Congress Ends Corn Subsidies - Does This Mean Another Round Of Gas Price Hikes?

After spending thirty years and $45 billion dollars encouraging the use of ethanol the United States Congress has adjourned for the year without extending tax subsidies to the to ethanol industry. The subsidy currently costs taxpayers $6 billion a year. A related import tariff on Brazilian ethanol was also allowed to expire. With a wide group of critics, cutting across political and ideological lines, the tax break had become unpopular in Washington.

Business interests in the food and cattle industry as well as environmentalists opposed the law which paid 45 cents per gallon to fuel blenders to subsidize their costs for producing E10 gasoline/ethanol blend. The subsidy resulting in corn being diverted from feedlots and food processors to ethanol production, raising the cost of many foodstuffs. The environmental movement now opposes corn ethanol as a fuel it because it considers the fuel and its production to be “dirty”, in the words of Friends of the Earth.



Read Article

SteedPub - 12/28/2011 11:16:35 AM

+5 Boost

It should mean that corn prices stabilize. Now there will not be an artificial demand on the fuel distilling side of the market. If anything aside other pressures, we may see the prices go back down in the long run.

Mustang953 - 12/28/2011 11:38:34 PM

0 Boost

The Ethanol conglomerates are one of the single largest exporters from the United States. The last thing they needed were tax payer subsidies. Corn prices will not stablilize, IMO, since the rest of the world is using the ethanol and will still need it. Prices may actually go up for corn, since the companies will have to make up that 45 Billion dollars somewhere.

MorePower - 12/29/2011 3:34:46 AM

+2 Boost

Hopefully, this will mean that all corn based products will decrease in price.

bjones682001 - 12/29/2011 7:12:47 PM

+1 Boost

Most of you are so far removed from agriculture you have no idea how ethanol affects corn prices. FYI there is more corn stored in farmer's bins this year that probably in history. So no one is running short of corn, and ethanol is not diverting food from starving people. Oil companies get $$$$$$ of tax breaks, but now not ethanol. Sounds like picking winners and losers to me. Now that many ethanol plants have contraction expenses paid for, they don't need tax $$$ to be profitable.

FYI, most ethanol companies were ENCOURAGING the end of the tax money. They are ready to show all the nay sayers their business is a very important product than needs no help from the government to succeed. It's so sad how uneducated so many of you are.

Yeah....the 20¢ of corn in your cornflakes box is sure gonna be a lot cheaper if corn prices go down 50%, huh?