Who profits from the corn ethanol boom?
Don Hofstrand, value-added agriculture specialist, co-director AgMRC, Iowa State University Extension, 641-423-0844, dhof@iastate.edu The emergence of the ethanol industry has generated substantial profits for individuals involved in ethanol and corn production. However, different sectors of the industry benefit at different times. Outlined below are the beneficiaries and when they benefit. This is shown graphically in Figure 1. To understand how returns are allocated, it is important to understand the role of prices. The price of ethanol is the major factor determining the total amount of revenue to be divided among the participants in the ethanol industry. The price of corn determines how this revenue is allocated between the ethanol producer and the corn farmer. The cropland cash rental rate (essentially a price) determines how the revenue received by the corn farmer is divided between the farm operator and the land owner. Another important concept is that profits accrue to the limi
