- KRVN Audio
- Nebraska FFA Foundation Interviews
- 2010 Commodity Classic Reports
- On The Road for Agriculture
- Veal Video Draws Responses
- K-State Agricultural Events Calendar
- Best of Modern Ag on Display at Farm Show
- Nebraska Soybean Board Promotes US Beef, Pork in Japan Events
- UNL Agronomy and Horticulture Department 100 years old
- Neb. Game and Parks Commission OKs reorganization
- Several animal births at Nebraska State Fair
- CCC Rates Announced for September
- Pioneer Expanding IMPACT Program
- Turning Up Heat on Corn-Based Plastics
- Poultry Research Findings Reported
- Call Issued for New Pathogen Testing Regulations
- R-CALF CEO Defends Invitation
- Change Possible After November Voting
- USDA Takes Steps to Authorize RR Sugarbeets
- House Committee Hearing on Food Safety Scheduled
- Water Management Summit in Gothenburg September 23
- Recipients of Rural Business Enterprise grants announced
- USDA Announces Next Steps on Sugar Beets
Should investors and government invest in biofuels? Is it a safe investment? Are there better alternative fuels? Is
Hofstrand explains that “All ethanol plants are different of course, with different break-evens, but we’ve built an ethanol model on our AgMRC site, a hypothetical ethanol plant in
With Wall Street still waiting for
Hofstrand says a “wild card” for the renewable fuels industry is climate change. Both presidential candidates John McCain and Barack Obama promised to tackle climate change. If the new Obama administration “puts a price on carbon” with cap-and-trade legislation or a carbon tax, he says, “It will change the calculus of economics for the whole energy industry.” It should give an immediate boost to renewable alternatives like wind, solar and geothermal. But there is uncertainty about how it would impact ethanol because of the controversy over the greenhouse gas emissions caused by the corn ethanol industry. Hofstrand and co-author Gene Takle have laid out the issues associated with agriculture and climate change in a series of articles in the AgMRC Renewable Energy Newsletter.
Hofstrand has built an economic model that looks at “Who profits from the corn ethanol boom?” Hofstrand concludes that the ethanol boom has rewarded different segments of the industry at different times. Initially the rewards went to the ethanol producers. However, the producers expanded capacity, bid up the price of corn, and transferred the rewards to the corn producer. Higher production input prices and land rental rates are eating into the corn producers’ rewards. If the boom continues, the “eventual beneficiary” will be land owners because “Cropland is the eventual limiting resource in the supply chain.” However, the current drop in ethanol price has tightened the margins for the entire industry. So it will be interesting to see how the economics for each industry segment evolve over time.
To read Hofstrand’s profitability analysis with a full explanation of the following chart which is updated every month – or to sign up for the monthly AgMRC Renewable Energy Newsletter, go to: http://www.agmrc.org/renewable_energy/. To visit AgMRC, a virtual value-added agriculture center operated by

Recent articles in AgMRC’s Renewable Energy Newsletter include: Impact of Ethanol on the Livestock and Poultry Industry, Brazil’s Ethanol Industry, Climate Change - More on Biofuels, Cellulosic Ethanol Feasibility Template, Impact on Corn Market if Ethanol Expansion Stops, and Are Energy Prices Threatening the Farm Boom?
© 2010 The Nebraska Rural Radio Association. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.













