Skip to content

Ethanol: Economic Gain or Drain?

Read article

Letter Writer:

Terry Ruse, a consultant in Raleigh, N.C.

Date Posted:

July 15, 2008


The basic premise of the article is that increased ethanol production has sequestered corn supplies away from food and feed production; thus, it is bad. Interestingly enough, corn PRODUCTION increased right along with increased ethanol production; so on a net basis, there was no impact on the availability of corn for food or feed. One only has to look at the Federal Reserve Bank's failure to strengthen the dollar, the global dietary change that is demanding more protein (thus increasing demand for grain and other commodities) and the exponential increase in oil prices to see that a near perfect storm has developed to create the atmosphere of near panic. Release crude from the Strategic Petroleum Reserve and bump up the Fed discount rate by 1 percent, and you most likely would see $50 a barrel come out of the crude oil price, almost overnight.