Green | April 06, 2010 | 0 comments

US Ethanol Rules Create 10% Chance Corn Prices Will Spike

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The prices of corn and other foods sit on the edge of a knife. Thanks to federally mandated ethanol standards, food prices could spike dramatically if drought or bad weather shrinks the U.S. corn yield this year, and the country lacks a good policy mechanism to handle such an event.

A report from two economists at the University of Illinois found that if the corn belt sees bad weather of the sort that has about a 10 percent chance of happening in any given year, the price of a bushel of corn could rise to $7 from about $3.50 today. The reverberations of such an event would be felt throughout food markets in the country, and, if history repeats itself, around the world. ...

http://solveclimate.com/blog/20100406/study-ethanol-mandate-creates-10-chance-co...
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