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dan45mcc

Uncertain future looms for corn-based ethanol

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These are precarious times for the corn-based ethanol industry.

 

Catastrophic flooding across the Midwest this spring inundated millions of acres of already-planted corn and land slated for planting. With corn prices already above $7 a bushel - more than triple what they were only three years ago - a significantly reduced corn crop will send them even higher.

 

How much higher is anybody's guess as the summer growing season moves into July.

 

Mark Sponsler, director of Greeley-based Colorado Corn, said he's not sure the Midwestern corn crop is as damaged as many media reports would indicate. But he does acknowledge there will be less corn grown this year and smaller yields in many fields.

 

That will undoubtedly push up prices, and while that's good for Colorado corn growers and others not impacted by the floods it means troubling times for the fledgling corn-based ethanol industry.

 

"It will drive (corn prices) up, and that makes it a very uncomfortable time for ethanol plants that need to get a decade or so of profitability so that base of infrastructure can become healthy," he said. "I don't think any of their business models contemplated $7 to $8 corn."

 

http://www.ncbr.com/article.asp?id=94680

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