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Article: Oil a big factor in corn prices.(News)
- Article from:
- Feedstuffs
- Article date:
- July 14, 2008
- Author:
CopyrightCOPYRIGHT 2008 Miller Publishing Company, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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THE combination of fixed ethanol subsidies and, by today's standards, cheap oil brought the ethanol industry into being, but the recent runup in crude oil prices has had a more profound impact on corn prices than the continuation of ethanol support, according to analysts.
Crude oil prices averaged $20 per barrel between 1983 and 2002. During that same period, ethanol subsidies were between 40 cents and 60 cents, averaging 50 cents per gal., said Wally Tyner, an energy policy analyst at Purdue University.
"When crude went from $40 to $120 a barrel, corn went from $2 to $6/bu., a tripling of both prices. About $1 of the corn price increase was due to the ...