US Corn Prices vs Enthanol Mandates – worrying correlation

Pre the GW Bush Ethanol mandates of 2007 US corn prices bumped along at a sub $3 figure for many years. From 2007 onwards we see an inexorable rise to over $6 and talk of $8 in the wake of the recent drought. Economists such as Paul Krugman (see my previous post – Loading the Climate Dice?) would have us believe that the price rise is all due to the drought but the historical price graph gives the lie to that.

Now I am a firm adherent to the maxim that ‘correlation does not necessarily mean causality’. Having said that when the US is MANDATED yes mandated to convert what could be 50% of its corn crop (40% last year) into Ethanol, in 2012, then is there any wonder that the price of corn has doubled in 5 years.

The current government with its eye on sustainable energy is not going to change tack and the corn producers certainly are not going to look for any change so don’t hold your breath for a U turn on the Ethanol mandate any time soon.

Just another example of blind adherence to a political dogma that flies in the face of commonsense when natural gas prices in the US have halved during the same period.

More interesting takes on this.

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About The Septic Sceptic

A Fifty Something with a science/engineering background. Hates junk science and scaremongering self-appointed experts. Seeks error in everything. A staunch defender of the 'Scientific Method'. Author of 'To Kill an Error' a novel approach to Global Warming Scepticism. View all posts by The Septic Sceptic

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