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SC Iowa | Here is a link to Kansas corn grower's site that has excellent PDF file on ethanol tax credits...click on the "tax guide"
http://www.ksgrains.com/ethanol/regcredits.html
Here is the simplest analogy I can come up with to explain "how it works"......
You are bidding on two pieces of ground to rent and they are identical in size, productivity, etc......however, one has a direct government payment of $25 per acre and the other has $5....which do you think will bring the higher rental rate??
That's a bit of how it works in the ethanol market...the ethanol blender is buying ethanol and with it comes the ability to apply for the tax credit (as explained in above documents) which is eqv of 51 cents per gallon of ethanol purchased.....if there was no tax credit, they wouldn't be paying as much to the ethanol producer for the product, since there would be less total "value" to capture.
Ray J
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Ethanol
