Growth of ethanol industry likely to boost competition for corn

AMES — Ethanol plant construction likely will change how corn moves in Iowa and throughout the country.

Overall, ethanol plant construction likely will lead to a higher basis variability, and regional basis patterns within Iowa will attract corn from other areas of the state in a normal year, says Robert Wisner, Iowa State University Extension economist.

In a short crop year, the potential is for very strong corn prices as ethanol plants and other corn-dependent industries bid for limited stocks. That could be a negative for livestock producers.

If there is a short crop from either a drought or flooding, it is not likely foreign buyers will exit the market. They likely will increase their bids, says Wisner.

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