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Message: <blockquote data-quote="DarkKestral" data-source="post: 4064562" data-attributes="member: 40100">One thing people don't necessarily know: corn ethanol is rich in byproducts. The byproducts are often times capable of recouping the cost of production even without subsidies. So the ethanol itself is actually a kicker. Which is one reason we produce it.Furthermore, grain prices aren't just rising due to ethanol production; grain sales are rising even on grains not used for energy production, and the market is reaching and maintaining unit sale prices that are 3-4x what they were even a year or two ago. As a result, trading restrictions meant to restrain price volatility have been repeatedly lessened to allow the market to adjust because demand is so high from the food consumers. Prices now routinely go up as much as 50c a day today and can soar to 75c or more before trading stops... A year or two ago, trading for a given grain totally stopped once its unit sale price shifted more than 25c in a single day of trading. About year ago, soybeans were the cheap crop; traders were lucky to get 6 dollars a bushel. Now, for that same bushel, 15 dollars is considered cheap. Wheat and corn are yet more expensive. If we saw that sort of inflation at the pump, the US would collectively scream bloody murder, but that's the reality.. prices and demand are just that high.Yes, ethanol does have an effect on prices, but it's probably much smaller than you'd guess. In fact, the market's so good that ethanol production is looking like it will be too costly for too little gain very quickly; the pure grain will sell for more.(In the case of fairness: I have a relative in the grain business who is involved in the trading portion of the business, so she knows the prices very well and has a financial interest in grain prices.)</blockquote>

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