Ethanol has Vermont farmers in a pinch. On top of rising fuel costs, a continuous burden on farmers, grain prices are also rising, cutting into farmers paychecks. China and their increased demand for grains is also part of the issue, but Jim Bushey of Boudreau Bros. a dairy farm in Middlebury says, "Corn is being used in the ethanol business and has put a really severe demand on corn for ethanol into automotive use." Corn futures were under $2 a bushel two years ago while now March futures price has a bushel selling at almost $5. Soybean prices have also doubled in the last year going from $5.60 a bushel to $11.92. [Sources: Times Argus, WCAX, & Earth Policy]
2 comments:
Commodity markets are quite complicated. Causes for price increases and decreases are not always obvious; although it's true that sometimes what looks like the reason truly is the reason.
I wish with all this popular linking of ethanol demand and impacts on dairy farmers that someone would do some actual research/investigative journalism and really either establish or disprove the cause-effect chain.
For example, how do you disinter the two potential causes of the increases in food prices: ethanol demand changing farmer's decisions as to the amount of acreage to devote to energy vs. food crops, and energy costs for production of food?
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