Farmers Earn Bundles Growing Corn for Ethanol

Corn is big business and a needed boost for Midwest farmers who have been suffering from low prices and foreign competition. With ethanol these farmers actually have a chance to make some money and maintain profits. Even better the ethanol plants themselves can also make profits which in turn help the lagging economies of the Midwest.

Farmers are currently getting $3.00 a bushel of corn which is at least $1.00 over the same price last year. Since the farmers grew so much corn in previous years, but there was no ethanol market, they have plenty of corn in storage which is suppressing markets. This excess is expected to clear out by the end of the year.

Ethanol plants also have an additional benefit of adding significant capital to small towns. According to the study "Economic Impacts on the Farm Community of Cooperative Ownership of Ethanol Production" an ethanol plant owned in a cooperative format by local farmers will have 56% more contribution to the local community than an absenteeism owner.

Therefore farmers who are engaged in a cooperative ethanol plant are not only earning more for their corn but also getting a return to the community. Furthermore, due to the heavy subsidies by the government they are also making excellent profit on the ethanol plants. They would continue to make this profit even if corn went up to $5.00 a bushel.

Approximately 50% of all ethanol plants are owned in cooperative. Non-farmer investors are learning quickly the advantages of owning an ethanol plant which costs somewhere around 50 to 60 million dollars. Therefore it requires an investor with deep pockets in order to come up with such a huge chunk of change.

Some policy makers have questioned the big push for corn ethanol when other crops give a higher return and with less damage to the environment. Soybeans, switch grass, and some species give a higher return of energy, require less maintenance and are better on the environment. Soybean is said to have 93% more energy than what is required to produce it.

Even if all of the available corn fields in America were fully stocked with corn it will only fulfill about 15% of the national need. According to scientists this doesn't offer the ability to make the U.S. independent of foreign imports. However, some lawmakers don't believe that the point is to be completely independent simply less dependent.