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Low Gas Prices
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Program: Food Forethought
Date: December 31, 2014

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Low gas prices are good for consumer morale, and with consumers paying less for gas at the pumps they are more apt to splurge on other spending, such as entertainment and travel. Experts tell us that with the world’s oil supply continuing to outpace the demand this trend could continue well into 2015. For the first time in I don’t know how long you actually see people smiling as they fill their car’s gasoline tank, but alas that smile will soon be replaced with the typical scowl as gas prices begin their inevitable creep back upward towards $3 per gallon. There is the possibility I suppose that the demand for gasoline will remain on a downward spiral, as more people adjust their gasoline “habits” through bicycling, walking more, ride sharing, and purchasing hybrid or high fuel economy automobiles. Farmers also benefit from low gas prices, as energy costs are some of their highest input costs - trailing just behind the cost of seed or rent for land. But then land rents across the country remain high, along with fertilizer and seed costs, and as crude oil prices decline so do corn prices. As one farmer stated, “Filling up the tank now feels good, but I know it will hurt when I try to sell the corn.”  

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