Is Ethanol Responsible For High Wheat Prices?
Yesterday I noticed a couple of articles in the news that pointed to ethanol as part of the reason that wheat prices are so high. And again today, there are still more articles saying the same thing. The biofuel movement is also being blamed, as grain farmers switch from wheat to corn – the main crop used for ethanol. Full Article Another article puts it this way. While their overseas counterparts deal with bad weather and export restrictions, many U.S. wheat farmers have switched to growing corn to meet demand in the expanding ethanol market, Sowers said. The full impact of the wheat shortage hasn’t yet reached Main Street, he said. “It will get much, much worse,” he said. Full Article But are they right? As I have noted before corn prices were at a low point in 2005 and as a result corn acreage went down in 2006. So any changes that would be seen in planting patterns would have occurred since 2005. So let’s look at the numbers for corn and wheat. Corn Acres Planted 2007 – 93,600,000
