Ehs Seven

TOWER GUY WIRE, 5/16″ EHS SEVEN STRAND GALVINIZED-300ft $153.00

TOWER GUY WIRE, 5/16″ EHS SEVEN STRAND GALVINIZED-500ft $255.00

Corn is an essential crop in the United States. Corn production accounts for over ninety percent of the total cereal production forage. There are about eighty million acres of land used to grow corn. The United States is a major component in the global market for trade in maize. Maize has a variety of applications, such as energy and food products. Maize is found in a variety of food products such as starches, and beverages. With the expansion Ethanol production in the United States, there have been various effects on the corn market.

Since the rise in oil prices, States U.S. has been using alternative fuels. The most important alternative fuel is made from corn is ethanol. Ethanol is an alcohol-based fuel made by fermenting and distilling crops that have been broken down into simple sugars. In the United States, ethanol is usually made from starch crops such as maize or sorghum. In 2006, ethanol production in the U.S. jumped to nearly five million gallons.

Many farmers are choosing to grow corn which be used for ethanol, and not to be used in feed grains. Due to the expansion of ethanol, there have been changes in the agricultural sector in the United States. There have been several effects in the area of field crops. Such as domestic demand, exports, prices and allocation of the area among other crops.

Farmers are changing their farming options. Federal tax laws provide incentives for biofuels, which makes ethanol cheaper to produce. ethanol has little effect on the gasoline market, but has a dramatic effect on the corn market. ethanol demand is very inelastic, which means it does not respond to price changes. The corn market is more vulnerable to price changes. As the ethanol industry absorbs more shares of the corn crop, increased prices affect domestic use and exports. providing a more intense demand competition between domestic industries and foreign buyers feed grains.

Higher prices affect corn's role as animal feed. Livestock is the largest use of U.S. corn, but according USDA, 2007, corn for animal feed is projected to decline from forty to fifty percent of the total used in the next ten years. increased demand ethanol will lead stocks lower extension of maize.

Other crops are being affected, but the expansion of the ethanol industry. soybean more directly with the entire corn and more land. As farmers grow more corn in the use of ethanol, soybean production will decrease due that most of the land is used for corn planting. A reduction in soybean production would mean an increase in the price of soybeans, which will result in reduction in exports and low levels of carryover stocks and higher prices for soybean meal and oil. The production of cotton is expected to lessen in the coming years.

In response to higher corn prices, beef production in the livestock sector is projected to decline but should be offset by the disposal of distillers grains "as a substitute for food. However, the variable nutritional value will some adjustments in the production of distillers grains. Food products such as red meat and poultry is expected to exceed the general inflation rate in years next.

High corn prices also affect consumers. Food prices at the retail level have been fairly stable over the past twenty years, but with the increased production of ethanol, has been an increase in food prices. retail prices are affected by consumer demand and interaction between food manufacturers and distributors. The changes in farm prices of eggs, fruits and vegetables, are another violation price of less processed foods. Food producers can adjust tot eh changing market conditions by adopting more production methods efficient and improve technology to cope with higher costs. This will help stabilize the rising cost of corn.

Although there are some negative the effects on the corn market, global ethanol production will increase net farm income. increase in corn prices also mean the payments under government programs smaller agricultural commodities. Government payments, which accounted for about seven percent of cash income gross in 2005, expected to represent less than four percent over the next decade. Although the ethanol expansion will bring more income to farmers and reduce government payments, but also means that food prices for consumers.

About the Author:

Student at West Chester University.

Article Source: ArticlesBase.com – The Expansion of the Ethanol Industry, and Its Affects on the Corn Market