04/07/08 Ethanol at $6/bushel corn

A record set last Thursday; six dollar a bushel corn. It was driven there by a supply shortfall and the increased demand for livestock feed and alternative fuels. With the government reporting last week that American farmers are going to plant less corn this year the price is poised to go even higher. Allendale Inc analyst Joe Victor says for the ethanol and biofuel industry these high corn prices couldn't have come at a worse time. VICTOR "Ethanol is very much a factor that still has to be dealt with. We didn't build all these plants just to shut them right back down again but the profit margins for the ethanol and biodiesel sectors are very tight at this point in time." 20 percent of last year's 13 billion bushel corn crop went to ethanol production and the American Farm Bureau says that figure will increase to 30 percent this next crop year. What if there's a weather related event that cuts corn production? VICTOR "Probably one of the main areas that the USDA as well as the Energy Department would look at is possibly reducing some of the import tariffs on Brazilian based ethanol." Victor says lower cost Brazilian ethanol imports would lessen the strain on American grain, energy and transportation costs by supplying more to the overall market. Today's Idaho Ag News Bill Scott