Midwest Floods Impact the Cost of Ethanol
Monday, June 16th, 2008From MIT’s Technology Review:
“Heavy rains, flooding, and cool weather in the Midwest will likely lead to much lower corn yields this year, especially in comparison with the bumper crops seen last year. This week, the United States Department of Agriculture lowered its predictions for this year’s corn crop by 390 million bushels, from 12.1 billion to 11.7 billion. If its predictions are right, corn supplies for next year will be the lowest since crop shortfalls in the mid-1990s, likely driving already record-high prices for corn even higher.
“In recent months, demand for corn used to make increasing amounts of ethanol has driven up corn prices, and to some extent food prices. But now bad weather in the Midwest, which has delayed corn crops, could further drive up corn prices and lead to significantly more expensive food, particularly meats. The weather problems could also cause some ethanol plants to shut down.”
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