May 10, 2008

Corn Prices Aren't High Enough

Some ethanol opponents are hoping for higher corn prices to force ethanol plants to close.At least not to some in the pork industry.

The percent of the corn crop planted in the U.S. as of May 4 was 27; this compares with 45 percent last year and 59 percent for 2003-2007. With the big decline in corn acreage, indicated by the March 3rd planting intention, we need at least normal yields or the pain of high corn prices will be even more severe. If now looks like we will need to get corn prices high enough to close some ethanol plants for some period. With the current prices for gasoline, that would probably be between $7-8 per bushel. Source

The article also notes that pork is experiencing "unbelievable strong demand" and that prices are up. But I guess that isn't good enough. They want strong demand, high prices and low feed costs. The real question is are they willing to push up corn prices, hurting consumers in the meantime, to achieve their goals.

Makes me wonder if there is any kind of price rigging going on with corn prices.

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