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| RFS mandate aside, Lets just pretend it doesn't exist and there are pure free market forces at work and all markets seek balance. I see oil is printing new lows this morning(just saw 43.98/barrel). I have a question for the ethanol insiders: With current technology what price would ethanol need to be, and thus what price would corn need to be to compete on a level playing field?
We used to assume that oil would remain over $85/barrel, and since the corn market it tied to energy markets that would provide a floor under prices. But what if oil stays <$50/barrel for extended period of time? Like 4-5 years.
I'm not making any political argument for/against anything here, I'm just looking for information. Because I want to be able to make decisions based on reason and logic...I have no idea what politicians are going to do. As a business owner its my responsibility to make decisions whatever political winds blow. But its my general philosophy that markets gravitate to equilibrium eventually, politics can only delay or accelerate the pace.
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Oil & Ethanol and the price of corn
