Ethanol is to blame for some of the increase in the price of corn to $6 a bushel from $2 a bushel two years ago, according to a new study by University of Wisconsin agribusiness professor Randy Fortenberry and graduate student Hwanil Park.
The study looked at the rise in corn prices paid to farmers from September 2006 to December 2007. It found that 31 percent of the total price increase was related to ethanol production. The remainder was linked to a combination of other factors – increased demand for food from developing countries, the shrinking value of the dollar and commodities speculators.