| A global multi-commodity simulation model was developed to estimate the impact of changes in ethanol production on the U.S. corn industry. Increased ethanol production under the Energy Acts of 2005 and 2007 resulted in a significant increase in the price of corn. However, for corn-based ethanol production, the break-even price of corn is approximately $4.52 per bushel with a federal subsidy of $0.51 per gallon of pure ethanol and $2.50 gasoline. With a corn price of $4.52, the economically desirable ethanol production is approximately 11 billion gallons. In order to produce 15 billion gallons of corn-based ethanol and to maintain the price of corn at $4.52 per bushel, supply of corn in the U.S. should be increased substantially through increases in corn... |
