollar - this has made everything we export (like grains) priced right to other countries, so they are buying buying buying. As well, speculators are willing to buy grains because anything else they invest in - bonds, stocks, housing - worthless - commodities like grains are appreciating in value so the speculators dump money into buying them and that makes them appreciate even more...
The lowered dollar value also makes anything we import - fuel, fertilizer, herbicides, fish & other goods - cost more.
All of this can be pointed directly at the ARM morgages & the housing bubble that was known to be a bad thing, but people kept buying & leveraging & building bigger.....
Sorting that mess out is going to hurt - all of us. And it will result in higher prices, less jobs.
Ethanol has very little to do with any of this, and likely is helping keep fuel prices from climbing even higher. Bulk ethanol prices have not climbed as high as crude oil - blended ethanol fuels are keeping the price down.
Without ethanol a decade ago, corn prices woulda been even worse, and I believe you would have seen more of our food production going overseas - less food produced here in the uSA because farmers could not produce for what the general public was offering.
Can you imaging what food prices would be if we relyed upon imported food more than we do? Our low dollar value... We would become a 3rd world country.
I believe ethanol has saved us from a horrible ecconomic event here.
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