Ethanol producers are jockeying for a seat on the increasingly crowded bailout bandwagon. Just last Friday, the U.S. Department of Agriculture Secretary Ed Schafer addressed the plight of those poor, poor businessmen who got locked into the cost of corn this summer. Just like oil and natural gas, the current price is half of what it was at its peak. Fierce competition and the economic downturn are contributing to thinning of their ranks. Schafer claims that “the ethanol industry is too important to the nation to allow it to go into more financial difficulty.” The USDA is prepared to provide bailouts loans of up to $25m– an offer which sparked a backlash from livestock producers. They’ve been whiplashed by the price of corn, first as it shot up thanks to ethanol production, then by taking long positions and taking a hit as corn prices plummeted. As usual, the customer is going to get the shaft: don’t expect much of a price break on your E85 or pork bellies anytime soon.
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