FarmPolicy

October 20, 2014

Biofuels and the Farm Bill

Categories: Ethanol /Farm Bill

Iowa State University Extension Economist Robert Wisner noted earlier this month in the Iowa Farm Outlook that, “In the last two or three months, numerous articles in business and financial publications indicated the ethanol boom is about over. The rapid increase in corn processing for ethanol has been the major driving force pushing corn prices to levels not seen in years, and soybean prices to the highest level in 34 years. However, just when many business writers were pronouncing an end to the rapid ethanol expansion, crude oil prices moved up by $30 to $35 per barrel. High crude oil prices have been the primary driving force behind the ethanol expansion. The increased crude oil prices since late October have significantly improved ethanol processing margins after a period of depressed returns in September and October. For some plants during early fall, returns were negative.”

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