Corn prices good for area economy

Published Tuesday, April 24, 2007

The recent increase in the corn price has caused some to express concerns about the impact ethanol, to which much corn production is now devoted, will have on food prices. While rising food prices are a concern for many, it certainly is outweighed by the economic benefits ethanol is having, and will continue to have, in this area.

The price local farmers receive for their corn has risen more than 90 percent compared to five years ago. Many attribute the increase to the popularity of ethanol. Considering the significant role production agriculture still plays in this area, high corn prices can only mean good things for our local economy.

While the high corn prices also increases costs for ethanol producers — including the plant under construction in Fergus Falls — those costs can be recovered if the price consumers will pay for ethanol is high enough. Considering the price of gasoline, it appears ethanol can currently be priced for profitability.

In the long term, it is the hope that technology can be developed so crops such as switchgrasses can be used to produce ethanol to reduce the demand for corn.

But the bottom line is, it appears reducing air pollution and our dependence on foreign oil will require Americans to sacrifice in the form of higher food and gas prices.

It’s a sacrifice we should be willing to make.

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