Apparently, higher oil prices are better than lower oil prices - if you happen to be a U. S. corn farmer.
According to a Reuters article by Karl Plume, as oil prices rise so does the demand for alternative fuels such as corn-based ethanol.
“Prior to the ethanol and biodiesel build-out it could only be a negative for them through higher input costs. But today they get some gain as well because $100 a barrel oil implies much higher gasoline and ethanol prices,” said Michael Swanson, an agricultural economist at Wells Fargo.
“The corn market has rallied on the prospect of that ethanol demand being solid going forward. Every bushel of corn, whether it goes into ethanol or not, is getting that premium tacked onto it,” he said.
Bully for the farmers!
As Ed Norton once said about Ralph Kramden’s indulgent eating habits in an episode of the 1955-6 television show, The Honeymooners, Ralph’s waiting a couple of hours to eat wouldn’t hurt him very much, but it sure was going to hurt the farmers!
Well, it’s nice to know the farmers will be doing so well with higher oil prices. But what about the rest of us? Can anyone figure out how higher oil prices are going to help US?
