<<<snip>>>
Ethanol has less energy per gallon than gasoline or diesel,
and the only
reason it's affordable is because of government subsidies to
corn producers.
<<<snip>>>
There may be some government "subsidies", but it's not just
for corn but all different ag products. The main reason the
lower ethanol blend price is it's given a fed tax break like
10 cents less per gallon then what's applied to gasoline.
We burn a lot of ethanol in central SD and it's not because
of polution or government mandates. We burn it as it's
produced locally and as such there are much lower
transportation costs of the raw grain out and then bringing
the finished alcohol or straight gasoline in. We have a
very large plant here in town (25,000 people) and another
larger one being built 18 miles east of here near a town of
1000.
If ethanol use went up, then the need for a subsidy of
either the grain (no matter what it's future use) or the end
product, ethanol, might no longer be needed. If there's a
big demand for the raw product, then prices will raise
naturally, and the subsidy, actually a guarenteed minimum
price, would no longer be necessary. The market price would
rise above the guarenteed minimum and and therefore a
"subsidy" would no longer be paid.
Just try raising a bushel of corn for the unsupported market
price and see how much work would be involved. The current
market price for corn here is $2.09/bushel. That's less
then a year ago and doesn't allow for the inflation value of
the CPI.
Blake
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