Despite the flooding in Iowa earlier this summer, the US is set to harvest its second largest corn crop ever. Good news for the price of food for hungry people? Not really, the USDA expects that 34% of the total corn crop will be used to make ethanol for biofuel. They project a price of $5-6 per bushel for the coming year, up from $4.25 for 2007/08. I can't help but think that making fuel for SUVs out of food when there are still many poor, hungry people in the world is a bad idea. But what do I know?
Well you see in 2007 we also exported more corn from this country than we ever have. Just because we are dealing with so many gallons of gas E10 fuels do reduce our dependance on foreign oil. The markets will always figure themselves out. I work for a large ethanol company and we have lots of studies done regarding the ethanol capacity of our country. We have found that there is plenty of corn for food and fuels. Just remember 10% reduction in foreign dependency is better than none.