Economic Impacts: Markets, Consumers and Communities: U of M College of Food, Agricultural and Natural Resource Sciences

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Economic Impacts: Markets, Consumers and Communities

Keynote Speaker - Bruce Babcock (Iowa State)
Related Panel Member - Steve Taff

Technology, market forces and government incentives will determine how the biofuels industry will evolve over the next 10 to 20 years. Corn-based ethanol production will dominate the U.S. biofuels industry for the forseeable future without a significant change in government policy.

The impact of projected growth in ethanol production on agricultural markets and consumers is estimated using a well-accepted mulit-country, multi-commodity economic model. Unless U.S. ethanol demand drops sharply because of low gasoline prices or a change in Federal ethanol policy, feedgrain and oilseed prices will remain high.

Higher feed prices will cause grain-dependent food prices to experience a modest one-time increase. Increased corn prices and acreage will increase land rents, land prices, and the demand for the inputs such as nitrogen fertilizer, seed, storage and marketing services that increased corn production requires.